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Is it worth going to university?

Going to university has always been a big decision. It demands time, discipline and an interest in the subject matter. However, as tuition fees and living costs continue to rise, it's no surprise that students are asking the question: is university really worth it?

We look at the costs associated with university, including changes to student finance and student loan repayments, plus the benefits. We also look at alternatives so that you can make an informed decision.

Student loans - what‘s changing?

The UK government has announced changes to student loan repayments. For students starting university from September 2023, the minimum amount they need to earn before they start repaying will reduce. This means that if you take out a student loan, you'll start repaying it earlier.

Therefore, someone earning the average UK annual salary of £32,000 would pay £207 more per year when the changes kick in. The amount of time until the student loan is written off (if not repaid) will also increase from 30 years to 40 years. So the loan has a longer lifespan.

How much will university cost?

The fact is, going to university is expensive. The average debt of a student that graduated in 2020 was £45,000.

However, the UK student loans system is designed so that upfront costs don't discourage potential students. Student loan repayments operate more like a tax. If you never earn the minimum salary to trigger repayment, you never start repaying the loan. If you start earning the minimum salary later in life, you'll only start repaying from that point.

The Government expects that only 25% of full-time undergraduates who take out loans before 2023 will repay them in full. Under the new scheme, the Government expects this figure to reach more than 50%. This is because students start repaying earlier and over a longer time period.

Earning potential - grad versus non-grad

You might be wondering what the earning potential is like for a graduate vs a non-graduate. The median salary for a graduate of working age (16 - 64) was £35,000 in 2020. By comparison, the median salary for a non-graduate of working age was £25,500.

The student loan changes mean that grads earning the median salary will be repaying higher student loan amounts.

University can be viewed as an investment with delayed returns. The Department for Education in its Equality Analysis of November 2021 stated that "higher education is a significant investment both in terms of time and money. While the costs of study, in the form of tuition fees and living expenses, are incurred up front, the benefits, in the form of higher lifetime earnings and improved health and well-being, do not materialise until later after the student has graduated."

For students planning to go to university, there are now some great options. For example, degree apprenticeships enable students to gain a university degree and earn money at the same time. The employer typically pays the tuition fees, so you graduate debt-free and have earned an income too.

Some sectors, such as medicine, law and architecture tend to require a university degree. In other sectors such as accounting & finance, business administration and I.T., degree apprenticeships are more commonplace.

It's worth visiting the UCAS website to understand the entry requirements for your chosen career.

From a purely financial point of view, degrees that lead to higher earning potential might be more worthwhile. However, this view does not consider other important factors such as the value of learning or the enjoyment factor of studying something that is interesting.

Other things to consider

Another important factor to consider is: you! Some students really enjoy the academic and social environment that university brings, whilst others do not. It's important to make a decision based on your individual circumstances - taking into account your own learning style, the subject matter and desired career.

The UK Government also announced in February 2022 that it is considering minimum grade requirements for students to be able to access student finance.

A new consultation will consider whether students without at least a GCSE pass in English and Maths or two E grade A-levels should access student loans. This has not concluded so it's not clear what this could mean for future undergraduates who need student finance.

The reputation of the university is also something to consider. A degree from one university isn't the equal to the same degree from another. The value of your degree also depends on the subject matter - some universities are stronger in certain subjects. Other factors, such as the culture and the employment rate for students after graduation, are also worth considering.

What you get from university that can't be paid for

There are valid reasons to explore alternatives to university. However, your time at university can be worth more than the degree certificate.

Here are three key benefits of the university experience, beyond the degree itself:

  1. The networking opportunities at university are still a big pull. You could be sitting next to someone who went to private school, or someone who grew up on the other side of the world. The ability to connect with different people and to learn a subject in a university environment is unique. The alumni networks also help graduates to keep in touch with people who studied at the university in the past. These networks also help you to plug into events run by the university, long after graduating.

  2. The opportunity to build life skills.

Many university students choose to live away from home. This can be a big shock to the system but it provides the opportunity to gain independence and prepare for the 'real world'. Learning to manage your money and time is all part of the university experience.

3. The wider learning potential. Being at university puts you in a great environment to meet thought leaders and learn from people who are experts in their field. Universities often host panel discussions and external talks, which help you to learn more broadly.

Diving straight into the world of work

You might have decided that university is definitely not for you. Maybe you love the practical elements of the subject but could do without the more theory-focused classroom setting.

Some university programmes involve sandwich courses that enable students to work in industry for 6-12 months and apply what they've learnt. However, this isn't always an option for every course.

A practical apprenticeship or junior position in industry might be a better starting point. Entry-level positions often allow you to work up the career ladder. As you'd be at the very start of your career, the salaries are unlikely to be sky high on day one.

Bear in mind that if you're jumping straight into work, you might be starting a step behind grads. A degree can often allow you to command a higher starting salary and move between industries more freely.

The self-made entrepreneur

Some people are budding entrepreneurs and the thought of setting up their own enterprise is super appealing.

For some entrepreneurs, the years spent at university could have been used to build a brand or business.

Be aware that setting up your own business takes huge levels of time, commitment, resilience and energy. It's definitely not an easy or quick-fire alternative to university. Many entrepreneurs invested a lot of time for sustained periods to make their businesses a success. However, the end result can be incredibly rewarding.

The half-way option

Degree apprenticeships may be well the best of both worlds. You get to study and gain on-the-job experience. You get paid, with the added bonus of no student debt.

Degree apprenticeships are highly competitive and not available for all industries. Take a look at the Apprenticeship website for important information.

So, what's the best option?

The answer is simple: it depends. Everyone's circumstances are different.

Whether university is right for you depends on your learning style, the course and the sector you're planning to enter. There's no right or wrong answer and there are many paths to career success.

The main thing is that you make a decision that works for you and enables you to do your best.


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