Grad Debt To Climb as High as £60K?
According to reports in the press based on research conducted by Johnny Rich and the Push Guide, graduation debt for those applying now could rise as high as £60,000.
The research is based on a survey of over 2,500 students at around 111 campuses, and shows that some are already graduating owing over £50K. The highest found being an average of over £57,000 to graduate from University College London.
Leaving aside any of our personal feelings about publicly funded universities costing students this level of indebtedness, are these stats correct? The short answer is ‘Yes’. But the short answer is not the whole picture.
The debt will be parked in a earnings related pay-back system that most regard as fairer than the system first introduced under New Labour. However, debt it still is, as governments of all persuasions have resisted a graduation tax in preference for the arguably clumsier, current loan system and university administered set-up.
‘Courses & Careers’ (the advice e-mag and website for those looking at university) has been making accurate student debt forecasts since fees were first introduced. Their current forecast is a graduation debt (for English as opposed to Scottish or Welsh) students of a range between £42,000-£52,000. They also published graduate earnings figures for those even at the age of 40 that showed holding a degree had a significant positive effect on earning power over a working lifetime.
Current graduate earning forecasts (that have plunged with the recession) vary for the graduate lifetime earnings premium, of anything between £100,000 and £900,000 - depending on the study/survey. So still worth it as a mortgage or investment. However things will change if costs keep rising, the recession becomes a decade-long event, or the government ‘sells’ or privatises the student debt ‘portfolio’ to a commercial owner looking for a higher repayment level.
Going to university still shows a lifetime earnings advantage, but costs are now such that you cannot be certain that this applies to all courses at all universities. Getting a degree still makes you less likely to be unemployed even if your first two jobs (on average) do not need you to use your degree. This is important with almost a third of the nearly 3 million unemployed being under 25.
Finally if you are female your only realistic chance of pay equality is if you are a graduate. Non-grad females still earn almost 40% less than men, even after 30 years of legislation. Only as a grad do females get within 10% of equivalent male pay, or parity in professions such as the law, or even out-earn men (such as Chemical Engineering!).