The bank has started offering overdrafts to new students up to Â£500 greater than other lenders, rising to Â£2,100.
Other banks only offer Â£1,000 to first year students, but Halifax could encourage students to borrow more as it offers an interest free overdraft.
Peter Jackson, head of banking and savings at Halifax, stated that the move was in response to the rising cost of living for students.
Yet new research for Parship.com has found that debt levels mean that graduates are returning to live with parents after graduation as they cannot afford to buy or even rent somewhere to live.
With students being given greater opportunities to borrow more by the Halifax, it could mean that even more students will leave university with bigger debt levels and the associated problems.