Is a UK University Degree Worth The Cost?

Having a degree can further your career and lead to a higher paid job, but for most UK undergraduates this comes at the price of a costly student loan.

Research published by the Office of National Statistics shows that 20% of recent university graduates will actually earn less than the average ‘A’-level student wage (£10 per hour) revealing that university graduates do not necessarily make more money.

A UK undergraduate degree currently costs £9,250 pounds a year. This leaves graduates from poorer backgrounds with an average student loan of over £57,000 according to the Institute of Fiscal Studies.

Studies show that bachelor’s graduates on average earn 34% more than high-school graduates. However, according to a recent Bank of England study, this ‘graduate wage premium’ has reduced by 11% over the last twenty years. The increased supply of graduate students without a corresponding increase in demand for jobs has lowered the ‘graduate wage premium’ even further.

Tom, a recently graduated Kings College Masters Student, says that he views his degree as “investing in myself” but thinks the full benefits will not be seen for “five to six years’ time” when he applies for promotions. Although he has received a First in his International Development MA, he is competing against people with “relevant experience that trumps a degree”. Higher qualifications are a requirement of many jobs but, with so much competition employees are putting more emphasis on work experience, which recent graduates find hard to gain.

Dr. Fiona Graham (admissions tutor and theatre lecturer at Goldsmiths University in London), states that a degree is essential for “developing skills” and will “increase chances of getting work in the future”. Dr. Graham’s concern, however, is that “student applications are decreasing while our targets are increasing” and she thinks that “as students and their families begin to realize the implications of debt they will start to make different choices”.

This is reflected in a 2017 Sutton Trust poll which found that 74% of people aged 11-16 in the UK are likely to go into higher education. Although this is almost three quarters of young people it is still the lowest outcome since 2009, suggesting that higher education may be losing its appeal.

For Harry Clarke, a second year Geography student at University of East Anglia (UEA), “student debt is bad but, at the end of the day, it works like a tax for graduates and you have the benefit of getting a higher paid job when you graduate”. Clarke acknowledges that in his parent’s day “it was easier to get into high-end jobs but now you need a degree”. The cost of university doesn’t seem to faze him as he believes his degree will “open doors and give more access to money” in the future.

Fellow UEA geography student Cheryl Duke, states that her degree is “an investment” that will cost “less than a phone bill each month” when she comes to pay it off. Duke argues that the loan “Is not that bad, to be fair. You don’t even notice it. It just comes straight out”.  She along with many of her peers say they will “never pay it back anyway” so it is not seen as real debt.

Graduates do not have to repay their loan until there annual income is £25,000 a year. This fact is widely quoted by students when questions about debt are brought up.  Dr Graham says that a lot of students graduating with art based degrees know that they are “not going to make that money” so they don’t view the debt as a problem. For a twenty year old £25,000 may seem like a large salary however, as inflation rises and additional expenses such as a family and mortgage are brought into the picture this income threshold may begin to seem a lot lower.

Cris Shore (Professor of Social Anthropology at the University of Auckland) is very concerned by the high levels of student debt globally. “The future of society is in the hands of the generation going through higher education now”, he says, yet the current system is producing a society “so indebted that students won’t be able to pay back their loans’. Moreover, student debt is  “undermining the idea of education for citizenship”. He claims that generation Z is facing “downward social mobility” and the UK is moving towards a “model of class inequality reminiscent of the 1920s”.

Professor Shore believes that universities have become too focused on “how much a degree is worth in monetary terms”. He argues that “The economy requires an educated work force” and current government policy is led by “short-term thinking which only plans for the next electorate cycle”. Professor Shore argues that higher education should not be viewed solely as a means to a higher paid job but rather as “something of value in itself” and as “an enriching experience that creates the critical thinkers that society needs”. A university degree can “equip you in a fast changing economy where we don’t know what the future jobs might be. It teaches people how to learn”.  However, he acknowledges that university might not be the right place for everyone and believes that “public money should be put into apprentice programs so that not everyone thinks they have to get a degree to get a job”.

This mentality is clear in the case of international development student, Ryan Swift, who started university in Cardiff only to discover that it wasn’t right for him. He says “I spent ages looking for jobs and apprenticeships but I didn’t find many ones I liked or I didn’t get the ones I did like”. Having not found any alternative form of education after a year of looking he began to “lose motivation” and put an application in at UEA because he “wasn’t ready to start working in just any job yet”.

Swift’s experience highlights the lack of opportunities available for young people outside of traditional higher education. The cost of gaining a degree has to be weighed against the jobs available to people without one.

Incomes for young people in their twenties are relatively even between university graduates and non-graduates. However, a degree appears to give you an upper hand as you get older which could be because degree-based jobs provide more opportunity for development and promotion.

With student fees and living costs rising it will be interesting to see if students continue to value a degree as worth the current cost.