Earlier this week I was talking with an American colleague of mine about the cost of university education in the U.S. and the astronomical debt students are left with post-graduation. It got me thinking about what real return a university degree offers and whether challenging the status quo might be the way forward for a bunch of struggling youths.
Now, UK university tuition may not be quite as exorbitant as it is across the Atlantic, but with the recent tripling of fees plus the bizarre government loan available — which seems to penalise middle income earners the most – it raises the question: Are these pricey pieces of paper worth the time and cost?
Where minds are carved (…sometimes)
University is a place where like-minded bright young things come to meet, where discussions are born, change is willed and discoveries are made. You can die your hair pink, wear weird clothes, read old (and tedious) philosophy books, experiment etc. etc. etc. You get the point. This is the idyllic picture the word ‘university’ draws in one’s mind (well at least in my mind).
I suppose, what actually occurs in reality depends on the individual. Perhaps you live that sweet ride of personal growth, or maybe you go to lectures sporadically, drink a lot of cider and stop fitting into your jeans. I’m not here to judge, if that’s personal growth to you – kudos. My point is, whatever experience you have at university it’s going to cost you a fair bit of £46 000. That’s just a standard 3 year degree. No masters, no experience and no job does it guarantee.
But, what’s the alternative?
Apprenticeships! Yes, they’re making a comeback and this time they’re not only for men working with some kind of heavy machinery. And they are popping up for every career choice from costume design to PR to Finance and even Law! This is particularly great news for those looking to enter into industries such as PR, which have a bad rep of making graduates work unpaid internships for yonks before deciding to actually give them a salary.
This way, instead of racking up student debt, you are paid (albeit not very much) while learning on the job. Plus you get a qualification at the end of it and that valuable work experience stuff that job positions are always expecting. With 94% of apprenticeships ending with another job, you do the math.
Let’s do the Math!
In a horribly simplified equation which does not take future value, tax or inflation into account (adding them would only help my case anyway) I show the worth of a degree and an apprenticeship.
The University Route
3 years of university fees plus living expenses: 3x£12 000 =£46 000 of debt
Say you are one of those lucky graduates who gets a job quickly earning an awesome £21 000, which means you don’t pay anything back, but start incurring an interest rate of 1.5%. In that year you accrue £690 of interest owed.
Sum of worth after 4 years = -£46 000 -£690 + £21 000 = -£25690
The Apprenticeship Route
Let’s say your apprenticeship is 2 years.
First year you earn around £5 000, second year £10 000. Say your job takes you on for the next 2 years at a fairly meagre £16 000 after finishing your qualification.
Sum of worth after 4 years = £5 000 + £10 000 + (£16 000 x 2) = £47 000
So it’s clear from my horrifically thought out equation that apprenticeships have a better sum of worth at least in the short term. However, recent data from the Office of National Statistics found that 27% of graduates are earning less than those who have just come out of an apprenticeship and wage becomes more reliant on experience rather than education as you head further down your career path.
What’s the catch?
Nothing is ever flawless and I think there are a few issues that need to be considered. It will be important to change perceptions regarding apprenticeships and the value that is attached to them, meet demand with quality supply and allow flexibility so that 16 & 17 year olds (who have no idea what they want to do) can use their learning as a platform to grow and shape their careers rather than being siloed.
I’m not slating university degrees by any means, they can be truly wonderful and incredibly valuable, especially if you study something you love. However, school leavers and our economy face very real problems that need some creative solutions. Financial worries, a sometimes depressing graduate job market and a skills shortage calls for a few more options to be added to the list.