Graduates considering a master’s degree are being urged to look carefully at the long-term cost of postgraduate borrowing, as many former students face repayments on both undergraduate and postgraduate loans at the same time.
For many students, postgraduate study can feel like a natural next step. A master’s degree can help people specialise, change career direction, enter a competitive profession or develop deeper knowledge in a subject they care about.
But the financial reality of taking on another loan can be more complicated than it first appears.
Recent reporting has highlighted concerns that graduates with postgraduate loans may face additional pressure once they start earning. The Guardian reported that some UK postgraduates feel overwhelmed by the burden of holding both undergraduate and postgraduate debt, with concerns raised about repayment thresholds, interest rates and the way repayments are taken at the same time.
Postgraduate loans are not simply added to an undergraduate loan and repaid as one combined amount. They are treated separately, which means graduates may have deductions taken for both loans once they are earning above the relevant repayment thresholds.
For students planning their next steps, this matters. The decision to study for a master’s degree should not only be based on the subject, university or career ambition, but also on the likely cost, repayment terms and whether the qualification is likely to improve future opportunities.
For the 2026/27 tax year, the postgraduate loan repayment threshold is £21,000. The repayment rate for postgraduate loans is 6% of income above that threshold. This is separate from undergraduate loan repayments, which usually have their own threshold and repayment rate depending on the plan.
That means a graduate earning above the thresholds could be paying back both an undergraduate loan and a postgraduate loan from the same salary.
This can reduce monthly take-home pay, particularly for graduates in the early stages of their careers. For those living in expensive cities, paying rent, commuting, supporting family or trying to save, the extra deduction can make a noticeable difference.
The issue becomes even more important because many students already leave university with significant undergraduate debt. Taking on a postgraduate loan may feel manageable at the point of application, but the impact is often felt later, when repayments begin.
Postgraduate study can still be a very positive investment. Some careers require a master’s qualification, while others may value the specialist knowledge, research skills and confidence that further study can provide.
For students who are passionate about a subject, postgraduate study can also offer the chance to develop ideas in greater depth, build academic confidence and access professional networks.
However, students should be realistic about the financial commitment. Tuition fees, rent, travel, food, books and everyday living costs can all add up. In some cases, the postgraduate loan may not cover the full cost of the course and living expenses, leaving students to find additional funding.
That can mean relying on savings, family support, part-time work, scholarships or bursaries. For students from lower-income backgrounds, this can make postgraduate study feel harder to access, even when they have the talent and ambition to succeed.
Campaigners have argued that the current student loan system needs reform. In The Guardian’s reporting, Oliver Gardner of Rethink Repayment called for fairer terms, including higher thresholds, changes to interest and lower repayment percentages.
The wider student loan system has also come under pressure. The Times reported that only a small proportion of Plan 2 graduates are currently repaying enough to reduce their overall debt, with many seeing balances grow because interest is outpacing repayments.
For students, this does not mean postgraduate study should be avoided. But it does mean the decision should be made carefully and with a clear understanding of the numbers.
A master’s degree may increase opportunities in some sectors, but it does not automatically guarantee a higher salary. Students should look closely at the career paths linked to their course and ask whether the qualification is essential, useful or simply desirable.
Before applying, students may want to check whether employers in their chosen field genuinely require postgraduate study. In some industries, work experience, internships, professional qualifications or entry-level jobs may be just as valuable as another year at university.
Students should also look at funding options early. Universities often offer scholarships, fee discounts, alumni bursaries or support for students from underrepresented backgrounds. Some professional bodies, charities and trusts may also offer funding, particularly for specific subjects or career areas.
Another option is to consider part-time study. This can allow students to work while studying, although it also requires careful time management. For some, it may be a more affordable route than taking a full year out of work.
Employer-funded postgraduate study may also be possible in certain sectors. Some employers support staff to gain further qualifications once they are in work, which can reduce the need to take on extra borrowing before starting a career.
Students should also use repayment calculators and official guidance before making a decision. The Government’s student loan guidance explains that repayments depend on income and loan plan, while independent student finance sites can help graduates estimate how multiple loans may affect monthly pay.
For final-year students, the key message is not to rule postgraduate study out, but to go into it with a clear plan.
A master’s degree can be valuable, but it should be part of a wider career strategy rather than an automatic response to a difficult job market.
Students should ask themselves some important questions: Why do I want to do this course? Will it help me enter a specific career? How much will I need to borrow? What will my repayments look like once I am working? Are there other routes into the same profession?
Postgraduate study can open doors, but it can also add financial pressure. Understanding both sides of the decision will help students make choices that support their future rather than leaving them surprised by extra deductions later.
For graduates considering a master’s degree, the best advice is to research carefully, compare options and make sure the course is worth the investment.