Student debt levels making half think twice about attending University

1st July 2022

Half (49%) of university students and graduates said that the prospect of student debt made them think twice about taking up their place at university, according to new research from credit reference agency Equifax.

The large debt associated with attending university was enough to make graduates think twice, even though they go on to earn £10,000 more than non-graduates.

The research comes as the final UCAS application deadline passes on Thursday 30th, after this date prospective students have three weeks to weigh up if they want to take up their offers, and if they can afford to do so.

A third of respondents (36%) predicted that the situation would worsen as changes to student loans, including lowering the income threshold for repayments and extending the period of the loan, would deter future students from attending university. In April, major changes to student loan terms that are expected to increase the debt burden for young graduates across the UK were announced. These include a ten-year increase to the repayment period for new entrants next year; a freeze to the income threshold at which graduates since 2012 repay, and changes to the way that threshold increases over time.

For those who will start university in 2023, these changes mean they can expect to pay £750 more each year on their student loan repayments. But it is not just the freshers of the future who can expect to pay more, those who entered university this year (and every year since 2012) will be repaying about £400 more than their graduate predecessors. Half (47%) of those who benefitted from the much lower pre-2012 fees think that these changes will likely result in an intergenerational divide and over a third (36%) believe it is unfair.

Paula Roche, Managing Director of Consumer Solutions at Equifax UK said “With the looming UCAS offer deadline, 17- and 18-year-olds will be asking themselves whether or not they can afford to go to university in the coming days. This is increasingly becoming a more agonising decision as our research shows that graduates are becoming more concerned that going to university isn’t paying off. In turn, our research has also shown that these worries mean that graduates are ending up more anxious about managing their money than peers who didn’t go to university. Prospective students will be seeing these facts and asking themselves if university really is all that when it comes to future financial security.”

“While student loan repayments might be a cause for worry for many people, it is important to remember that they don’t appear on your credit score, and that repayments vary by income, so people are usually only paying back what they can afford.”