The danger-zone salary that will see you NEVER repay your student loan

UNIVERSITY graduates earning below a certain wage are unlikely to EVER pay off their student loan, new analysis reveals. Graduates on Plan 2 loans will likely never pay back their loan fully if they’re earning under £45,000 six years after graduation. You’ll be on a Plan 2 loan if you started an undergraduate course from September 2012 and July 2023 in England, or from September 2012 onward in Wales. The average graduate has a loan worth a staggering £52,100. Sign up for the Money newsletter Thank you! Under the loan terms, graduates must repay 9% of their salaries above £29,385 a year. But they are also charged interest, which is in line with the Retail Prices Index measure of inflation – plus up to an extra 3% if you’re a higher earner. If you haven’t paid off your loan within 30 years, the remainder is wiped. Only 32% of 2022 Plan 2 graduates are expected to repay their loans in full, according to analysis of official figures by the Financial Times. The analysis suggests you would need to earn between £45,000 and £50,000 before the chance of repaying in full reaches 50%. Meanwhile, around 55% of students who took out newer Plan 5 loans in 2025 are likely to pay off in full. Most read in Money These loans are only written off after 40 years. Plan 2 student loans have come under scrutiny in recent months as graduates have pushed for changes to the tuition fee system in England. The Treasury Committee admitted in July that ministers mis-sold loans to an estimated five million students. They said information promoting university courses had compared monthly repayments to trivial costs such as a mobile phone contract or cinema trip. In reality, many graduates have hundreds of pounds taken out of their salaries each month. The Government has also been criticised for repeatedly freezing repayment thresholds, which has left graduates paying more as wages have risen over the years. Campaigners have been calling for the Government to reverse its decision to freeze the repayment threshold at £29,385. Comment now