Comment: Who really needs a university grant?

Friday 08 December 2017

Following the shock announcement in Budget 2018 that the States - might - be giving a big grant to support most Jersey uni students, it's fair to say that the value of a degree has been one of the top topics of the last few weeks.

Today, one of the regular Express columnists and local teacher, Rory Steel, gives his personal take on the value of going to university...

"It goes without saying that a university grant will significantly help reduce the increasing financial burden further education places on families, and provide an opportunity that would otherwise simply not exist for many.

My own parents never received a grant, so I’ve witnessed first-hand the sacrifices made to give my sister and I the best possible start in life.

But therein lies the real question: does university give you the same head-start it used to? If it doesn’t, is it worth it? And who really needs a university grant?

Pictured: Does university really set us on a better path in life? That's what Rory wants to know.

It’s well documented that going to university increases your earnings in the long-term - but statistics can be misleading, so let's look at them with a more cynical eye:

• median salary for young graduates, £24,000;

• median salary for young non-graduates, £18,000. (BIS, 2015)

A difference of £6,000, in black and white - no more discussion, university is an advantage.

Let’s pause, and have a quick think about that, though. What is it that students went to university to do? A good proportion may have completed, in one of their many forms, law, medicine, engineering, architecture, finance and teaching degrees. While the latter may currently be disputing their worth to the world, in financial terms, the majority mentioned have significant salaries attached. So wouldn’t you expect more than a £6,000 difference?

The counter-argument is usually, “junior doctors, lawyers and many others start with low wages, and end with significantly higher ones."

I agree, so let's look at the difference in salaries for all ages from the same survey:

• median salary for young graduates, £31,500 for all ages;

• median salary for young non-graduates, £22,000 for all ages.

Pictured: Rory checked out the average graduate salaries to find out if all that study time resulted in better earnings.

Given that there is a significant skew in the higher end of the graduate salaries, I would expect this value to be much greater than £9,500 over time.

Furthermore, if you look at this graduate average over the last decade it has barely even moved: only £500 in the last six years.

Degrees are not, by default, inflation or recession-beating; quite the opposite. A reason for this is possibly that an increasing number of graduates are working in non-graduate jobs. If this is the case, what was the point in exposing yourself to a lot of student debt?

37% of those who went to university regret it, given the amount of debt they have accrued. 49% said they could have got to where they are in life without the benefit of a degree. (Aviva, 2016)

Many students question why the fees are now so high given that they might only experience around 8 hours of formal lectures a week. Many of these lectures are given to large numbers of students, in a large lecture theatre, via a dry Powerpoint. It leads to the criticism I often hear from industry, “too many graduates don’t have basic presentation, language or interpersonal skills for a business setting." So, what are the alternatives?

Pictured: Jersey students don't have to just turn to UK universities to get qualified, Rory argues. There are plenty of programmes closer to home.

Many students are now taking BTEC courses - A Level equivalent vocational courses that focus more on practical application than theoretical understanding.

Last year a quarter of successful university applicants had at least one BTEC qualification. Employers are following universities’ acceptance of their value, enjoying the improved soft skills that BTEC assessments embrace. Apprenticeships are also increasing - employers are scaling up their apprenticeship programmes, with hiring expected to increase by 59% in 2017 (Association of Graduate Recruiters, 2017). There has been a shift in the practical, over the theoretical, I see it in Jersey. I hear it from local employers. It’s why we have “Skills Jersey."

Many students are also seeing the benefit of working their way up from the inside. Accumulating qualifications through work, while their friends are at university. I still have friends approaching 40, still working their way through the myriad of financial exams; many young people are coming to the conclusion they might as well get a three-year head-start on their peers, and go straight to work at 18, with no further education debts. One of my recent former students has just gone to London to become a marketing executive; he’s only 21, living with a good wage, no university debt, gaining a 'real world' portfolio when his friends are returning home, many with a significant debt.

Over the last five years, tuition fees have tripled, and in some cases exceed the £9,000 a year mark. The average UK student is graduating with up to £44,000 of debt (with maintenance loans), nearly double that of the 2012, £25,000 figure.

Pictured: Should students really be leaving university with £44,000 debt on average?

Using an online loan repayment calculator this could take an outrageous 24 years to pay back. While one argument for local students to go to university is the 'experience,' it’s worth considering you could travel the world during those three university years, with that £44,000 and probably 'experience' a great deal more.

“The financial hangover from university has led many in this age group to question whether in hindsight they made the right decision and how much value it has brought to their current position.” (Louise Colley, Aviva)

Full disclosure: I’ve been deliberately pessimistic to make a point.

I think university still gives graduates an advantage - it is still required for many professions, but it isn’t the instant advantage previously enjoyed. The benefits are being challenged by different pathways, such as BTECs and apprenticeships which don’t have anywhere near the same debt attributed to them.

A grant that takes away the vast majority of a graduate's debt, gives the degree back its advantage. It is still a very serious decision for everyone, especially as us 'overseas' students are charged more in fees.

A States grant WILL increase the options for many: opportunity should not be a socio-economic advantage. We tell students everyday to push the boundaries, aim high.

Pictured: Ultimately, a university education does provide better opportunities, according to Rory.

Greater local talent helps the economy, reduces our need to import skills at a higher cost. If students can prove, through GCSEs & A Levels/BTECs, that they have a chance, then no one should be denied the opportunity to become a lawyer, doctor, architect or, dare I say, teacher.

I hope the grant is a success - but university isn’t the only answer."