Final year student Amber Payne and her friends are struggling to cope with the cost-of-living crisis. Some are missing lectures to take on more part-time work. Others are skipping meals to save money.
“Maintenance loans are not rising in line with inflation and we can’t afford to live,” said the London student. “In some cases people have been forced to drop out because they have to take on extra work to support themselves. The lack of affordable housing means some students have been forced to live in hotels and many are skipping meals.”
Spiralling prices are the top concern of undergraduates living in London, according to a survey by insurer Endsleigh, and 40 per cent of young people face getting in even more debt just to survive.
The cost-of-living crisis has exacerbated the expensive business of going to university in England; £9,250 a year tuition fees are among the highest in the world, grants have been abolished and the maintenance loan system doesn’t even cover the basics.
At the same time as financial pressures on students grow, ministers say too many low-quality courses are leaving graduates languishing in badly paid jobs; serving drinks or packing shelves. Earning below the threshold for student loan repayments to kick in, they may never settle the balance on their taxpayer-funded loans.
Some pathways to a degree allow students to avoid the debt mountain. But the number of higher and degree apprenticeships – in which companies pay students to work and study – was just 37,800 in 2021-22. It barely makes a dent in the 300,000 or so young people in the UK who apply to university each year. And not all the 37,800 will be school leavers; some will be older and already in employment.
With quality alternatives hard to secure, it remains the case that university is a top destination for many 18 year olds and one that London families in particular wholeheartedly embrace.
People who are university educated tend to have the skills and the training to be successful
Young people in the capital from all backgrounds are more likely to go to university than their counterparts elsewhere. In 2020-21, the participation rate for Londoners up to the age of 25 was 59.3 per cent – 12.3 percentage points above the England average of 47 per cent.
Ambitious young people and their parents know that a degree is generally a prerequisite to certain high-status professions such as medicine and law.
It remains the case that a degree from a UK university, particularly a high-ranking one, brings clear benefits to the individual and to society at large.
“Prospective students appreciate the distinctive benefits a degree provides,” says Professor Nic Beech, the vice chancellor of Middlesex University. “In a poll of young Londoners recently, more than eight in 10 said they expected university study to help them secure a job and help them develop intellectually. We all exist in a global, highly competitive economy that is changing at an unprecedented pace and graduates need the skills to match.”
Many companies prefer to hire graduates. The employment rate for graduates in 2021 was 86.7 per cent, according to graduate labour market statistics. For non-graduates, it was 70.2 per cent.
Just over 65 per cent of graduates are in high-skilled employment, compared with less than a quarter of those without a degree. The median salary for graduates in 2022 was £36,000 – £10,000 more than non-graduates. Four out of five young people who left university recently and are in work or further study see their current activity as “meaningful”.
Numerous studies also show that graduates, even in an era when there are many more of them, continue to out-earn their non-graduate peers. Institute for Fiscal Studies research shows that the earnings premium is around £130,000 for men and £100,000 for women; in percentage terms, a gain in average net lifetime earnings of around 20 per cent. For degree courses related to high-salary professions, such as law, economics or medicine, the return is more than £250,000. Conversely, the lifetime returns for some courses, particularly the creative arts and languages, are much lower.
But while salary levels may be a main preoccupation for the Treasury, for many students going to university is not just, or even mainly, about getting that top job in the City. Barely half of 15,000 students polled in 2019 said getting on the career ladder was their main reason for doing a degree. The survey by the think tank the Higher Education Policy Institute (HEPI) found that students’ interest in the subject was a close second, at 48 per cent, followed by a desire to go on to high levels of study and to develop a range of skills as a person. It is these factors that help to fuel the enduring popularity of a university education, according to Nick Hillman, HEPI director. “The figures show that young people are rational; they recognise the benefits of university, both the financial gain and the satisfaction of doing what they enjoy and what that can mean for their well-being,” he says.
Professor Stephen Felmingham, pro-vice chancellor at Arts University Plymouth, makes a similar point. “Deciding to invest time and money in a university degree should absolutely improve your career prospects, but art, design and media are also integral to our happiness and well-being,” he says. “The creative industries make communities in all parts of the UK happier, healthier places for us to live in, and offer fulfilling careers with a chance to make a difference in the world.”
The range of what can be studied is also expanding. Alongside more traditional degrees, vocational courses and new technologies are on offer. Institutions are now being judged on how many graduates they get into professional careers, so students are getting more help than ever to get work experience and placements, internships and good jobs after graduation.
At De Montfort University in Leicester, just an hour from London by train, undergraduates are guaranteed a period of work experience. The idea of universities as remote “ivory towers” of academic study is out of date, argues its vice-chancellor, Professor Katie Normington.
“That image is so different from the reality,” she says. “The majority of our courses are vocational – from accountancy to nursing – and many are accredited by professional bodies.”
While advocating that young people make decisions at 18 that are right for them, Normington sees going to university as “playing the long game”.
“There is a lot of evidence that over the span of your life and career, those people who are university educated do tend to be proven to have the skills and the training to be successful. And there are other benefits that sit outside the job market ones; all the research into health and welfare shows that people who have degrees are likely to be healthier in their lives. Graduates also cite the social benefits – meeting their best friends at university or trying for the first time sports or hobbies that they then pursue for life.” One of the clearest indicators that university is the right path for the majority who go is a question in the HEPI survey that asks third years whether they would make the same choice again, given what they know now. Nearly 60 per cent said “yes” last year. The majority of those who responded with “no” would have chosen a different course, a different university or deferred for a year. Just 3 per cent said they wished they had got a job.
As a brand, UK universities enjoy world-class acclaim. Four institutions, two of them in London, feature in the global top 10. International students continue to shell out large sums to get a degree here, attracted by British higher education’s reputation for turning out graduates with the right knowledge, skills and attitudes to thrive.
