Feature: The Value of a University Degree
A report published recently by the Institute of Fiscal Studies suggested that in the future the pay gap between university graduates and non-graduates is going to decrease. So, is it worth going at all?
According to the report, there has been a significant increase in the number of students in recent years and, as a result, the value of a degree is shrinking as supply exceeds demand. However, the price of a degree is large and still growing. Tuition fees are verging on extortionate and prospective students now are faced with a burden of debt that will stay with them for decades.
Tuition fees haven’t been around forever, though. We only have to go back twenty years or so to the 90s where students had a much cheaper experience. University was free for all – you just had to have the grades to get in. Head back a little further to the 80s and eligible students were being paid to go.
So, what changed?
In 1998, New Labour came into power and introduced the initial fee of £1000 per year per student in order to cover tuition expenses. A big change at the time but, by today’s standards, just a drop in the pond. Fast-forward 22 years to 2010 and fees were raised to a staggering £9,000 per year for some courses. The price of university education has skyrocketed but the product hasn’t changed.
What exactly are students paying for?
The oft-quoted and standard line used to justify higher tuition fees is that graduates are likely to earn more than non-graduates. And, for the most part, this is valid. Since tuition fees were first introduced, the wage difference between graduates and non-graduates has been around 35%. This figure has largely remained unchanged even in the period since the 2008 financial crash.
This gap may start narrowing soon, however. The IFS suggest that the combination of more people going to university and a relatively stagnant economy (which may be entering another recession soon) could result in the devaluing of university degrees.
Is it worth it?
This is the tricky part because, largely, it comes down to a personal decision. Now more than ever, prospective students should be considering their own circumstances to inform their decision, such as your career goals and financial situation. Indeed, the belief that young people should go to university as a sort of ‘rite of passage’ has become dated in the face of such a financial commitment.
More widely, attitudes towards the university education is shifting, too, as employers become more open to the other types of experience like apprenticeships or internships. Many companies now are changing role requirements so that university degrees are not a prerequisite (Penguin, PwC, Ernst & Young) and some, like Accenture, are even introducing schemes for school leavers as an alternative to university.
If nothing else, things are definitely changing. As a team who work with individuals at every career stage, already we have noticed shifts occurring in our entry-level candidates across both their types of experience as well as their expectations. As a result, many job roles are transforming and, as we enter 2017, we expect that these changes will become increasingly commonplace as employers begin to react.