Why your degree is all about the money

A whole new crop of soon-to-be undergraduates will spend this weekend either celebrating their exam success or working their way through the clearance system to find a place.

The day the results came out, Ucas announced that a total of 408,960 people already had a place on an undergraduate course in the UK.

Yet as well as the normal excitement over university plans and the debate over whether exams are getting easier, this year there has been extra scrutiny of whether degrees are worth the expense.

And that is for good reason – completing an undergraduate degree course in the UK now leaves the proud graduate with an average debt of more than £50,000.

Of course, that doesn’t have to be paid back immediately and many people will never repay it in full. It is simply deducted like a tax from their pay packets once they earn more than £25,725 a year – rising to £26,575 from April 2020.

And 30 years after graduation any outstanding amount is cancelled.

Yet just 44 per cent of graduates surveyed on behalf of the Association of Investment Companies felt their degree was good value for money. The high cost contributed to that – only 26 per cent of students and just 13 per cent of graduates thought they would repay their debt within 30 years.

If you measure the value of a degree based on how much the graduate earns then many courses are still worth it. The latest data from the Office for National Statistics shows that 88 per cent of graduates are employed compared to 72 per cent of non-graduates.

And graduates earn a median average wage of £34,000, compared with £24,000 for non-graduates.

But is that really the point?

More than money

A lot of employers look for more than a degree from graduate applicants. They want to see what else that person did with their time – and many universities offer a range of opportunities.

Catriona Scott is director of people at Explore Learning, hiring more than 250 graduates every year. She says university can help develop softer skills that are useful at every stage of your career: “University offers a real opportunity to develop skills like resilience, communication and empathy. When we interview graduates, we want to hear about the experiences they’ve had at university and how their transferable skills will support us with our business goals.

“Graduates always have a story to tell; whether that’s from a particularly challenging presentation, their dissertation project, or a charity programme they were involved in. Whilst there are more graduates out there than ever before, making the job market a lot more competitive, it’s important for graduates to appreciate these skills and showcase them to potential employers. A university degree offers a lot more than just the qualification.”

It’s perhaps too easy to judge the success of a degree based on the first and second jobs that graduates get but Andrew Wathey, vice-chancellor of Northumbria University, says a degree adds lifelong value.

“A university education is about giving people better choice for their future careers – that’s not just their first graduate job, it’s equipping them for their second, third and fourth career change.

“The nation needs a workforce that is adaptable and able to respond effectively to an ever-changing environment – and universities play a crucial part in delivering that. Let’s not forget there are jobs today that didn’t exist 10 years ago.”

Conversely, time spent on a degree means not spending that time in work and for some graduates that is a regret.

“I think if students had to think more about what they want to do and try other routes that are less expensive then they might have a better financial outcome,” says Julianne Ponan, chief executive of Creative Nature.

She admits having some regrets about the time she spent at university and that is only partly down to the cost. “Even though I went to university I feel that working or apprenticeships could be a much more viable route that gives you more life lessons,” she says.

“Even a gap year or working abroad teaches a lot more life lessons including how to budget, how to fend for yourself. My decision to go to university was based on the career that I wanted to follow later, however business took me on a different path and to be honest I wish I had started earlier in business.”

‘I wasn’t qualified’

Tom Bourlet now works as a marketing manager for Evanta and says it was only after he graduated that he realised his course had not been sufficiently up to date.

He says: “I realised I wasn’t qualified for the jobs I was applying for, even though I had studied marketing for years. I had learned about traditional marketing but the university struggled to train us on the new digital landscape, such as SEO, PPC and affiliates.”

Tom is not alone. Research from Campus Society, a social media network for students, recently found that 25 per cent of students felt their degree left them lacking in the technical skills they needed for their chosen career.

He was forced to study in the evenings to catch up on the areas he had not been taught. Despite that, he says it was worth it. “The experience of studying in Brighton, of meeting friends who I still see as the greatest in the world 10 years on, the laughs and the memories are easily the best of my life. I paid for the experience, not for the degree.

“I joined multiple societies, including drama and extreme sports, both of which I loved. We would finish studying and then head off kayaking in the sea.”

Tom’s experience may sound priceless but £50,000 is undeniably a lot to spend. Sophie Phillipson, founder of student and graduate support site HelloGrads, says the answer is to find the most valuable degree.

“While some do question the value of their course, most would agree the university experience is priceless,” she says. “A bit like the dress rehearsal for ‘real life’, living away at university is usually the first time many have left the family fold and must learn to be independent, negotiating rent, bills and budgeting.

“It’s the chance to make great friends and career connections for life, while building out your CV with all manner of extracurricular activities from sports to drama to student media to volunteering.

“But, with such high fees, questioning the value of your course and the quality of teaching before committing yourself is a really sensible idea.”

So go out, study and don’t be put off by student loans. Just make sure that the teaching, location and enjoyment will feel worth the expense, whether you measure that by earning potential or life lessons learnt.