Starting Out · 6-country comparison

Graduate Salary & Student Debt: 6-Country Comparison (2026)

Two numbers shape a graduate's first decade of money: what you earn, and what you owe. Both vary enormously between countries — and the way student debt works matters even more than the headline balance. Here's how starting pay and student debt compare across the US, UK, Canada, Australia, Ireland and Switzerland.

Starting pay & student debt at a glance

The big divide: loan vs graduate tax

Countries fall into three camps, and which one you're in changes the right strategy:

• Conventional debt (US) — interest accrues, you're expected to repay, and overpaying high-rate balances genuinely helps. Avalanche the highest rate; protect access to federal forgiveness (PSLF/IDR) before refinancing.
• Income-contingent "graduate tax" (UK, Australia) — you repay a percentage of income above a threshold, the balance is written off after a set period (UK) or only indexed not charged interest (Australia HECS-HELP), and many never repay in full. Overpaying usually doesn't pay — your spare money is better in a pension or first-home savings.
• Little or no debt (Ireland, Switzerland; Canada in between) — free or very low tuition means graduates start clear, so the first-decade focus shifts straight to saving and investing. Canada sits between: real balances, but the federal portion is now interest-free.

The ratio that matters

Comparing debt figures across countries tells you very little on its own. What matters is debt relative to the graduate salary that has to service it, and whether repayment is income-contingent or contractual.

That second distinction does more work than the size of the balance. A large income-contingent debt that is written off after a set period behaves nothing like a smaller commercial loan with a fixed monthly payment, however similar the numbers look.

Income-contingent versus contractual

• UK, Australia and Ireland (where loans exist at all) repay through the tax system as a percentage of income above a threshold. Below it you pay nothing, and there is no default in the ordinary sense. UK Plan 2 starts at £29,385 and Plan 5 at £25,000; Australia's HECS-HELP threshold is $69,528 for 2026-27, charged marginally at 15% and then 17%.
• The United States is fundamentally contractual. The standard plan is a fixed ten-year amortising payment, and missing it damages your credit and can lead to wage garnishment. Income-driven plans exist but must be applied for and recertified.
• Canada sits between the two: fixed repayment with a Repayment Assistance Plan available on application.

Indexation is where the real cost sits

Australia's HECS balance carries no interest but is indexed annually — and since the 2024 reform, indexation is capped at the lower of CPI or the Wage Price Index, which meaningfully reduced the real cost of holding a debt for years. UK loans accrue interest linked to RPI plus a margin that varies with income. US federal undergraduate loans carry a fixed rate set annually, 6.52% for 2026-27.

A fixed 6.5% compounding on a US balance and a wage-indexed Australian balance are not the same instrument, and a side-by-side comparison of the principal conceals that entirely.

Write-off changes the whole calculation

UK loans are cancelled after a set period — 30 years on Plan 2, 40 on Plan 5. A graduate who will never clear the balance within that window is, in effect, paying a fixed percentage surcharge on income for a fixed number of years, and the size of the balance is irrelevant to them. Overpaying in that situation simply hands over money that would have been written off.

In the US, forgiveness is programme-specific and conditional, so the balance matters throughout.

What to do with this

1. Work out whether you will realistically clear the balance before any write-off. If not, treat the repayment as a tax and stop optimising it.
2. Never voluntarily repay an income-contingent loan ahead of a mortgage or pension unless you are close to clearing it — the compulsory repayment does reduce borrowing capacity, which is the one genuine reason to.
3. In a contractual system, the rate is what matters. Refinancing federal US loans privately lowers the rate but permanently forfeits income-driven plans and forgiveness, which is rarely worth it early in a career.

For the full early-career playbook — emergency fund, debt strategy and the accounts to use — see the Starting Out guide, localised for all six countries.

↪ Part of our 6-country cost comparisons — see how every big financial decision compares across these six markets.

Changing direction later carries its own arithmetic — the financial ROI of a career change, where forgone earnings dominate.

Frequently asked questions

Which country pays graduates the most?
In local-currency terms Switzerland has the highest typical early-career pay (median gross around CHF 81,000), followed by Australia and the US. The UK and Ireland sit lower in nominal terms. Figures are in local currency and not exchange-rate or cost-of-living adjusted.

Which country has the worst student debt?
The US and UK carry the largest student balances — roughly $29,000 and £45,000 respectively at graduation. But UK loans are income-contingent and written off after 30–40 years, so they behave very differently from US debt. Ireland and Switzerland have little or no student debt because tuition is free or very low.

Is a UK student loan really like a normal debt?
No. A UK student loan is repaid as 9% of income above a threshold, charges interest but is written off after 30–40 years, and many graduates never repay it in full. It behaves more like a graduate tax than a conventional loan — which is why overpaying it rarely makes sense.

Sources

• US — BLS; Federal Reserve (student debt)
• UK — ONS ASHE; Student Loans Company; gov.uk (Plan 2/5)
• Canada — Statistics Canada; National Student Loans Service Centre
• Australia — GradStats; ATO (HECS-HELP)
• Ireland — gradireland / HEA; Citizens Information (free fees / Student Contribution)
• Switzerland — Federal Statistical Office; swissuniversities (tuition)

Figures as of June 2026 (2024–25 data), in local currency and not exchange-rate adjusted. Compiled from the latest publicly available official sources; general information, not individually verified or personalised advice. See our disclaimer.