Graduates from top UK universities are finding it harder than ever to reach the salary threshold to start paying back their student loans — raising fresh questions about whether university still guarantees a good job.
For years, students were told that getting into a Russell Group university — the likes of Oxford, Manchester, Leeds or Bristol — was a golden ticket to a solid career and financial stability. But new figures paint a very different picture of graduate life in 2025: one where even elite-university degrees don’t guarantee well-paid work, and thousands are still earning below the threshold to begin paying off their student loans.
According to Freedom of Information data revealed by The Times on 21 October 2025, just 44,527 graduates from Russell Group universities began repaying their loans within two years of finishing their studies last year — down from around 57,000 in previous years. That’s a drop of more than 20 per cent, showing how the post-uni job landscape has shifted fast.
The fall in loan repayments isn’t because graduates suddenly forgot to pay. It’s because fewer of them are earning enough to hit the £28,470 annual income threshold required under “Plan 2” loans.
At the University of Oxford, the number of repayment-eligible graduates fell by about 31 per cent. At Imperial College London it plunged by 44 per cent, and at the University of Southampton it was almost half.
Put simply, even the country’s most prestigious universities are producing more graduates who can’t find jobs that pay above £30,000. The graduate market — already overcrowded — has been hit hard by post-pandemic slowdowns, a shaky economy, and companies cutting back on entry-level roles.
The knock-on effect? Thousands of well-qualified twenty-somethings juggling multiple part-time or freelance jobs, relying on family support, or heading back into education just to stay competitive.
“I honestly thought the hardest bit was getting my degree,” says Amara, 24, who graduated from Leeds University in 2023. “I applied to about forty grad jobs. I’ve had two interviews. Right now I’m working in retail again, and it’s still not enough to start paying my loan back.”
Many students describe the pressure of needing to “do more” to stand out — whether that’s postgraduate study, unpaid internships, or adding new skills through short courses. But these all come with extra costs, making the return on investment for a degree look increasingly shaky.
Careers advisers have noticed what they call a rise in “panic master’s” — students rushing into postgraduate degrees not because they have a clear academic goal, but because they’re unsure what else to do next.
Data from UCAS shows a 12 per cent rise in taught postgraduate applications compared to pre-pandemic levels. Some universities even market master’s degrees as “career accelerators,” though that’s not always how it works out.
“Students are trying to buy time,” says one university careers officer. “But taking on more debt for another qualification doesn’t fix a weak job market.”
Employers, meanwhile, admit they’re still cutting back. Graduate-scheme recruitment has fallen across several industries — particularly in finance, media, and public-sector roles. The Institute of Student Employers reported a nine per cent drop in vacancies this year.
Part of the problem is automation and AI. Entry-level research, admin, and writing roles are being automated or outsourced, meaning companies need fewer grads to fill the same functions. At the same time, small firms that might normally hire interns or juniors are struggling with higher costs, so they’re holding off on recruitment.
Even those who have landed jobs say they’re struggling to get by. London graduates earning £30k still face rent that eats half their salary. Others outside the capital report moving back home to save money.
According to the Resolution Foundation, the average graduate aged 22–29 spends 42 per cent of their income on rent and utilities — the highest level since records began. Add in student-loan repayments (once they start), national insurance, and tax, and disposable income shrinks fast — often leaving grads feeling like they’re no better off than before university.
The Department for Education insists that a degree “remains one of the best investments a young person can make,” pointing to higher average lifetime earnings for graduates. But critics argue that average data masks a growing divide — where a small group of high-earning professionals push up the numbers, while many others earn modestly in unstable jobs.
The debate over “value for money” has reached the Treasury too. Some economists have floated the idea of linking tuition fees to graduate outcomes — effectively charging universities less for degrees with weaker employment stats. For students, that could mean lower fees for some subjects but higher ones for courses seen as “high return.” It’s a controversial idea, but it shows how the conversation around higher education is changing.
Experts say that while the system may feel stacked against graduates, there are still ways to adapt. Diversify your job search — many roles don’t use the word “graduate” in the title. Use alumni networks. Learn short, practical skills like data analysis or project management to stay employable.
The bigger question is what this means for the next generation of students — especially those about to start paying higher tuition fees under the new inflation-linked model from 2026. If graduate pay doesn’t rise, and more students fall below repayment thresholds, the government could face billions in unpaid student debt.
For now, students and graduates are left asking a simple question that used to have an easy answer: is university still worth it?