Friday, August 17, 2012
You`ve got a place at university - but is it worth paying the fees to go?
That's Plan A. But what if I don’t get the grades needed to gain entry? I don’t have a Plan B.
With so many unemployed people the working world seems so different from full-time education, but is it even worth going to university?
Linda Mckay of This is Money replies: Got your university place offer, got a student loan application in and possibly reserved a place on campus. Sorted. Well almost.
Like others in your situation, it all hangs in the balance until the A-Level results came through yesterday.
Students like you have a lot riding on that and This is Money hopes you got the grades that you need and want. This September marks the £9,000 university tuition fee increase and graduates of 2015 will be hugely in debt when they finish so to continue on this path takes courage and a certain canniness with personal finance.
Some may still be paying off student loans into their 50s. I asked our experts for help to arm A-Level students who may not get the grades they want with options for the future.
Simon Dolan, Twitter Dragon and the author of How To Make Millions Without A Degree, replies: You need to take a step back and ask yourself a couple of questions.
First of all, do you have any impartial evidence that getting this particular degree will help you get a job? And secondly, what is the realistic likelihood that you will obtain at least a 2:1?
It is extremely important that you give these questions a great deal of thought.
Most people planning on going to university have been told throughout their education that getting a degree will mean a good job. This is demonstrably false with a record number of jobless 16-24-year-olds in UK.
Getting a first or a 2:1 in a relevant degree from a good university will increase your chances of work but not guarantee it.
Even if you answer positively to both questions, consider that you will come out with at least £50,000 debt.
Will the potentially higher salary you command be enough to pay this back, or would you be better getting into the job you want via another method?
You recognise quite rightly that work is very different from full-time education – it will remain just as different whether you go to uni or not.
My advice would be that unless a degree is absolutely critical to what you want to do (law, medicine etc), and you have a good chance of getting the required degree, reconsider the university option and take a chance on the world of work.
Don’t be too fussy about what you take, start at the bottom, and spend the next three years working your way up. You may be lucky and land a position with an employer who could sponsor further training or combine part-time education with work.
By the time your friends emerge from university you’ll have three years’ worth of experience, no debt and a great understanding of the working world. People say that there are no jobs about but believe me, there is a far greater shortage of enthusiastic and energetic candidates than there is jobs.
Simon is MD and founder of SJD Accountancy, Easy Accountancy and Contractor Umbrella. He also wrote How To Make Millions Without A Degree (Matador)
Simon Lambert, of This is Money, adds: There are some good points made by Simon Dolan above and they certainly apply to those simply planning to go to university because that’s what they think they should do next.
However, there is another important point to remember – a university education is not simply measured in how it translates to earnings. Learning has an intrinsic value and need not be directly related to any job you eventually do - it expands your mind, your skills and your ability.
This is something that has been lost in recent years, as we have bundled more and more people into universities, often just for the sake of it.
If the course you want to study is something you are passionate about, want to explore and understand further and is taught by a good university department, then how the cost relates to ultimate earnings is not the only test of whether it is worthwhile.
Make sure you make the most of that course though, attend all your lectures and tutorials, engage as much as you can with the learning experience and other students and do all you can to immerse yourself in it.
Those three or four years will pass very quickly and it is unlikely you will have the opportunity to apply yourself to learning like this again – it will also be very expensive.
You should also consider the prospect of working for a year or so before going to university. A gap between school and university can involve travel and also experiencing the world of work – ideally you can combine the two.
I know people who I would never have judged were cut out for higher education, who instead worked and travelled for three or four years and then decide off their own back to go to university.
They invariably did far better at university and had a much better work ethic than many people I know who went straight from school.
Student finance: the basics explained
Linda Mckay adds: Fear of finance can be misplaced and may stop you getting the education you want. If you do get your grades and decide to go ahead with university make sure you budget carefully.
Student loans are relatively low cost but they are still debt that has to be repaid.
The tuition fee loan is a maximum of £9,000 pa.
A non-repayable maintenance grant may be available dependent on parent’s income (max £3,250 per year).
A repayable maintenance loan can be applied for (max £5,500 for outside London).
Loans are not repayable until the graduate is in paid employment earning £21,000 or more. The loan is repayable at 9% of what you earn over £21,000 out of your post-tax income. If your income falls below £21,000 a year, your repayments stop. After 25 years any outstanding amount is written off.
You’re charged interest on your loan from the time you get your first payment in university until you pay your loan back in full.
The actual interest rate depends on the rate of retail prices inflation each March and is then applied for a year from September.
While you are studying the interest rate on your loan is the current rate of inflation plus 3 per cent. This year that will be 6.6 per cent.
Once you finish studying the interest rate is set at inflation and it then rises once you earn more than £21,000, stepping up by about 0.15 per cent with extra £1,000 that you earn, to a maximum of inflation plus 3 per cent.
Most universities offer a limited number of bursaries and scholarships. Contact your university to see what might be available.