Is a degree worth £53,000?
I have a dilemma. I’m not sure whether, or not, to advise my sixteen-year-old son to go to university. Throughout his school life I portrayed university as a goal to work towards. However, since the tuition fees proposals, it is no longer an admirable aspiration, but instead becomes the most important financial decision of his life.
If the tuition fees are trebled, it is estimated that, on average, students will leave university with debts of about £53,000. I don’t believe sixteen and seventeen year-olds fully understand the repercussions of debt, so shouldn’t we be warning them of what lies in store? Certainly when I was younger my barclaycard debt of a grand seemed like a huge burden that I would never shift.
Our most recent conversation on the subject went like this:
“Son, it would be really good for you to go to university.”
“Yeah, I’m looking forward to it.”
“But £53,000 is a lot of money.”
“Hmm, perhaps I shouldn’t go then.”
I’m not sure how to continue the conversation after this point. Any suggestions?
Comments
Subscribe
Visitor counter
Blog Roll Centre
Blog Hints
20 Comments
It is quite rediculous the size of debt students are being expected to accept. I would say it completely outweighs any financial advantage (the majority of) students would gain from their degree quallifications. So the only consideration is the 'added value' that four years in a university environment and in an accademic discipline can bring to a young person's life. Much as it has going for it - and you really can't put a monetary value on the positive nature of it - I think the negativity surrounding being in debt to the tune of £53,000 at the end of it (before even thinking about trying to buy a house) pretty well rules out the advantages.
I'm just glad my three 'children' are already past that stage and it will be eight years before our eldest grandchild has to decide, but if I had to give advice now, it would be to look for a job that allowed day-release, or block release, to gain quallifications, while learning on the job and earning some money to boot.
When I was applying for uni, my main motivation was to continue my education. I think the notion of being in debt made me concentrate on picking a course I really wanted to do, in a place I really wanted to go to. Fortunately, I had a fantastic time at York, but Tony's right, you can't really give that a financial value and it's a shame that people are put off simply because of the worry of debt.
I never have used my degree as a door opener but his choices will be far greater and he will be much more ready for them after Uni.
Steal the dosh and send him.
Failing that, can he weld?
But to get back to your question, the conversation I'd have would depend on my child's chosen field of study, their attitude towards money, whether I was convinced they could stick with it even if it gets hard, career options and their desired outcome. I see no point in getting into 50K debts for a job that pays peanuts afterwards, because even if you don't have to pay until you earn over the threshold the loan doesn't just magically disappear. As soon as you earn enough you start to pay and judging from current student loans, the interest charged often means the graduate pays off barely any capital.
So, I strongly agree with Tony. I read an article recently about apprenticeships in the financial sector which could lead to a degree but come with a very useful qualification and on-the-job training. I'd probably try to find an apprenticeship in my child's chosen field, then go for the degree course afterwards (as insurance in case the kid drops out without finishing, at least they'll have something to fall back on plus this will allow them to find out what working in that field is like).
If you have a very reliable child who knows exactly what they want and you feel satisfied that this is based on aptitude, attitude and grounded in reality then, yes, it might be worth paying the fees. I wouldn't necessarily go for the student loan system though, as the government is still discussing plans to penalize graduates who try to pay down their student debt as fast as possible - which is exactly what I'd recommend to my child.
Based on recent family experience I would not be keen on my kids working while studying as I have seen the effect this can have, not on social life or the stress levels of the student, but on the results achieved in the degree course. With that I don't mean holiday or weekend work but the kind of almost full-time study coupled with almost full-time working that most of my niece and her friends are doing - and this just because of living costs, travel expenses and the money needed for course materials - I dread to imagine what this might be like with fees added to the mix. I do know though, that she would not have studied if she'd had to take out a loan to pay fees.
What is your son interested in, Ron?
My daughter started her A-Level courses this week. With 12 A passes at GCSE, half at A*, you'd think she should be looking forward to life. Instead we have the crazy position of a bright 16 year-old frightened by the amount of debt she'll build up if she goes to university.
Shame on these millionnaire politicians. Shame on all of them.
Indications from her exam results show she has a good chance to succeed at Uni.
Will her net worth be enhanced enough by the uni experience to achieve more than if she enters the work place now?
The perfect life lesson to start with. No free lunches in life.
Best of luck.
I don't quite understand the fees. If you don't have to pay interest, the capital will decrease over the years and, like German reparations after the first world war, the debt will become insignificant. Mind you, the Germans had the Great Depression. i raised this at work and was told that the loan does increase.
I very much regret having mucked up my education. If you look at my writing, you can see that a lot of it is research based and of an academic nature. At work, apart from bring considered one of natur';s failures, colleagues think I should have had a job in the academic world, as that is where my interests lie.
Is your son too young to make decisions about what career he might like? Considering education abroad is certainly an option and it is a myth that English education is the best in the world. This is not true
Kinda makes me think about my own education (And debts).
To the best of my knowledge, My debt current stands around the $35,000 NZ dollar mark. (It should be noted that NZ dollars are a lot less valuable then pounds, or at least were last time I checked.)
I'm currently about to finish my honours degree, and afterwards... Ummmm... errr... crap. Should have perhaps done a little more planning.
No wait- stuff that- There is no way I would have done anything else, I love learning things, and I've meet friends who I will know for the rest of my life.
From what you guys have all described things in England are even more difficult. (Here is pretty good, there are scholarships, and the job market isn't too dire.)
I do a lot of tutoring, and talk a lot to the lecturers... and I guess there are several people who I do wonder if they should be there. Or if they should be in the courses they are in.
University is an amazing experience, and I am so glad I came.
But I have no idea what I'll do next.
I have always been lucky. I have never planned my life and so far it has always worked out. I can only hope my luck holds.
Athelstone, I share your frustration and you’re right that the culture of debt has steadily grown since grants were abolished. But the trebling of fees seems like a very big jump. In 1986, I received a £3,000p.a. grant, and the thought of paying tuition fees seemed ludicrous. I wonder if today’s students realize how much better things used to be?
Charlie, thanks for your comments. His situation is probably similar to many others just starting their sixth form - he did well at GCSEs, but doesn’t have a clear idea of what he would like to do for the rest of his life. He’s chosen Maths, Physics, Drama and PE at A-level: Maths and Physics because they are more reliable routes towards a well-paid job, and Drama and PE because he really enjoys them.
OFP, I’m wary of stealing the necessary funds, but I do wonder if debt problems will sometimes lead to desperate measures (i.e. more students volunteering for drug trials or selling their kidneys). He can’t weld, at present, although I’m sure he’d like to have a go. But don’t you need a degree in welding to do that now?
PaD, I can see that it would cause you to focus more seriously on what degree you want to do because, realistically, you only get one chance at university.
BF, your laid back attitude probably helps you cope, yes? Plus the fact that others are in the same boat, and many will be even more burdened by debt in the future. But you're right to point out, as OFP did, that the experience as a whole needs to be included within the equation.
Mike, I have been wondering if he could do it in another country (and kill two birds with one stone [joke]). I gather that Scotland and Wales will be penalising students from England (I’m not sure whether Northern Ireland are also following suit, though). Your suggestion of Maastricht sounds like an excellent suggestion, and I would like to know if there are other english-speaking universities that could provide a cheaper alternative.
After the recent A-level results were announced, various teachers and headmasters were interviewed and all were recommending that their students try for university. To offer this advice, without serious words of caution, is almost irresponsible, isn’t it?
And of course, there is still hope that the government will do a u-turn, or that civil unrest will force another election. But I’m not holding my breath.
From my pov I would definitely encourage any young person to go to uni if they have the opportunity, but can see how the cost has to be taken in to account! Also, a lot depends on what he wants to do and what his future aspirations are. Lack of qualifications can hold you back in life, and apprenticeships tend to concentrate on a particular career choice, so deciding on a career is important to the decision he makes.
I didn’t go to university, but my brother did. I earn approximately £20,000 a year (if not more) than my brother who is a Dr of Chemical Engineering, and he has just used his A Level quals to retrain so he can teach abroad as he has wanted to do this for a number of years. Doors are harder to open, but not impossible to open, without qualifications.
It disgusts me that our young people have to pay for their education, but long term, I think that in the main, the better the quals, the better the job and education will opens more opportunities too. The cost of achieving that may reflect in salary at some point?
I hope your son does well in whatever choice he makes. My son decided on an apprenticeship and has done very well, but he knew from a young age that he wanted to be a car mechanic, so that helped with his decision.
Good luck with it all.
This is no help to those facing the dilemma right now of course. Chez moi we’ve made our decisions on a somewhat lower amount, but still a lot of money in my view.
I should declare an interest, or two.
I received a University education at a time when relatively few people did. I had the benefit of all tuition fees being paid and a full grant for accommodation and living expenses based on the fact that my family was not wealthy. I was able to get summer jobs and graduated with no debts whatsoever. I even had a bit of money in the bank.
My daughter has very neatly got in just under the wire and her tuition fees are at the lower level. Phew.
So, my point:
I think that although the quality and value of a university education has been diluted by idiot government education policies it still offers much more than a path to a job. Warning, I am about to use the C word. I grew up in a very much working class environment on a vast council estate serviced by schools that were at the bottom of the tree. The extent of my family’s aspiration for me was that I would become an apprentice toolmaker, my father was a toolmaker in those days. The pass rate at eleven plus exam, the hurdle for the grammar school, from my junior school was zero. At some point I heard about the DoE (yesterday I mentioned that my daughter and her friends had just attained their DoE silver awards). I was told in no uncertain terms by my mother that it wasn’t for people like us.
But I had a remarkable stroke of good fortune. The gods of genetics or whatever had blessed me with a brain and I was noticed in what used to be called the third year (age 13/14) by a young teacher at the comp in his first year on the job. There was one other lad and a girl and they gave us a chance. I managed to get the A levels I needed and despite speaking in a dialect that was almost a foreign language got through interviews and went to Manchester University. The other two also succeeded.
While I was there I did OK academically. It was a bit of a shock to realise I wasn’t the smartest kid on the block any longer. I was surrounded by people many of whom were smarter than me, many of whom had a much more privileged upbringing than I had. But they became friends, some lifelong. And here is the point. It was bloody hard work in a serious subject and yes, I gained a degree and it got me my first job. But more important the whole experience gave me confidence. It showed me that I there was nothing that the likes of me couldn’t aim for. That I could try for the same things the public school boys were trying for. That has stood me in good stead over my life even if I have come a cropper once or twice (we all do that, don’t we).
There are two conclusions I draw from this. The first is that in order to attain equal opportunity it is necessary to make it possible for people without a lot of money to go to university. I was not the only one in my year from my kind of background, I was not an anomaly. I was one beneficiary of a good system among many others. The second is that in order to do this fairly the numbers must be managed to a level that as a nation we can afford. I justify this because it is an investment in our future as a nation. The numbers should be managed by an academic threshold, not a financial one and the equalisation of opportunity should come from improvements in the education system before University. This is no criticism of school teachers, who I know do their level best; it is a criticism of the politically manipulated environment in which they have to operate.
This is no help in the current situation for Ron or the many families facing similar choices but it is an expression of hope that the sense of this will one day be seen. Good luck Ron.
But it's hard-core Victorianism, really, isn't it: it's up to everyone to hack their own way out of their circumstances into education, and if anyone is by reason of background not well placed to do that... well, it's their own fault, isn't it - they just must not be trying hard enough. They don't deserve it, in other words... It makes me so angry!
I see that some universities are suggesting offering places to poor students at reduced fees if they work for the university as well. A fine idea, in the honorable ;) old tradition of poor men going to Cambridge and Oxford as the servants of rich men. Blimey - that's not Victorian, that's positively Elizabethan! They'll be offering scholarships to hunt servants of the beagle pack next...
But seriously, it's such a difficult call - my two children are one each side of the huge hike in fees, and it seems very unfair that my daughter will have three times the debt that my son is accruing, just because she's three years younger; I've warned them that the only difference I'll make between them, in any money I can spare for them in the future, will be to even out that unfairness...
I'm a little doubtful that the £53k is inevitable, though. Or is that a headline-grabbing maximum? How about an earning gap-year first? Gap years are a good thing anyway in many ways (tho' I know they have their downside), in that the children do some growing-up before they get to uni and are more mature and better placed to make the most of it when they do. And when they're up - yes, you don't want them failing their exams because they've been waitering all night, but it's not all or nothing. There are vacations, bits of jobs, etc. etc. which can't erase the debt they're accruing, but can keep it in proportion.
I'd also suggest that though a big chunk of debt is no fun whatever its origin, it's not quite like a credit card debt. Nor is it the kind of debt I was brought up to think of as Mortgaging The Future and possibly a sign of moral weakness that you'd spent what you hadn't earned... and all in all A Bad Thing. Student loan debt is a darned sight cheaper, for one thing. And as far as I can see among people who graduated with student loans (I'm older than that, too) it's more like paying tax. No sign of moral weakness - even a sign of good sense to have invested in your education and yourself. Just a fact of financial life, in other words. Like paying bank interest on the loan to set up a business. Just realistic.
One other thought. My degree was Drama, which in principle has "failed" me as a degree (though not perhaps by my deplorably old-fashioned idea that university is for educating the mind and the person, not for training workers) because I never worked in the theatre or any allied trade. But I use what I learnt on that course every day of my professional life, AND every day of my non-working life. It's very hard to put a price on that, but if you said to me now that (as it were) my mortgage was £50k larger because I'd spent money on that degree, I'd unequivocally say that it's worth every penny.
http://www.economist.com/node/21528433
If your son doesn't know what he wants to do, at least encourage him to put himself in credit rather than debt. Debt is a terrible con. If he's big on education, get him a library card and tell him to start a small company selling anything and try making a living. What an education that would be. No crippling debt for lots of good lessons.
Eli
I used to think that if a child is bright enough then they should be encouraged to go to university, in much the same way Alan has described, because it would be good for them and for our society. Consequently, I share Emma’s annoyance at the shift towards a system that favours wealthy students over those with academic ability.
So Eli’s suggestion becomes tempting: postpone a decision on university until he has a clearer idea. And if he doesn’t have a clear idea by the end of his A-levels then try to get a job, and start saving some money, until he does have a clear idea.
Thanks for all the words of wisdom. I’m now in a much better position to continue our conversation on the subject.
My husband and I took two different routes into uni education. I went straight from school and had to use student loans, a part-time job during term-time and full-time jobs during the holidays to support myself. Luckily I was there when grants still existed and I also didn't have tuition fees to pay so I came away with a very modest debt of about £6000 including a student overdraft. I then added another £4000 to this debt when I did my teacher training a year after graduating because by then there were no grants, just a loan and a means-tested loan. So £10,000 debt altogether. Nothing compared to today's figures but it still felt like quite a lot while I was paying it back! Having said that, I never once regretted going to uni and still think I would go now even with the prospect of a much increased debt.
My husband left school at 16. Didn't even bother staying for A-levels because that route didn't suit him. He managed to get an apprenticeship with a local engineering firm which involved one or two days at college a week doing HNC/HND and the rest of the time learning on the job. His education at the college was paid for by the company and he also earned a modest salary for his work there. He stayed with them for 5 years until he reached a stage where it became obvious that if he wanted to go along the route of design engineer, he would need a degree. So he then went to uni, at the age of 21. Having worked for 5 years (while still living at home with his parents), he had considerable savings. He was eligible for grants but required no loans. Every holidays, his company would take him back on, thereby helping to pay for his next year at uni. He graduated with no debts at all, in fact, he still had some savings left over.
I think there is a lot to be said for going into employment from school if there are training prospects and the possibility of uni education later on if required because it allows you to save up money for uni and it gives you on the job experience to apply to your uni learning which, according to my husband, was invaluable. I think the problem today, though, is that fewer and fewer companies are offering such apprenticeships.
I hope you manage between you to figure out what is best for your son.
Thank God I'll no longer be around when they re-introduce the feudal system....
Click here to sign up now.