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£825m still owed by Britain’s first student-loan generation

ended 19. August 2026

More than £825 million is still owed by Britain’s first student-loan generation almost 30 years after the loans were taken out, according to new analysis by EdTech company Turing College.

Data obtained by Turing College from the Student Loans Company (SLC) under the Freedom of Information Act, revealed that 88,057 borrowers who took out the very first income-contingent student loans (now called a Plan 1 loan) in the 1998/99 academic year still have outstanding balances.

More than 25 years since they completed their degrees and higher education courses, and were liable to start repaying their loans, only 20,242 of these borrowers, just over 23%, are currently making repayments. The remaining 67,815 are not currently repaying their loans.

According to SLC data, the first graduates, on three-year degree courses, to take out income-contingent loans still collectively owe more than £580 million, suggesting that for many, the expectation that a degree would lead to higher earnings and rapid repayment has not been realised.

According to SLC data, across the three cohorts, the average outstanding balance is £9,374. This ranges from £8,285 for the 2000 cohort to £9,634 for the 2002 cohort, which alone accounted for £584.4 million (70.8% of the total amount still owed).

  • What is your reaction to the figures? Nearly 30 years and students are still saddled with debt and paying them back.
  • What does it reveal? That student loans and university isn't worth it?
  • Are apprenticeships, vocational training and employer-led programmes more valuable now?

Responses by tomorrow. 

5 responses from the Newspage community

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Editor
Michelle Lawson
Director at Lawson Financial
Student debt is the only debt that increases with repayments rather than decreases. This indicates the system is broken. Not only that- the students themselves are supporting this at the outset of their career. With many professional careers needing degree standard qualifications, this could be made more vocational and a combination so that students get the job offer, on the job training and the qualification. So many leave university and don't put their degree into practice but also some knowingly keep their pay under the threshold for repayments. It needs an overhaul and students shouldn't be saddled with debt that can't be repaid- it is de-moralising all round.
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Paul Denley
CEO at Oakham Wealth Management
The headlines from the analysis sound alarming, but it risks glossing over how the loans work. Plan 1 is income-contingent: you repay 9% of income above a threshold, and anything left is eventually written off. An outstanding balance decades on doesn't necessarily mean someone is "saddled with debt" - repayments depend on earnings, not the size of the balance. In practice, it behaves less like a mortgage and more like a graduate tax.

Does it prove university isn't worth it? No. It shows that the financial return varies enormously by course and career, not by the word "degree". A good apprenticeship can now genuinely beat a weak degree financially, while avoiding student debt and providing earnings and experience from day one. The real lesson isn't to avoid university - it's to realise that not every degree is equally valuable.
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Scott Gallacher
Director at Rowley Turton
Facing what can feel like a virtual lifetime of student debt, it's hardly surprising that more teenagers and their parents are questioning whether university still pays.

As an employer, we often see numerous applications from highly qualified graduates, and even those with master's degrees, for entry or junior positions. Yet for many roles, employers, keen to get the work done, would probably rather see someone with three years' relevant work experience than someone with three years in a lecture theatre.

That doesn't mean university isn't worthwhile. For some careers it's essential and for others it can still be hugely valuable. But we seemingly created many more graduates without much thought of creating appropriate jobs for them.

And, with loans rather than grants, we've reached the point where going to university should be a financial decision as well as an academic one.

The system might not be broken, but it definitely appears to be breaking.
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Astrid Davies
Founder CEO at ADCL
The current system to enable student places at higher education institutions is broken. It is an extraordinary example of modern-day usury, where the compounding interest is a shackle on graduates' future success.

The current loan system is counterintuitive. It is woefully underperforming. It is morally wrong. As a student in the 1980s I campaigned against loans for precisely the reasons that have become the reality. Both my children are saddled with debt they will probably die still owing. That is a nonsense and nearly dissuaded them from taking the step to pursue their educational and career dreams.

It is a nonsense to widen access to higher education but then tax it with interest to a level that actively dissuades. This was, and remains, Govt disingenuity at scale. Dissuading young people away from HE pushes them toward apprenticeships, but the companies offering those are often ill equipped to support them.

Loans need a total rethink. I won't hold my breath
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
The figures suggest many graduates are carrying student debt far longer than originally anticipated. That's not necessarily evidence that university isn't worthwhile, but it does show that the link between obtaining a degree and achieving the higher earnings needed to clear that debt quickly isn't as straightforward as it once appeared.

From a mortgage perspective, student loans rarely stop somebody getting a mortgage, but they can reduce affordability because repayments are treated as an ongoing financial commitment. Many of the legal professionals I work with have repaid their student debt because their careers have delivered the earnings expected from higher education. However, not every graduate experiences that outcome.

University is increasingly a financial investment rather than simply the default next step after education, so prospective students need a clear understanding of both the career opportunities and the long-term cost of the debt they take on.