This article provides some insights around UK graduates and their student loans, based on data generated by users of this site.
The majority of users have Plan 2 loans, a third have Plan 1 loans and the remainder have Postgraduate loans.
Number of Loans
The overwhelming majority of users only had one loan to their name. Only 4.33% had two and 0.08% of users had three.
In this section we look at the incomes provided by users, rounded to the nearest £2,500, graphed on a bar chart. Incomes beyond £100,000 have been filtered out (there were some random entries for £500,000 and £1,000,000) to ensure the bar chart remains readable.
If we then map the different income levels on top of this distribution, we can get an idea how many users fall into each UK income percentile range. As a reminder the income level splits used on this site are as follows:
- Living Wage and Below earner: 1-24th percentiles of UK earners
- Low earner: 25-49th percentiles of UK earners
- Mid earner: 50-79th percentiles of UK earners
- High earner: 80-94th percentiles of UK earners
- Top earner: 95-99th percentiles of UK earners
According to the above income data:
- 5.2% of users fall into the Living Wage and Below earner bracket
- 12.6% of users fall into the Low earner bracket
- 43.9% of users fall into the Mid earner bracket
- 35.8% of users fall into the High earner bracket
- 2.5% of users fall into the Top earner bracket
Plan 2 Analysis
In this section we look at the debt distribution and the outcome at the end of each repayment period for all users with a Plan 2 loan.
All user provided debts have been rounded to the nearest £2,500. Debts beyond £100,000 have been filtered out to ensure the bar chart remains readable.
Based on this data, 56.4% of users had an outstanding debt between £40,000 to £60,000.
The average debt is ~£47,800.
Now let's take a look at the outcomes of all Plan 2 loans; how many were paid off and how many were written off?
In total, roughly 60% of users are predicted to have their loans written off by the end of the repayment period, vs 40% of users who are predicted to pay it off. This is much higher than the government analysis in which they predict only 20% of people will pay off their loan in full, including excess interest.
An explanation for this is that we can see many more users have incomes which put them in the Mid to High income brackets.
Outcomes broken down per income bracket looks as follows:
- 99% of Top earners pay off their loan
- 70% of High earners pay off their loan
- a third of Mid earners pay off their loan
- less than a fifth of Low and Living Wage and Below earners pay off their loan (and many I suspect are due to predicted incomes which push them into higher income brackets later on in the repayment period)
N.B: This data does not take into account predicted incomes. For instance if someone has an income which puts them into the Low earner bracket, but they predict themselves to have a Mid or High level income 5 years later, and thus make it more likely to pay off their loan, they would still be flagged as a Low earner who paid off their loan.
Plan 1 Analysis
- 82.85% of users pay off their loan
- 17.15% of users have their loan written off
- 75.96% of users pay off their loan
- 24.04% of users have their loan written off
Most users of this site have a Plan 2 loan. This makes sense as Plan 2 loans cost graduates much more than other repayment plans, and so many more people who have Plan 2 loans would be interested in finding out how much their loan might cost them and whether trying to pay it off is worth it or not.
Based on the income distribution of users, 53.9% have an income (£37,500 or more) which makes it very likely that they will pay their loan off in full, including excess interest (assuming their debt when graduating is around £40,000. If it is more or less they might pay back a different amount).
The average debt of someone with a Plan 2 loan seems to be around ~£47,800.
The more you earn, the more likely it is you pay off your loan. This comes as no suprise, as repayment depends entirely on how much you earn.To get an idea of how much you might end up paying back, try out our calculator