Students gunning for high-paying jobs in law, medicine and finance could save £20k by taking a gap year, experts claim

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Student loan reforms mean wannabe lawyers ‘could gain substantially’ by delaying uni studies until 2023

Students planning to enter high-paying professions such as law, medicine and finance are being advised to take a gap year to save £20,000 as a result of reforms to the student loan system coming into force next year.

The government announced in February that the student loan repayment threshold will be cut from £27,295 to £25,000 and the period over which graduates pay back their loans will increase from 30 to 40 years. The reforms will also see the rate of interest paid by students reduce from the RPI (Retail Price Index) inflation rate plus 3% to just RPI.

New research by the Institute for Fiscal Studies (IFS) shows that high-earners commencing their studies in 2023 will repay around £20,000 less than those starting this year, as a result of the lower interest rate.

High-earners are understood to be those with an annual income of £50,000 or more by the time they reach 30. Legal Cheek‘s Firms Most List shows fresh-faced trainees can start on salaries of £50,000 or more at some of the City’s elite law firms.

According to the analysis graduates with lower to middling earnings will be hit hardest by the changes, with a lifetime loss of around £30,000. These grads enjoyed large taxpayer subsidies before the reforms, according to the IFS, but will now have to pay back a much larger share of their loans under the new system.

These graduates are better off starting university this academic year to benefit from the shorter repayment period and higher earnings threshold for loan repayments, the data suggests.

“Overall, the highest-earning borrowers will be better off under the system from 2023 onwards, and low-earning borrowers will be better off under the 2022 system,” think-tank IFS said. “For 2022 school leavers, this means that incentives regarding whether to take a gap year will crucially depend on their expected future earnings.”

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The IFS also found the new student loans system will be “substantially less generous” for middle-earning graduates from the 2012–22 starting cohorts. They are affected by changes in repayment thresholds but do not benefit from lower interest rates and stand to lose around £20,000 compared to the old system.

Elsehwhere, research by recently found the average law student will accumulate £96,444 of debt upon graduation. Law ranked 20th in the table of 34 subjects which shows little difference in the amount of debt accrued at the top-end.

Psychology grads take out the most in loans (£99,505), according to the research, whilst economics grads take out the least (£56,127).

The data was collated prior to the government reforms and so students could face even higher levels of debt. The IFS this week estimated the student loan interest rate could rise to as much as 12%. It will be capped for 2023 starters, however, and there won’t be a huge impact on loan repayments in the long run.

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Sceptical Tory

“research by recently found the average law student will accumulate £96,444 of debt upon graduation”

We all know that this kind of research isn’t worth the paper it’s written on, but how is this even possible?

Worst case scenario:
4 years of student loan at £9,250 p.a. = £37,000
4 years of the maximum maintenance loan for students in London = £12,382

Students may accumulate a couple of thousand pounds of interest by the time they graduate but this doesn’t change much.

Even if we take the cost of professional training into account:
Cost of LPC in London at BPP = £17,191
Cost of BPTC in London (estimate) = £18,000

So is assuming that the “average” law student:
– has completed a four-year degree (or studied something else for a year and then started a law degree) *IN LONDON*
– is eligible for the highest maintenance loan for all four years of their studies
– has then taken on further debt in order to fund some of their LPC or BPTC (no savings, scholarships, sponsorship, etc.)

Yeah, this sounds like bull.



You’re not accounting for interest. Sometimes it can take years after graduating to get to a position where one is earning £50k and over @30.


Sceptical Tory

Read the quote again.

“research by recently found the average law student will accumulate £96,444 of debt upon graduation”

I doubt that anyone is accumulating tens of thousands of pounds of interest by the time they graduate. By the time they’re 30 and/or earning £50,000? That’s another story.



Agree tbh. My debts after 4 years of LLB + LPC (self funded) in London were like £60k. That’s probably higher than most graduates.


law grad

Who does a four year law degree? It’s three. Also, the new SQE route is under 4k so all these numbers are way off.


Sceptical Tory (read my post a second time before you reply, thanks)

I said “Worst case scenario” – and there are four year law degrees.

The survey looked at graduates who graduated during a time when only the LPC was available. The cost of the SQE is neither here nor there.



good. middle earners made their choices. if they had worked harder they could have reached the £50,000 threshold.



The high paying jobs are quite limited and competitive


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