UK student debt to rise further as large companies reduce graduate intake
The first UK students who had to pay £9,000 fees graduated last year and they are not finding it easy, says The Guardian. The National Union of Students reveals that nearly half of them are back living with their parents, with the Institute of Fiscal Studies warning the "graduate premium," which is the difference between graduate and non-graduate earnings, is to shrink. Sharon Walpole, CEO of Not Going to Uni, says some large employers are planning to reduce their graduate intake when the apprenticeship levy is launched in spring 2017. 

When university tuition costs nearly trebled from £3,375 a year to £9,000 in 2012, students were promised value for money, more choice and higher lifetime earnings than non-graduates. But the first students to pay the new fees, many of whom graduated last summer, are not having it easy.

According to the National Union of Students, nearly half of those who graduated in 2015 are back living with their parents. The Institute for Fiscal Studies has warned that the “graduate premium” – the difference between graduate and non-graduate earnings – is likely to shrink as more people get degrees.

And there could be more bad news on the horizon. Sharon Walpole, the chief executive of Not Going to Uni, says some large employers plan to reduce their graduate intake when the apprenticeship levy — a tax on employers with a wage bill of £3m or more – is launched in spring 2017. “Businesses forced to pay huge sums to fund apprenticeships are planning to replace some of their graduates with apprentices to recoup their investment. There’s a real risk that they will be cutting jobs just as graduates are coming out with debts equal to a third of the average mortgage,” Walpole says.

So we asked recent graduates if university is still worth it.

Leah Maclean, 22, graduated from the University of Nottingham with a first in history and politics. “There are a lot of great graduate schemes but there is also a lot of competition. Amazon was about the 15th one I applied for and the only one that offered me a place. I was lucky because not only did I get to join an international company that is taking me in the right career direction but I was also assigned to fashion, an area I really enjoy. I got a sign-on bonus and a good enough salary to be able to afford to live in rented accommodation in London.

“University was expensive,” she says. “I got a letter when I started paying it back in April and it said I owed £50,000. It was about £10k more than I expected – I didn’t know that the interest had been mounting up from the first term.”

Sam O’Connor, 22, who graduated with a 2:2 in biomedical science from Queen Mary University of London and now works in marketing for the London Imaging Centre, says: “When you spend the money to get a degree you expect to get a return on your investment, so I hope my earnings will be high enough to pay it back without too much trouble. I owe about £42,000 and don’t feel I got the amount of education I paid for. I came in with very good A-levels and fired up to do well but the course didn’t engage me. The lab work was good but the lectures were pretty mundane and there was a lot of ‘remember this and regurgitate it on a test paper’.

“I took on marketing-based roles for my university snow sports club and, about halfway through my course, I decided to go in that direction and not pursue a science-based career. It was the right decision, though job hunting was disheartening at first. I did a short internship and then some marketing for a ski-boot fitting company. It was a good experience but a bit of a struggle financially. Then, through a recruitment agency, I found a marketing internship with a private company providing [medical] diagnostic images. They gave me a job two months into the three-month internship and I’m earning around £23,000. The medical knowledge I gained from my degree is very useful when I speak to clinics and doctors.

“I’d been living in London as a student but I’ve moved back home to a village near Guildford while I find another place to rent. I get on well with my parents and I’ve friends around because a lot of them are living back home too.”

Rachel Kreuder.

Rachel Kreuder, 22, graduated from Anglia Ruskin University with a 2:1 degree in psychology. She is back home, unemployed and planning her next move: “I was working so hard in my final year that I didn’t get to apply for jobs so I thought I would give myself a year to earn some money and learn to drive. I got a sales assistant job in a jewellers and it was boring. I saw other people going straight into graduate jobs and what I was doing seemed a waste of time. I was unhappy and stressed so I left and did seven months as a teaching assistant.

“I decided teaching wasn’t for me and I was in a bit of a panic about it all, then somebody mentioned social work and I realised I could work in mental health, something that really interests me.

“I don’t regret going to university but I wish I had gone into it a bit more beforehand. My psychology degree alone isn’t enough to go into social work so it will take me up to two years to get the qualifications and training I need.

“I don’t know exactly how much I owe in student loans but based on what other people owe I think it is probably around £40,000. I’m not worried about it yet. I’m back at home and that’s fine; it’s different but I’ve settled back in pretty well.”

Joe Alexander, 22, graduated from the University of Exeter with a 2:1 in politics and sociology and worked for a digital media company until it folded: “I first applied to Sony Music and got through all the stages. Then, after the final interview for a marketing role I received a voicemail saying they had decided to keep on the present intern. I wasn’t sure what to do next so I got in touch with an agency called Inspiring Interns. They invited me to their office and helped me make a short video to introduce myself that went on their site. When I got home there were emails inviting me to four interviews.

“I was offered a job in business development with a digital media agency. I really enjoyed it, but unfortunately the company folded a few months ago. Now I’m looking for a new challenge but with a lot more experience behind me. I’m lucky to have been able to move back to live with my parents in London where there are more jobs.

“University was definitely worth it. However, it’s alarming that the fees are set to increase even higher. University is not for everyone but we should all have the right to attend. It’s ludicrous to put financial obstacles in the way of people not so fortunate, and potentially risk a Brexit-style divide between young people who think they can or cannot afford a university degree.”