Graduates from middle-income families can only fully repay student loans if they pursue high-paying medicine or law careers, a study suggests. The ‘majority’ will be unable to pay them off entirely before they are written off after 30 years, experts warn. It comes as more universities are set to announce they will charge record-breaking tuition fees of £9,250 a year from next autumn. Durham, Kent and Royal Holloway have already declared plans to hike them above £9,000. Researchers have found that the majority of those that went to university will not be able to pay off their loans unless they are lawyers or medics The Centre for Economics and Business Research estimates the average cost of degree study is already £20,000 a year, with undergraduates needing to supplement loans by working or with parental support. Middle-income students eligible for £7,023-a-year maintenance loans accrue around £52,000 worth of tuition fee and living costs debt after three years. Richer students eligible for smaller loans – the minimum is £3,821 – end up with around £41,000. And those studying longer courses such as medicine, veterinary science or architecture are likely to owe around £94,000 for a five-year course. The report, commissioned by private client investment house Killik & Co, claims that if students are unable to repay their loans immediately upon graduating, this becomes ‘the most expensive way of funding university’. Outstanding balances start incurring interest at a 3 per cent rate above inflation while students are still at university. Once earnings reach £21,000, graduates must start repayments at a minimum level of 9 per cent of earnings. But upon graduation, ‘most professional salaries cannot keep up’ and repayments may end up being ‘double the original size of the loan’, the study said. Researchers analysed 12 professions and average salaries over the 30-year lifetime of student debt for graduates from middle-income homes. Only doctors and lawyers would be able to repay loans in full before the debt was cancelled after 30 years. The report says: ‘Many of the other professions, including the relatively well-paid ones, never manage to pay off the loan because it can easily rise at a faster rate than salaries.’ In 2010 students protested (pictured) about the increase in university fees to £9,000 a year but now some are set to announce they will charge record-breaking tuition fees of £9,250 a year from next autumn Sarah Lord, partner and director of wealth planning at Killik & Co, said many young people were ‘starting their adult careers on the financial back foot’. She said: ‘The reality is that the default option of using a student loan as the primary means of paying for a university education is far less attractive than it used to be: other options now need to be considered. ‘In particular, families need, like never before, to look at ways of offering support.’ The investment house recommends families use a Junior ISA (JISA) to contribute to university costs and reduce levels of student loans. A Department for Education spokesman said: ‘We know there is still more to be done to improve value for money in parts of our HE system – which is exactly why we are introducing measures such as our Teaching Excellence Framework, which will incentivise all universities to raise the quality of their teaching… and focus on improving graduate outcomes.’ Recent research from Aviva found that 37 per cent of 2,000 people who attended university regretted doing so because of the amount of debt incurred.
Doctors and lawyers will be the only UK graduates who can pay off their student debt , warns the Centre for Economic and Business Research , with a " majority " unable to pay off the debt entirely before they are written off after 30 years . " Many of the other professions , including the relatively well - paid ones , never manage to pay off the debt because it can easily rise at a faster rate than expected , " says the report , adding that " families need , like never before , to look at ways of providing support , " thereby adding further strain to the " Bank of Mum and Dad . " This comes as Durham , Kent and Royal Holloway universities announce plans to hike the fees above £ 9,000 . A recent report by Aviva found that 37 % of 2,000 UK graduates now are leaving university due to the debt incurred .