Welcome to NOXEN — the intelligence and education platform for the next generation. This week we go deeper than finance: we look at education itself — whether the path most people are told to follow is actually the right one, and what the numbers really say.
You were told a degree was the path. Nobody ran the maths. We did.
At 18, most people in the UK and US are handed one of the biggest financial decisions of their lives. Go to university, or don't. Almost every authority figure — parents, teachers, careers advisers — tells them the same thing: go. Get the degree. It'll open doors.
What those authority figures almost never provide is the actual calculation. The debt, the opportunity cost, the realistic salary outcomes, the alternatives. The decision gets made on faith, social pressure, and a vague sense that this is simply what you do.
NOXEN is not here to tell you whether to go to university. That depends on what you want to do with your life, and some paths — medicine, law, engineering — genuinely require a degree. But we are here to give you the information you should have had before you decided. Most people don't get it until years later, if ever.
So here is the actual calculation.
In England, university tuition fees are currently £9,535 per year (2025/26 academic year; rising to £9,790 for 2026/27). A standard three-year undergraduate degree costs approximately £28,600 in tuition alone. Add maintenance loans — the money students borrow to cover living costs — and the picture changes considerably.
That £53,000 is not a fixed figure. It grows. Student loans in England accrue interest from the day the first payment lands in your account. The debt grows every day you are not repaying it above the threshold — but the terms depend on which plan you are on, and this is where most coverage gets it wrong.
Plan 2 applies to English students who started university between 2012 and 2022. Interest is linked to the Retail Price Index (RPI) — during periods of high inflation it has exceeded 7%. Graduates repay 9% of earnings above £29,385 (2026 threshold). The loan is written off after 30 years.
Plan 5 applies to English students who started from 2023 onwards — meaning most people currently at university or considering it are on this plan, not Plan 2. The key differences are significant: the repayment threshold is lower (£25,000), the interest rate is lower (RPI only, not RPI+3%), but critically the loan is written off after 40 years, not 30. For younger readers making a university decision today, Plan 5 is the relevant system.
Plan 1 applies to older graduates (English students who started before 2012) and has different — generally more favourable — terms. If you started university before 2012, you are on Plan 1.
Under Plan 5, if you earn £30,000, you repay 9% of the £5,000 above the threshold — around £450 a year, or £37.50 a month. The loan is written off after 40 years regardless of how much remains unpaid.
The Institute for Fiscal Studies has found that approximately three quarters of Plan 2 graduates will never fully repay their student loans. The picture under Plan 5 is different — the lower threshold and longer repayment window mean more graduates will repay in full. For most people on either plan, the loan still operates less like a conventional debt and more like an additional tax rate applied to earnings above a threshold.
Plan 2 (pre-2023 starters): written off after 30 years, higher threshold (£29,385), higher interest. Plan 5 (2023 onwards): written off after 40 years, lower threshold (£25,000), lower interest. You will never owe a lump sum on either plan. The question is not whether you can repay it — it's whether the increased earnings justify paying an extra 9% marginal tax on income above the threshold for potentially 40 years.
The most common argument for university is the "graduate premium" — the idea that graduates earn significantly more over their careers than non-graduates. The data broadly supports this, but the detail matters enormously.
Across all graduates, the average lifetime earnings advantage over non-graduates is estimated at around £100,000 to £130,000, according to research from the Institute for Fiscal Studies and the Department for Education. That sounds significant. But it is a lifetime figure — stretched over 40 years of working — and it is an average that conceals enormous variation.
The variation by subject is striking. Law, medicine, economics, computer science, engineering, and dentistry graduates all command strong earnings premiums. But research published by the Institute for Fiscal Studies in 2018 found that one in three male graduates and one in five female graduates would have been better off financially — by the age of 30 — had they not gone to university at all, when accounting for the debt, the lost earnings during study, and the actual salaries their degree generated.
The subjects with the weakest financial returns include creative arts, social care, and some humanities degrees from lower-ranked universities. That is not a value judgement about those subjects. It is simply what the earnings data shows.
A degree from a Russell Group university in medicine, law, economics, engineering, or computer science almost certainly pays for itself many times over. A degree in a subject with limited vocational pathways from a lower-ranked institution may not. The blanket statement "university is worth it" ignores a difference that can amount to hundreds of thousands of pounds over a career.
Every conversation about university focuses on the cost of going. Almost nobody calculates the cost of the alternative path — not the alternative itself, but specifically what three years of work experience, earning, and investing from age 18 actually produces.
Take someone who leaves school at 18 and enters the workforce. They earn, on average, around £22,000 to £25,000 in their first year. They have no debt. By the time their university-attending peers graduate at 21, the non-graduate has three years of work experience on their CV, has built professional networks, and may have been promoted once or twice.
The financial mathematics are equally important. Consider the following scenario:
This is the compounding argument applied to education decisions. The money saved and invested at 18 has 42 years to grow by retirement age. The money saved and invested at 21 has 39 years. Three years of compounding at 7% average annual returns accounts for roughly a 23% difference in the final figure — before considering the student debt that the graduate is also servicing during those same years.
None of this makes university the wrong choice. Medicine, law, and engineering graduates will earn far more over their lifetimes than this calculation accounts for. But for degrees where the earnings premium is modest, the opportunity cost of three years is a number that genuinely belongs in the decision.
The British education system has historically treated university as the default and everything else as a backup. This has begun to change, but slowly. The alternatives are far stronger than most school-leavers are led to believe.
Degree apprenticeships now exist in accounting, engineering, finance, law, nursing, data science, and dozens of other fields. They combine full-time work with a fully-funded degree — meaning the employer pays the tuition fees, the apprentice earns a salary from day one, and graduates emerge with both a degree and several years of relevant experience. Deloitte, PwC, KPMG, Google, BAE Systems, and many others run degree apprenticeships. The competition for places at the top firms is intense — sometimes more so than for traditional graduate roles.
Skilled trades are genuinely undervalued. A qualified electrician in the UK earns between £35,000 and £55,000 per year once fully trained, often more for those who go self-employed. Plumbing, gas engineering, and construction management carry similar earning potential. These trades can be entered through apprenticeships, with earnings from the first day and no debt at the end.
Self-education and entrepreneurship sit at the other end of the spectrum. Bill Gates dropped out of Harvard. Mark Zuckerberg dropped out of Harvard. Steve Jobs dropped out of Reed College. Richard Branson left school at 16. These are exceptional cases — the exception rather than the rule — but they illustrate that the credential is not always the asset. In certain fields, particularly technology and entrepreneurship, demonstrable work and built projects carry more weight with employers and investors than a degree certificate.
The fastest-growing route to a degree in the UK — and arguably the best-value one available. You earn while you study, graduate with no debt, and have years of relevant work experience at the point of qualification. At top firms like Deloitte and PwC, degree apprentices work alongside traditional graduates doing the same jobs from day one.
Not all degrees are equal. This is not an opinion — it is what the earnings data from the Department for Education shows, consistently, across multiple studies.
Subjects with the strongest graduate earnings premium over non-graduates, based on published research, include: medicine, dentistry, law, economics, engineering (all disciplines), computer science, mathematics, and finance-related subjects at strong institutions.
Subjects where the graduate premium is weakest or where a significant proportion of graduates would have been better off financially without the degree include: creative arts, some social sciences at lower-ranked institutions, and subject combinations without strong vocational pathways.
Institution matters as well as subject. A law degree from a Russell Group university opens different doors than a law degree from a post-1992 institution — not because the education is necessarily inferior, but because of how employers in certain sectors screen CVs. This is a reality of the labour market, not a judgement on the quality of either institution.
Before committing to a degree: research median starting salaries for graduates in your specific subject from your specific target university. Check whether a degree apprenticeship exists in your field — many people do not know these are available. Calculate what three years of earned income and investing would produce. Then make an informed decision, not one based on social expectation.
University is the right answer for many people. It is not automatically the right answer for everyone — and for too long, young people have been making this decision without the information they needed to make it well.
University is not a scam. Medicine, law, engineering, computer science, economics — these degrees from strong institutions have clear, demonstrable, lifelong financial and professional value that substantially exceeds their cost. If you know what you want to do and it requires a degree, the answer is clear.
But the idea that university is automatically right for everyone — that 18-year-olds should take on £40,000 to £60,000 of debt without understanding exactly what they are buying and why — is a system that has historically served institutions more than students.
The most important thing is to make the decision with information. Know your subject's earnings data. Know your alternatives. Know the repayment structure. Know what compounding does to the money you save at 18 versus 21. Then decide.
That is what this issue is for.
Most graduates will never fully repay their student loans. According to the Institute for Fiscal Studies, most Plan 2 graduates (pre-2023 starters) make repayments throughout their working lives and still have a balance written off at 30 years. Plan 5 graduates (2023 onwards) repay for up to 40 years. For most people on either plan, the student loan is functionally a graduate tax, not a debt in the conventional sense.
Degree apprenticeships now cover almost every professional sector. Law, finance, engineering, data science, nursing, architecture — most major employers now run fully-funded degree programmes. The number of higher and degree apprenticeship starts in England has grown substantially since 2017. This route remains significantly underrepresented in school careers advice.
Subject and institution matter more than the degree itself. IFS research published in 2018 found that earnings outcomes for graduates vary enormously by subject and institution — far more than the headline "graduate premium" figures suggest. A computer science degree from a top university and a creative arts degree from a lower-ranked institution are categorically different financial decisions, even though both carry a similar tuition cost.
Starting work and investing at 18 rather than 21 has a measurable long-term financial impact. Three additional years of compounding at average market returns (historically 7% per annum for global index funds) produces a meaningful difference by retirement. This does not make university the wrong choice — but it is a cost that belongs in the calculation and almost never appears there.
The Real Takeaway
The people who build great careers and financial lives come from every kind of educational background. Some went to Oxford. Some did degree apprenticeships. Some left school at 16 and built businesses. Some failed their A-levels and found their path at 25.
What they share is not a credential. It is clarity — about what they want, why they want it, and what they are willing to do to get there. Education, in whatever form, serves that clarity. It is a tool, not a destination.
The decision about university should be made with full information, not social pressure. Now you have more of it.
See you next week,
— The NOXEN Team
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