For many years now, going to university and getting a degree appears to have been the preferred route for many learners but we seem to be at a turning point. Despite the greater government investment in Higher Education and the academic route, young people are starting to ask serious questions about the value of a degree. Will we start to see more people take an alternative route through their studies and into a career?
Young people wishing to enter Higher Education now face £9,000 annual fees (with some universities expected to be able to charge more in future). The majority of learners will have to cover these fees through a loan, and with maintenance included, a three year loan will mean borrowing over £40,000 (in some cases over £50,000). It gets worse for graduates; where student loans used to be fixed at the rate national rate of inflation (RPI); this is no longer the case. The current interest rate on a student loan is 3.9%, meaning graduates will need to earn around £45,000 before having any realistic chance of repaying. For the majority, it will mean a monthly deduction from their wages for 30 years of their working lives.
This year saw the first new graduates under this system, and at the time of writing, a petition has already reached the required number of signatures to consider this issue for a debate in parliament. The campaign was started by a graduate, who published his statement from the Student Loans Company, showing interest of £180 per month being added to his debts. The petition is supported by Martin Lewis, the man behind Money Saving Expert, and who was recently voted the most trusted person in Britain.
Last year, the Chartered Institute of Personnel Development (CIPD) released a report in which they found that more than half (58.8%) of graduates are in non-graduate jobs. It seems that a degree is no longer a ‘golden ticket’ to a great career.
Young people are becoming more aware of the problems of an oversaturated graduate job market and the huge debts and effective cut to their earnings for 30 years. This presents real opportunities to showcase professional and technical routes and apprenticeships, which can offer a superb way to enter a career and don't leave students with unsustainable debt. It is up to all of us to continue to improve our offer, so that young people looking for alternatives to university have confidence in taking a different path.
