"I had always had a bit of a problem with gambling," says one student. "When you start your degree they give you a big pot of money and you just think, wow!"

He's not the only one taking a punt with his student loan: a survey last year by Save the Student showed that as many as 20% of university students had gambled in an attempt to make money.

For those immune to the draw of the bright lights of Vegas, or who see gambling as a "tax on stupidity", it may be hard to understand why it appeals to so many of the country's sharp young minds.

The odd flutter here and there can be harmless, but for the growing number of students with a gambling problem, it's not just their finances at stake. Gambling addiction has been linked to poor mental health, crime, alcohol problems and weaker educational attainment.

One ex-student, who wishes to remain anonymous, gambled large amounts of his student loan, culminating in a loss of £8,000 in just one hour. He describes spending £20-£40 a week on the controversial fixed odds betting terminals at the local bookmakers, but also started betting at home on online roulette games.

"After receiving my student loan payment one day, I took a large chunk of it and decided to have a really good go at making some money online.

"I got on to a winning streak, and before I knew it I had thousands in my gambling account. Unfortunately I was only allowed to make small withdrawals per day, and when I went back to the site the following day to make the next withdrawal, I decided to see if my luck was still in. I lost my remaining funds within an hour.

"My head was in my hands. I was gutted. I thought my money worries were over, and I was thinking about buying a holiday. I had been shopping that morning and spent £300 on a new wardrobe."

The financial problems were stressful, but he says it was the obsessive nature of the addiction that affected his studies most.

"Gambling caused me a lot of problems with my degree. While my friends were in the library, I would be in the bookies trying to win money. I wouldn't say it was the only reason I didn't finish my course, but it was certainly a big contributor."

Lloyd Duddridge, 26, a postgraduate history student at Birkbeck, University of London, started gambling on football matches to add a bit of extra interest. He spends around £10 a week on bets, and doesn't consider himself to have a problem, but is well aware of the need to control his gambling and warns against online gambling and "fast turn-over casino style games".

"It's best to physically see the cash you are handing over," he says. "Online you don't see the money leave your account, so its hard to know what you're spending."

It's estimated that around 127,000 young people in the UK have a gambling problem, and opportunities to get involved in gambling are increasing. The revised Gambling Act that means casinos no longer require membership, and bookmakers and online betting sites can now advertise on television.

Those who start gambling young are more likely to have a problem as adults, which makes tackling the problem at university even more important, according to gambling charity Gamcare.

"It's time to open up a conversation about gambling in universities," says Trevor David, Gamcare's lead training and development consultant.

"For the first time, student finance officers have been coming to us and requesting we come to events and give information to students," David continues. "Universities seem to be becoming aware that there is a growing problem."

He also says that unlike drug and alcohol addictions, which often have physical manifestations and are better understood, a lack of knowledge about gambling addiction means that it often goes unnoticed: "More education is needed – people need to know how to spot a gambling problem in others and what help and support to provide.

"University staff need to know how to spot a problem and what support to provide. Student money advisers, for example, should know what simple questions they can ask to find out if a student is having trouble with gambling."

The advice from Gamcare is to "remember that gambling should be about entertainment and having fun. It's not a way to make money, it's not a way to get rich quick and it's not a way to get out of debt."