Some universities will go bust thread 2

[GinForBreakfast]

Continuing as thread 1 has filled up.

Yes I agree that the decision making then has to be made sooner. And ime a lot of young people are scared to make mistakes/ fail. Parents add to this pressure too. I see two types of parents - those that push uni and those that say it’s too expensive.

@Pinkfluffypencilcase I think you are right about parents worrying about costs. I don’t like that leading to very bright dc taking second best routes.

@TizerorFizz @Pinkfluffypencilcase
I am a parent that is both worried about the costs of university and also about the worth of a degree now that so many people have one. I am also worried that my DC could leave university with £50,000 of debt and find it difficult to get a job afterwards or only get a job he could have got without a degree.
I would like my DC to have the university experience but I am not sure it is worth the price tag.
I understand that universities are in trouble but I also think young people are being left with large amounts of debt that will make it harder for them to buy a house etc.

Ideally parents need to be in the middle, not pushing university if it’s not what their dc wants or it’s not the best option for them. But also not putting pressure on them not to go because of finances. The last thing I’d want is for my dc to blame me for anything ten years down the line and I can imagine if they felt they’d been pressured one way or another this could happen.

@Runemum I am not sure you understand about the value of some degrees and how grads pay for their loans.

The IFS did research a few years ago that shows RG university grads had an earnings premium. It’s also subject dependent. Therefore the key to getting a good job starts with choice of university (not just RG by the way) and very much what DC study. Therefore if a bright DC has the option to do Law at Durham they should take it. Law at the Uni of Blog down the road, not so much. This applies to nearly every academic course. They looked at earnings differences between LSE economics grads and economics grads from much lower ranked universities: it was stark. So choice of university and course matters. Aim as high as possible. Plus hone personal attributes and get work experience. Often overlooked by students. We still have a pretty big earnings premium on many university subjects taken at the better universities.

Also the loans are not a debt. There is no requirement to pay it off. No wotk then not 1p paid ever. There is no doubt that higher earners are better off with the current loan system than lower earners who don’t progress in their careers. Lower earners pay for longer. However some jobs will require the degree so everyone is the same in terms of loans. Apprenticeships will help some people but those not in cities might struggle to find what they need.

Your feelings do add into my views that there are too many degrees that are not providing what students and employers need and exist for the needs of the uni, not the student. Also some students don’t understand what they need to get a job. I would prefer to see work/study models used far more widely. The Polys worked with employers like this pre 1992, but many below degree courses became degrees for full time students after that date, and it’s forced lower qualified dc into full time degrees. I think this should be reversed. Getting a job that’s not an apprenticeship, but has day release to a Poly (now a uni) has largely disappeared which is a great shame.

@TizerorFizz
I agree with you that the type of degree you get and from where matters.
My concern is that an Economics degree from say Birmingham as opposed to LSE might make it harder to get a job and a computer science degree from say Loughborough versus Imperial might make it harder to get a job even though Birmingham and Loughborough are still good universities. It is much more costly to send a student to a London university and I am not sure the university experience is the same due to the large number of international students at these universities and not much going on in the students union. However, job prospects may be better if you go to a London university. Getting into Oxbridge is obviously a good step if you can get in but I think even if you have 3A* it is a bit of a lottery whether you get a place.

I think the student loan is a debt/graduate tax. I would hope my DC earns over £28,000 and so he would have to pay it off over 40 years while the debt gets larger and larger. Although I am thinking about just paying for it all to avoid the interest. I have read Martin Lewis' discussion of this now and he is saying that if parents believe their children will earn over the the threshold of £28,000 then it can make sense for parent to just pay the cost.
Some students have said their £50,000 debt has tripled with interest rates. I have just put into the student loan calculator, £50,000 of debt to see how much you would have to pay back if you earned £40,000 a year. It calculates, you would have to repay £101,000.

I also agree with you that there should be more short-courses at universities alongside apprenticeships/work so we don't have such a huge proportion of the population in debt for a degree that they may never be able to pay back.

An extra 9% of income tax across your working life is staggering. The tate is interest indefensible.

I think this isn’t panning out fir two reasons: too many people are going to university. There isn’t enough wage growth for the students to eventually out run their debt.

@EmpressoftheMundane don’t the newest loans have interest pegged to inflation?…though with the 40 year repayment term catch!

A bit of a thread digression but on your interest and general financial sustainability point have a look at the supporting document for this HoCL report https://commonslibrary.parliament.uk/research-briefings/sn01079/

Table 2 in the reference files shows the interest added each year, this for English domiciled students plus EU students at English unis.

2013-14 £0.921 bn interest added

2023-24 £15.275bn interest added. In contrast repayments for the year totalled £4.6bn

Outstanding loan value at end 2023-24 £236bn, £31bn up on the end 2022-23 figure, and just about double the end 2018-19 amount, and more than four times the 2013-14 figure.

@Runemum Yes but grads pay according to what they earn. The debt is largely irrelevant. You earn £35,000 you pay on that basis. The unfortunate thing is the length of the payments being much longer. However many people do not have £30,000 per child so no chance of paying fees up front. The loan is here to stay. It’s underwritten by the taxpayer at a cost of £billions too. So the the taxpayer should require value for money.

When the Conservative government introduced the post 92 universities it was a game changer. Firstly for the number of students and secondly on student finance. How could we afford to send so many to university? Turned out we couldn’t. So students make a contribution because they get an earnings premium. What other options are there? Go back to pre 1992? Close down universities and restrict numbers? Greatly boost apprenticeships and part time study? If we want 35-38% to go we cannot put that financial burden on the 50% of the workforce who haven’t been and earn less. They are the worst off in society already.

I don’t think comparing one RG uni with another is really where the big salary imbalances arise. The IFS compared LSE and Wolverhampton. Same fee for Economics but different earnings potential. Obviously LSE and Imperial are equivalent to Oxbridge but the key is to look at universities that are not dissimilar if you have that level of ability. Dont sell yourself short. There are jobs out there for great students from many universities but I believe uni and course matters. I’m not sure apprenticeships have replaced Economics grads either.

I agree with this. I also hate the way that this means you can borrow the same amount of money but pay back wildly different amounts. Someone who earns over £100K will pay back less than someone earning £65K, as the higher earner will pay it off more quickly and incur less interest.

The middle earners (£50K-£70K - who i would assume to be most of the Middle England graduate cohort) are the worst affected - they lose child benefit, will see hundreds of pounds disappear out of their paypackets every month, never pay off their loan and pay off far more interest than anyone else.

Yes, the way taxes, benefits and student loans interact needs to be desperately sorted out. It’s stopping a generation from thriving and starting families.

@TizerorFizz
I agree that student loans are here to stay and we can't put anymore burden on the taxpayer.
I just don't like the idea of my DC having to.pay off a £50,000 loan, which then doubles/triples due to interest rates. According to the student loan calculator, if you are earning £35,000 and you have a £50,000 loan then you repay £58 per month. I guess this isn't a huge amount but with a mortgage and bills to pay, it also not nothing.
In order to be sure this debt is worth it, the degree must increase earning power and I don't think.all of them do.
Assuming a student can't get into Oxbridge, LSE or Warwick or an equivalent university for Economics, would a student not be better off with a degree apprenticeship from KPMG or Santander or Barclays or going straight to an accountancy firm. Purely based on money. I understand there is a loss of the university experience but again is the £50,000 price tag worth it?

Why was 1992 a game changer? The funding system was the same for polytechnics as for universities. The source of funding was the same for both, different quangos, but still central Gov funded.

Is there a document somewhere that shows earning potential by course, rather than just by uni?

@Octocat The IFS has research on this. Medicine top, arts and agriculture near the bottom. English also near the bottom. Economics near the top. The obvious thing is that top 15 in CUG plus a few others won’t hold you back for many subjects but there’s always personal attributes in how well a grad does. It’s clear though that elite universities give grads a good start and within the student body there’s a desire to get a good job. At some universities the grads serve a more local market that doesn’t pay well.

You also have to consider that virtually any health related degree will result in work. Doing English or Philosophy or Anthropology means you must be strategic in job applications. These grads aren’t “qualified” for anything so need to consider next steps at an early stage - but lots don’t.

Thanks. DD is thinking of something environment focussed. I suppose what I don't know is, how to spot those courses that may be very highly regarded for the subject but not necessarily taught at Oxbridge, Durham etc. What is CUG?

These grads aren’t “qualified” for anything so need to consider next steps at an early stage - but lots don’t.

It's worth mentioning that the latest ISE data suggests that 86% of graduate jobs aren't asking for a specific degree. This means skills development and the ability to articulate demonstrate those skills are vital.
I'd recommend that students start to engage with their careers service in year 1.

@Runemum but places on those degree apprenticeship schemes you mention are often far more competitive than getting into Oxbridge or LSE….

Complete University Guide.

Thanks!

I agree that degree apprenticeships at the large companies are very competitive. The ones is smaller local firms are less so and going into accountancy is also less competitive than getting into Oxbridge.

Just read this article on the dilemma for young people of repaying their debt versus saving for a mortgage deposit. www.telegraph.co.uk/money/banking/savings-accounts/saved-10k-for-house-deposit-better-paying-student-loan/

This is nonsense, they are qualified for many things, including further research, admin, publishing etc etc, and they are no less qualified than someone straight out of a Biology degree or a Chemical Engineering degree or economics for that matter. Nor Maths nor most subjects, because universities were never meant to be vocational in that way. Even vocational subjects such as Law and Medicine require many further years of study.

Tizer, your figures are suspect. Medicine is now very problematic. Only one specialist training place for every five finishing their foundation years, made worse by the fact that over half of these this year went to graduates from overseas medical schools, some of whom may never have visited the UK, let alone ever qorkwd fir the NHS. Whilst entry level non specialist roles routinely attract several hundreds of applicants. Doctor unemployment is a real thing. It is very difficult for a newly qualified doctor to compete with others who may have several years experience. But they need the job to get the experience.

My understanding is that law is similar, though unlike medicine there may be immigration restrictions that allow employers to prioritise those resident in the UK.

It is very hard to predict future employment prospects from historical statistics. A lot of software jobs are being off-shored. Data science is not the boom career it was.

Many would be advised to take shorter courses aimed at acquiring skills, and then update those skills as and when needed throughout a career.

You can also add nurses and midwives to the list of graduates struggling to find jobs. I also hear that paramedics are soon expected to be in the same boat.

The problem with using past data, the experience of recent grads or specific issues with specific professions / sectors is that it doesn’t predict outcomes for young people contemplating their choices. It’s a very personal decision, the outcome is influenced by factors within and outwith your control. It’s not a simple formula “do course X at university Y and you will earn Z”.

The real world is more complex than the two extremes posited here - university is a waste of money vs you have to go to university to get anywhere in life.