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With student debt soaring, the choice of degree is now more important than ever. Some graduates may earn so little after graduating that they will never be able to pay off what they owe.
Allied Health graduates from the University of Sunderland were found to be earning just £14,600 after five years, according to data from the Department for Education (DfE). This is the lowest average graduate salary of any British degree.
Students with qualifications in physiotherapy or occupational therapy from the institution may never pay off their loans, Telegraph analysis has found. This is because the outstanding balance would have ballooned into six figures due to the interest accrued by the time it was written off.
At the other end of the scale, the degree commanding the highest salary was Computer Science at the University of Cambridge. After five years, alumni earned on average £99,600.
Both degrees have the same tuition fees – £9,250 a year – but produce average salaries that are £85,000 apart. This spread in earnings potential is unprecedented, having soared from just £56,000 when data was first published six years ago.
The earnings figure relates to the 2015/16 cohort’s PAYE salaries in the 2021/22 tax year – when the National Minimum Wage for a full-time worker came to roughly £17,000 a year.
Plan 5 student loans kicked in last autumn, with RPI-tied interest charged as soon as the first payment is made. Repayments, however, only begin the April after graduation.
These are currently set at 9pc of earnings above £25,000. The most efficient way to bear down on the debt balance and clear it is to pay it off quickly, before compound interest can accumulate.
While programmers from Cambridge are likely to trigger repayments the very first year, occupational therapists from Sunderland may never even begin repaying their loans, let alone clear the balance before it is erased after 40 years.
This is because the repayment threshold, currently fixed until April 2027, is set to be uprated by the RPI thereafter. The Office for Budget Responsibility (OBR) forecasts this to be 2pc annually in the long term.
Pay for occupational therapists has increased by an average of just 2.2pc a year over the past decade. This only marginally higher rate of wage growth isn’t enough to make up for ground lost in the first few years.
The University of Cambridge’s Computer Science degree is one of the most popular and selective in the country. Its website currently specifies a minimum offer level of A*A*A, and in 2023 there were 13 applicants per place.
Salaries skyrocket almost immediately after graduation. Within a year, median earnings came to £56,000 – already double the £27,800 figure for all UK employees that year, ONS data show.
These graduates are reaping the rewards of a sector growing at pace. The number of “Information Technology Professionals” jumped over 9.1pc between 2022 and 2023 alone, and is on track to be a million strong within the next few years. Over nine in ten of the programme’s output were in sustained employment or further study at the time of the survey.
Graduates with Allied Health degrees from the University of Sunderland are also highly likely to find work – the comparable figure being 85.7pc. And, although tuition fees match, average rent in the city is almost three times lower than in Cambridge – at just £623 monthly in July 2024 to £1,665.
According to Discover Uni, 80pc of Sunderland’s alumni said their work fitted their plans for the future, 90pc said they found their work useful and every single respondent claimed they found it meaningful.
But they are also earning substantially less, especially in the first few years of work. They made a third of what their Cambridge peers earned after one year, and less than a sixth after five years. Money isn’t everything, but this has drastic lifelong consequences for student loans.
The average student loan balance on entry into repayment by financial year in England is £48,470, according to the Student Loans Company. Adjusting this for regional differences in living costs, this would be £42,895 in the North East and £53,101 in East Anglia, according to student finance site Save the Student.
Combined with previous salary projections, if applied to graduates in 2024, Cambridge Computer Science graduates would be on track to pay off their loans entirely by 2036, paying down the principle debt from the very first year. Their counterparts in Sunderland, meanwhile, see just over £100,000 written off in 2069.
A spokesman for the University of Sunderland said: “It is important to emphasise that statistics on graduate earnings must be considered within a broader context.
“Allied Health degrees are often rooted in public service professions where salary levels are often determined by national pay scales, such as those within the NHS. These roles, while crucial to the functioning of the healthcare system, may in some cases not initially command the same salary levels as other sectors.”
Tom Allingham, student money expert at Save the Student, said: “The range in graduate earnings unearthed in this dataset is eye-watering. While we all know that your choice of degree or university can impact your earning potential, I don’t think many people would anticipate such a disparity so soon after graduation. That said, there’s much more to a degree than your graduate salary.”
He added: “All students and graduates need to be aware that their repayments will be tied to their earnings, and a significant proportion will eventually have their balance cancelled anyway.”
The University of Sunderland’s spokesman added that the figures failed to account for those choosing to work part-time, train while working, or work abroad, all of which could have a detrimental affect on short-term earnings but enhance career prospects.
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