Just 28% of New Graduates Paying Back Student Loan
Money Saving

Just 28% of New Graduates Paying Back Student Loan

01 September 2016

New data has revealed that fewer than 28% of recent graduates - the first students to graduate having paid up to £9,000 in fees - have started paying back their student loan.

The figures were calculated by Vouchercloud as part of their investigation into student spending and finances. These show that with a median salary of £21,000, only half of the most recent cohort of graduates who immediately entered full time work are paying any money back on their student loan as part of their paypacket.

With many of the graduates from mid-2015 still unemployed, working part-time or continuing their studies, this leaves fewer than 3 in 10 graduates in total earning enough to repay their larger student loan.

The cap on tuition fees was lifted to £9000 in 2012, with the benchmark for starting to repay your loan rising from £17,495 to £21,000. Students who studied an undergraduate degree for three years graduated in summer last year, and have been eligible to make repayments as of April 2016.

76% of institutions charge the full £9,000 fees, and with plans announced in May to allow the top-performing universities to extend their fees beyond £9,000 a year, many students could be left with their loan for even longer - particularly if they are paying off nothing or very little early in their career.

The data - released by HESA earlier this month and collated by Vouchercloud - also shows that the average salary for many sectors falls well below the threshold for paying back any student loan, with the average Philosophy, Languages, History and Media student earning well below £20,000 on average.

56% of graduating students even admitted that their degree ‘was not worth’ the £9,000 fees in NUS research released last year, with 17% stating that their degree was worth ‘significantly less’ than what they paid.

Chris Johnson, Head of Affiliate Operations at vouchercloud, commented:

"There was a suspicion, in among the initial uproar, that almost the majority of students would not be paying off the entirety of their loan in their working lifetime when these changes kicked in. However, it's still surprising to see just how few students have hit the threshold straight out of university".

He continued:

"With stats from HESA last year showing that over 60,000 graduates were working non-professional roles after they graduated - and numbers set to be similar this year - there are many students who eventually could end up paying a fraction of the total cost of their degree, putting financial pressure on them for life and resting them under a permanent cloud of debt".


71% of graduates are in employment, based on 67% working domestically and 3% working abroad (numbers are rounded) (Table 1, HESA - Destination of Leavers from Higher Education for Students in the United Kingdom Report, 2016).

Only 80% of these students are working full time - 57,880 of the 286,330 are either working part-time or otherwise. (HESA -Destination of Leavers from Higher Education for Students in the United Kingdom Report, 2016).

Based on the median salary sitting at £21,000 (Table 10, HESA - Destination of Leavers from Higher Education for Students in the United Kingdom Report, 2016), we can derive that half of all graduates are earning above and half of all graduates are earning below.

With £21,000 being the new threshold for starting to pay back your student loan, we learn that only half of all graduates that have entered the workforce are earning enough to start paying back their loan.

71% of graduates are working, and 50% are earning above that threshold - 34.6% of students. 80% of this figure - to discount the students who are working part-time in the dataset - gives you a total of 27.6% of students, who graduated in 2015, who are working full time and earning enough to start paying back their student loan.

2014/15 data includes students who were studying degrees for longer than three years, and therefore won't have been being charged up to £9,000 - this figure is just an estimate (though this would typically discount most medicine, dentistry and scientific subjects from the dataset, pushing the 27.6% figure even lower due to high employment rates in these areas).

Note - percentages may be rounded, so there is a 1% margin of error.


HESA - Destination of Leavers from Higher Education for Students in the United Kingdom


Graduate Jobs - Average Starting Salary


The Independent - 76% of Institutions charge £9k fees


NUS Research - Courses 'not worth' fees



Get in touch with Ben Harrow here for more information, or with any questions and queries.

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