Is a university degree the best option for your future career?

Students on graduation day at Portsmouth university, throwing their mortarboard hats into the air

For most people in Britain, university is something that they do away from home. About 80% move into rented rooms while they are studying in a city that might be far away from their parents. This makes university expensive – and then there are Tuition Fees to pay as well.

Tuition Fees for university in England and Wales have been unpopular since they were introduced in 1998 because it seems like there is a bigger barrier to low-income families. The fees are up to £9,250 a year.

However, the system is less unfair than it seems. People who cannot afford to pay Tuition Fees can apply for a Tuition Fee Loan. For living costs there is a Maintenance Loan of about £11,000 a year.

This is a large amount of debt. But in some ways it is more like a graduate tax. Interest is charged immediately.  But you only start repaying the loans when you have finished studying and your income is over a certain threshold (currently £25,725 a year).

Once you earn more than the threshold, you only pay back 9% of your income above it. So for example, if you earn £33,000 a year, you’ll have to pay £648 a year, which is £54 a month (£33,000-£25,725 x 9%=£648).

If your income drops below the threshold (ie £25,725), you stop paying back the debt.

The threshold is a bit below the average salary in Britain (currently £29,000).

So yes, you might be paying back this loan for years and years – but only if you are earning roughly the average wage in Britain, or above. You can also pay it back in full at any time. After 30 years, it gets cancelled.

If you never earn over £25,725 a year, you will never have to pay back the loan.

When you make a decision about whether to go to university, bear in mind that you need to be highly qualified for many jobs that give above-average salaries. However, a university degree is not the only way to do this – apprenticeships are one other option, for example. If you are sure you want a degree, attending a university close to home or studying with the Open University can help lower the overall cost.

There is more information about repaying tuition fees from UCAS, the national University and Colleges Admissions Service.

Image: Enrico Della Pietra/Dreamstime

Was this useful?