For decades now, university has been the go-to option for the UK's brightest students, however with changes to student loans and other financial factors coming into play, is university still a good investment?
Yesterday was an incredibly important day for many young people. The day they picked up their results and found out where they’ll be heading to university next month.
Ignoring a slight dip in 2009, the number of UK university students has been continually increasing for the past 30 years. For many going to university is the go-to option, with some even choosing to go simply for the ‘uni experience’. However, with the rising cost of university loans and the cost-of-living crisis hitting students especially hard, should going to university still be the automatic post A-level choice?
How has the price of university changed?
Going to university has always been an important financial choice. However, this decision became increasingly more expensive when university fees were raised from £3000 to £9000 in 2010. Currently the average student in the UK finishes university £45,000 in debt. This can seem like an eye watering figure, but the argument goes that this is a worthwhile investment in your future.
For students starting university next month, however, the reality of university as a financial investment has shifted slightly. From September 2023, students will be categorised under ‘Repayment Plan 5’ which will not only increase the duration of their loan from 30 to 40 years but also lower their repayment threshold. In actual terms, experts like Martin Lewis argue that this means the average student will pay 50% more for university. It also comes as no surprise that this change will place a bigger burden on students from lower socio-economic backgrounds.
Now that students going to university will be faced with the reality of paying back more than their predecessors, the value of a university degree has again been called into question. In a recent article, the BBC points out that while university graduates will still earn more in their lifetime than those who did not go to university, the amount has reduced over time. It can also vary depending on the subject studied and university attended. The IFS found that on average, women in England studying creative or language degrees earned the same amount in their lifetime as those who had not gone to university. Meanwhile, for women studying law, economics or medicine their earnings on average increased by £250,000 over their lifetime. The value of a university degree must also be reconsidered when taking into account the low number of contact hours for students in the creative or humanities fields (typically 8-9 hours a week). The quality and amount of teaching further diminished with remote learning during Covid and recent strikes by university lecturers.
Nevertheless, when deciding to go to university, many students are not driven purely by the financial benefits. Some young people choose to go to university due to a genuine thirst for knowledge, others may want to experience the ‘uni lifestyle’. Often, university is the first-time students live away from home and learn valuable life skills, such as cooking, cleaning and managing their own finances.
Regardless of the motivation, university remains the ultimate post A-level goal for many young people. Alice B, a MyPocketSkill music coach, chose to pursue ‘the opportunity of a lifetime’, by completing a degree at a drama school abroad. Despite struggling to finance her studies abroad she was determined not to let this opportunity pass her by. Alice used her earnings from coaching drama and singing on MyPocketSkill to help put herself financially through university.
“I’m not really sure how I would have made it through university financially without discovering MyPocketSkill. There were moments when I wasn’t sure how I would pay my rent or be able to buy enough food as I wasn’t eligible for a student loan or maintenance loan. I got through those moments because I had my earnings from teaching to fall back on.”
What are the alternatives?
A quick look at the numbers above shows that going to university is now a bigger financial risk than ever before. With students due to repay more of their student loan than before, selecting the right course and university has become even more important, as the value of certain degrees drastically diminishes.
For some this might mean considering routes outside of the typical A-level to university path. Traditional options for this include apprenticeships, however, new T-level qualifications also offer an alternative route into employment. T-levels are a particularly great option for students who aren’t certain about committing to either route. They are technical qualifications which give students the practical know-how to enter into skilled employment or follow on with higher education (1 T-level is the equivalent of 3 A-levels).
The mounting impact of the cost-of-living crisis will mean more students will be looking for ways to keep themselves financially afloat throughout university and after. For prospective students looking in, the financial costs of university are becoming higher than ever. Further education is still an incredibly meanwhile investment for many, however the growing financial pressure on students might just lead increasing numbers to question the value of this quintessential A-level to university pipeline.
Pati Piotrowska is the Youth Policy and Impact Analyst at MyPocketSkill. She holds an MSc in Gender, Peace and Security from the London School of Economics.