One of the most important considerations for prospective students is understanding how student debt will impact their future financial situation. With tuition fees at £9,250 per year and living costs continuing to rise, many students are concerned about the long-term implications of their education investment.
The good news is that higher education continues to provide significant financial benefits throughout your career. Graduate earnings typically far exceed those of non-graduates, and the UK's income-contingent repayment system means you only repay when you can afford to do so.
This comprehensive analysis examines current student debt levels, graduate earnings by subject, and provides practical guidance on making informed decisions about your education investment.
Key Statistics 2025
Average graduate starting salary
Average total student debt
Minimum repayment threshold
Current Student Debt Levels
Average Debt by Study Level
Undergraduate (3 years)
Postgraduate (1 year)
Interest Rates and Accumulation
Student loan interest rates in 2025 are set at 7.6% while studying and for the first year after graduation. This means your debt will grow while you're studying, but the repayment system is designed to be affordable based on your income.
Interest Rate Structure
- • While studying: 7.6% (RPI + 5%)
- • After graduation: 7.6% for income above £49,130
- • Graduates earning £27,295-£49,130: Variable rate
- • Graduates earning below £27,295: No repayments
Graduate Earnings by Subject
Your choice of degree subject significantly impacts your earning potential. Here's a breakdown of median graduate salaries by subject area, based on 2025 data:
| Subject Area | Starting Salary | 5-Year Median | 10-Year Median |
|---|---|---|---|
| Medicine & Dentistry | £35,000 | £55,000 | £75,000 |
| Engineering | £32,000 | £45,000 | £58,000 |
| Computer Science | £30,000 | £42,000 | £55,000 |
| Law | £28,000 | £40,000 | £52,000 |
| Business & Management | £26,000 | £38,000 | £48,000 |
| Economics | £28,000 | £42,000 | £56,000 |
| Psychology | £24,000 | £32,000 | £40,000 |
| Social Sciences | £22,000 | £30,000 | £38,000 |
| English Literature | £20,000 | £28,000 | £35,000 |
| Creative Arts | £18,000 | £25,000 | £32,000 |
Important Note
These figures represent median salaries and individual earnings can vary significantly based on factors such as location, employer, additional qualifications, and career progression. Many graduates in traditionally lower-paid fields go on to successful careers with higher earnings.
Loan Repayment Calculator
Understanding how much you'll actually repay depends on your income. Here are some example scenarios:
Scenario 1: Average Graduate
Scenario 2: High Earner
Scenario 3: Lower Earner
Scenario 4: Very High Earner
Return on Investment Analysis
Lifetime Earnings Premium
Despite the costs, higher education continues to provide substantial financial returns over a lifetime:
Average Graduate Premium
Additional lifetime earnings compared to non-graduates
High-Earning Subjects
Additional lifetime earnings for medicine, engineering, and law
Non-Financial Benefits
Career Opportunities
- • Access to graduate-level positions
- • Faster career progression
- • Professional networking opportunities
- • Greater job security
Personal Development
- • Critical thinking skills
- • Research and analysis abilities
- • Communication skills
- • Personal confidence
Debt Management Strategies
During Your Studies
Minimize Borrowing
- • Only borrow what you need
- • Consider part-time work
- • Apply for bursaries and scholarships
- • Budget carefully
Maximize Value
- • Attend all lectures and seminars
- • Use university resources fully
- • Build professional networks
- • Gain relevant work experience
After Graduation
Career Development
- • Pursue professional qualifications
- • Seek promotions and career moves
- • Develop marketable skills
- • Network professionally
Financial Planning
- • Understand your repayment terms
- • Keep contact details updated
- • Don't overpay unless beneficial
- • Focus on other financial goals
Making an Informed Decision
While student debt levels may seem daunting, it's important to view higher education as an investment in your future. The UK's income-contingent repayment system ensures that you only pay when you can afford to, and the substantial earnings premium for graduates means that higher education continues to offer excellent value for money.
Your choice of subject and career path will significantly impact your financial outcomes, but even in traditionally lower-paid fields, graduates typically earn more over their lifetime than non-graduates. The key is to make informed decisions based on your interests, aptitudes, and career goals.
Remember that the benefits of higher education extend far beyond financial returns. The skills, knowledge, and experiences gained at university provide valuable foundations for both personal and professional success throughout your life.
Next Steps
Use this information to make informed decisions about your education and career path. Consider your interests, research potential earnings in your chosen field, and explore funding options to minimize your debt burden.