Debt is a serious problem for almost two thirds of students, according to government research.

The report for the Department for Education and Skills found a raft of problems for university students, which increased among those from poorer backgrounds.

Undergraduates from ethnic minorities and those from low-income families are most likely to have problems over financial hardship, the report for the DfEE and Universities UK found.A fifth had housing problems and some students felt their tutors could do better at supporting them through difficulties.

Only exam anxiety was higher on the list of students' concerns overall.

The report, by the Institute for Employment Studies called for universities to reflect on the number of students having to work as well as study.

"Institutions need to take more account of the extent to which some students are working or are building up large debts and how this might be affecting their academic work and commitment," it said.

Responding to the reports findings NUS National President Owain James said: "It comes as no surprise that students are citing debt as their biggest fear whilst at university, as students today can expect to graduate around £12,000 in debt. However their financial misery starts at university where 90% of them are now forced to work at some point to try and keep their heads above water. Working, often in low-paid jobs and during unsociable hours, is proven to have an adverse affect on students' grades."The government is aware that the current system of education funding is not working and this report serves as another piece of evidence to support NUS' call for the abolition of tuition fees and the introduction of targeted maintenance support. If the government is serious about widening access to university its student finance review must present a package that will encourage all potential students to attend university."