The first students to pay £3,000 tuition fees have faced a lack of graduate jobs, more debt and, in many cases, significant spells of unemployment, a report has found.
It revealed that these students, who graduated in the midst of the economic crisis, found themselves dealing with a tough jobs market.
Higher numbers of graduates looking for work combined with harsh economic conditions led to more graduate unemployment and more graduates in lower skilled jobs, according to a report commissioned by the Higher Education Careers Service Unit.
One in 10 of this group has experienced "significant" periods of unemployment, and for some this could be continuing, it said.
Those from black or Asian backgrounds or with a lower degree classification were more likely to be affected.
The Futuretrack report tracked students who started university in autumn 2006, the year top-up fees of up to £3,000 were introduced. The latest report, based on surveys conducted between November and February, examined how they have fared in the labour market after graduating in 2009 or 2010.
The findings show that 18 or 30 months after graduating, depending on the length of their degree, two in five (40%) were in non-graduate jobs - roles in which they did not think their skills and knowledge were useful. In comparison, of those who graduated in 1999, one in four (26%) were in non-graduate jobs around 18 months after leaving university, the report said.
It found that students who started in 2006 and graduated in 2009 were likely to have an average debt of £16,000. Those who left in 1999 had average debts of £7,960, which is equivalent to £10,300 in 2009 when adjusted for inflation.
Of those who studied at English universities and left in 2009, almost half (44%) graduated with debts of £20,000 or more. Just one in six of those graduating in Scotland, where tuition fees were waived, had similar levels of debt, the report said.
It concluded that previous studies of graduates who left university in 1999 and 2004 "painted a rosy picture of the graduate labour market". Graduate unemployment was virtually non-existent and students tended to gain graduate jobs, it said. At the same time, tuition fees were low and the higher education sector was expanding rapidly.