I Owe £60,000 for a Degree That Doesn’t Pay — What Now?

By the First Wage Editorial Team · Published 29 September 2026 · 9 min read

Priya’s Statement

Priya, 29, qualified as a speech and language therapist after an undergraduate degree in Cardiff and a master’s in Manchester, funded partly by a Postgraduate Loan on top of her Plan 2 undergraduate borrowing. She works for the NHS in Leeds. Her combined student debt, last time she checked her Student Loans Company account, was a little over £61,000.

She’d opened the app on a quiet Tuesday evening, mostly out of morbid curiosity, and the number made her stomach drop. She does genuinely valuable, skilled work. She also, by her own account, “will never in my life earn enough to actually clear that.” For about a week afterwards she couldn’t stop thinking about it — doing mental maths about interest, picturing the balance rising every year, wondering if she’d made an expensive mistake choosing a caring profession instead of something better paid.

What actually calmed Priya down wasn’t ignoring the number. It was understanding, properly, how the system that number sits inside actually works — and realising that the balance she’d been staring at was almost completely disconnected from what she pays each month, what she can afford, and what her life actually looks like.

Your Balance Is Not Your Repayment

This is the single most important reframe for anyone in Priya’s position: the total balance on your account has almost no bearing on your monthly repayment. Your repayment is calculated purely from your income. On Plan 2, you pay 9% of everything you earn above £29,385 a year — whether your outstanding balance is £8,000 or £120,000, the monthly deduction from your payslip is identical for the same salary. A Postgraduate Loan adds another 6% on top, calculated against its own lower threshold of £21,000, run alongside your undergraduate plan rather than instead of it.

That means a graphic designer earning £32,000 with a £15,000 balance pays exactly the same monthly amount as a graphic designer earning £32,000 with a £70,000 balance. The size of the number on the statement is, for almost all practical day-to-day purposes, irrelevant to what leaves your bank account.

The Interest Is Real, But It Doesn’t Function Like Normal Debt Interest

Postgraduate and higher undergraduate balances do accrue RPI-linked interest, and for many graduates the balance genuinely does grow over time rather than shrink, especially in the early years of a career on a modest salary. This is uncomfortable to look at, and it’s fair to acknowledge it rather than pretend it isn’t happening. But because repayments are capped by income rather than by what’s needed to keep pace with interest, a rising balance doesn’t translate into rising monthly pressure. It translates, in most cases, into simply reaching the write-off date with a larger uncleared balance than you started with — which, again, gets wiped entirely regardless of size.

Reframing It as a Graduate Tax

Economists and commentators have long pointed out that the UK system functions much more like a graduate tax than a conventional loan, and for someone in Priya’s position that framing tends to be genuinely more accurate than “debt.” A mortgage or a car loan has a required monthly payment that doesn’t move with your income, chases you through the courts if you default, and shows up on your credit file. Priya’s Postgraduate and Plan 2 loans do none of that. If she’s made redundant tomorrow, her repayment drops to zero automatically. If she takes an unpaid career break, nothing is owed. If she never earns enough to clear it, it’s written off after 30 years without penalty, without a black mark on her credit file, and without anyone chasing her for the difference.

Thinking of it as a slightly higher marginal tax rate on your income above a threshold, rather than a debt you need to “pay off,” is not just a coping mechanism — it’s a fairly accurate description of how the mechanics actually work.

What’s Worth Doing Practically

None of this means there’s nothing to think about. A few things are genuinely worth Priya’s — and anyone’s — attention:

1. Check which repayment plans apply to you. If you have both an undergraduate plan and a Postgraduate Loan, they run in parallel with separate thresholds, so it’s worth knowing both numbers rather than assuming one covers everything.
2. Consider whether overpaying ever makes sense for you specifically. For most people with a large balance relative to their likely lifetime earnings, voluntary overpayments are close to pure waste of money, since the loan would have been written off anyway. This is a case-by-case calculation that depends heavily on career trajectory — see our guide on paying off loans versus investing for the fuller decision framework.
3. Don’t let the balance drive career decisions on its own. A large loan balance is a poor reason to stay in, or leave, a particular job. Career decisions are worth making on their own merits — pay, progression, wellbeing — rather than as a reaction to a number that mostly won’t change your monthly finances either way.
4. Watch your payslip, not your Student Loans Company balance. The figure that actually affects your life month to month is the deduction on your payslip, calculated from your income. Checking that regularly is far more useful than checking the total balance, which for many graduates will barely move, or will rise, for years regardless of what they do.
5. Get real financial advice if the anxiety persists. If the size of the balance is genuinely affecting your wellbeing or your ability to make other financial decisions (buying a home, starting a family, planning for retirement), a free session with MoneyHelper or a conversation with a qualified financial adviser can help put the numbers into context specific to your situation.

Frequently Asked Questions

Does a bigger student loan balance mean a bigger monthly repayment?

No. Your monthly repayment is based entirely on your income above your plan’s threshold, not your total balance. Someone earning £30,000 pays the same monthly amount whether their balance is £10,000 or £100,000.

Can my student loan balance keep growing even while I’m repaying it?

Yes, this is common, especially on lower salaries where the interest accruing can outpace what your income-based repayments cover. It’s uncomfortable to see, but it doesn’t increase your monthly repayment or put you at risk of default in the way it would with a standard loan.

Should I try to pay off a large student loan balance faster with lump sums?

For many graduates on Plan 2, Plan 4, or Plan 5 with a large balance relative to likely lifetime earnings, overpaying can mean paying money that would otherwise have been written off anyway. It depends heavily on your expected career earnings — it’s worth running the numbers for your specific situation rather than assuming overpaying is always the safer choice.

Will having £60,000 of student debt affect my ability to get a mortgage?

It doesn’t appear on your credit file, but lenders do factor your monthly student loan repayment into affordability assessments, since it reduces your disposable income. It’s your monthly repayment amount that matters here, not your total balance.

Related Guides

• Should You Pay Off Student Loans or Invest First?
• Student Loan Write-Off in 2026: What’s Actually True Right Now
• Student Loan Repayments: How They Show Up on Your Payslip