Luke Craddock is a resident doctor working in Nottinghamshire. In 2017 he borrowed roughly £77,000 from the Student Loans Company to fund his six-year medicine degree at the University of Nottingham.

Today — after more than two years of repayments from his salary — his debt stands at £106,000. He is 27.

Doctors and healthcare professionals like Craddock face the highest debt burdens of almost any profession, having been caught in a double bind by a broken student loan system.

Steve Taylor, a GP and spokesman for the Doctors Association UK, said: “Probably of all graduates, doctors are among the ones who are going to be able to clear their debts, but that means that £100,000 loan will become £200,000 that is actually paid off. That’s money they’ve lost over their entire careers, in addition to being paid less than my generation.

“I went to medical school and I had free education. I had a student grant. I came out of university with no debt and started a career that has done pretty well over 30 years. How have we allowed 4.5 million young people to be shouldered with this dreadful system?”

Medics have to complete lengthy and expensive degrees, forcing them to borrow more for longer. Yet even once they are earning respectable salaries and paying hundreds of pounds a month towards their debt, their loan balance continues growing because the interest they are charged outpaces their repayments.

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Experts say this debt burden is hampering productivity and aspiration in the NHS and represents a major problem for a health service that is desperate to hold on to its homegrown talent.

This month Rachel Reeves, the chancellor, defended the student loans system in England as “fair and reasonable” because money was needed “to be able to bring down NHS waiting lists”.

This was a kick in the teeth for Craddock. “It’s not the staff’s job to subsidise the health service with their training. If you are working as a doctor in the UK you are subsiding the system quite a bit already. You’re working so hard yet being penalised in so many different areas,” he said.

‘Why do an extra 13-hour shift if you are taxed at 51%?’

Craddock is on the Plan 2 student loan system, which covered those starting university between September 2012 and July 2023. They were the cohort who paid tuition fees of more than £9,000 (up from £3,000 for those students who started university the year before) and they are also charged punitive interest rates set at the retail prices index measure of inflation (RPI) plus up to 3 percentage points.

Craddock said: “When you’re 18 it’s not like you have another choice. If you want to do medicine and don’t have a family who can pay your fees upfront, then you’re going to have to take out a loan.”

The Plan 2 interest rates mean that someone with the average £53,000 debt on graduation has to earn about £66,000 before their repayments are greater than the interest being added. Plan 2 students repay 9 per cent of their salary above £28,470. This threshold will rise to £29,385 in April but will then be frozen at that level until 2030.

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But for doctors, whose degrees are longer and so have to borrow more, the amount they need to earn before their repayments are clearing the interest on their debt is much higher. One surgical registrar who is more than six years into his career, and asked not to be named, calculated that he would need earn £92,536 for his repayments to outrun the interest.

The surgeon, 31, borrowed £61,000 for his tuition and maintenance loans between 2012 and 2018. He said: “I came from an underperforming state school, where not many had the opportunity to go to medical school so getting the grades was something my family, my school and I were really proud of — you don’t think about the cost, you’re just so excited to have got in.”

Since graduating he has repaid £16,000 and is now paying about £400 a month. His debt has grown £32,000 to £93,000. “I’m more than happy to pay back the loan I took out, but the way the interest system is working is getting ridiculous,” he said.

His repayments also make a noticeable dent in his pay cheque. “It definitely affects many parts of my day-to-day life. I live in a house-share with other people who are in their thirties, which is not where I’d envisaged myself at this point of my life.

“In the longer term, I’m trying to save for a house, I want to have a family. But these things seem very, very far in the future.”

He said the student loan system had made him question taking on extra shifts and longer hours because his marginal tax rate (the rate he pays on the next £1 he earns) is 51 per cent — 40 per cent income tax, 2 per cent national insurance, and 9 per cent student loan.

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He said: “Often the extra shifts are 12, 13-hour days. You finish the shift exhausted then you look at the amount you get after the tax and it doesn’t really add anything to your monthly salary. I now value my time away from work more than making those couple of extra hundred pounds.”

Dr Callum Parr, the deputy chairman of the UK Resident Doctors Committee of the British Medical Association said: “Marginal deductions can take away half your earnings beyond certain thresholds, creating a cliff-edge effect where extra work is financially unviable. This risks undermining national efforts to bring down the waiting lists.”

Craddock said he had seen it the same thing among many of his colleagues. “It becomes a question of ‘do I pick up any additional work because whatever I pick up I’ll see 49 pence out of the pound?’ It’s a productivity nightmare, nobody wants to pick up extra work any more.”

The Times and Sunday Times End the Graduate Rip-Off campaign is calling for a radical overhaul of the student loan system, including removing the additional 3 percentage points interest added on to Plan 2 loans.

Taylor said: “The problem for many resident doctors is that they don’t become aware of the problem of marginal tax rates and additional costs until after they have taken out their loans. This is the problem of the whole system. It’s far from clear or fair. I have heard from some caught in this who have decided not to do additional shifts again as a result.”

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RPI used to be the government’s official measure of inflation but was replaced by the consumer price index (CPI) measure in 2013, when the Office for National Statistics said RPI did not meet international standards. It is no longer used as the benchmark for the increases to pensions or benefits and the government has said it will phase out its use by 2030.

Taylor said: “If it was kept at the same amount you borrowed in the beginning, in real terms, that would make sense. But the fact they’re using RPI, which is something they refuse to use for pay rises, and then adding 3 per cent on top of that, that’s just incredible.”

An exodus of nurses

Last week the Liberal Democrats called for nurses, teachers, and police offers to have a proportion of their debt written off after ten years of service.

This builds on a report last year by the Royal College of Nursing (RCN), a trade union. It found that a student loan forgiveness model could keep an extra 14,000 nurses in the NHS, which would fill more than half the vacancies in England.

The RCN said that if current trends continued, by the end of 2029 more than 11,000 nurses would have quit after spending less than a decade in the profession. Since 2021, when applications for nursing peaked, they have dropped more than 21 per cent. One in five registered nurses are due to retire in the next ten years.

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Nicola Ranger from the RCN said: “This broken tuition-fee model has been an unmitigated disaster for nursing and patients, exposing graduates to eye-watering debt and almost never-ending payments.

“It’s caused applications into the profession to plummet, just when we need highly skilled nurses more than ever. There is no route to transforming care or recruiting the brilliant nurses of the future that doesn’t include reforming this outdated model.”

The RCN suggested that nurses working in the NHS or other publicly funded health and care services could have 30 per cent of their loan written off after three years of service, 70 per cent after seven years and the full 100 per cent written off after ten years.

Nurses said that they would be willing to commit to seven to ten more years in roles that offered student loan forgiveness. The RCN findings, verified by the consultancy London Economics were that loan forgiveness for nurses “would provide a societal benefit of £1.162 billion per cohort, and 65,000 additional nurse-years worked in the NHS”.

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Taylor said: “It would be a really good way of keeping graduates from the UK working in the NHS, but also it’s a way of actually giving them a pay rise that isn’t coming straight out of the chancellor’s pocket.

“It could be an amazing way of incentivising work in the public sector and I’ve not quite understood why it hasn’t been part of the conversation. I suspect because it would create a contagion.”