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It's 2023, is UK Higher Education Worth it anymore?

The forecast average debt among the cohort of borrowers who started their course in 2021/22 is £45,800, and that’s not including interest. To put $45,800 in perspective, instead of a university degree you could buy a nice car, put a down payment on a £450,800 house or Gnome someone’s house via the dark web about 901 times. With initiatives like paid UK apprenticeships and affordable education platforms like Peterson academy giving people alternative opportunities for high-quality education, I began to wonder, is university in the UK worth it anymore? For most men and some women, the data says maybe not.

Education, happiness and stories of success

As we’ve explored success and happiness the past few weeks, one of the factors of happiness that stood out to me was those who are happier tend to be educated, but not too educated. This could be because one of the other common factors for happiness includes being religious and highly educated people tend to be less religious, but I’m not sure. Regardless, the link between economic success and wealth fascinates me because I’ve grown up believing that a university education was necessary for success. Seeing the world how I do now, I’ve begun to question if that’s the case.

What has made me question my perspective was the realisation that a lot of people reach success without a traditional degree, and a lot of people with degrees don’t reach success.

For example, my own mother made six figures for the majority of her career without a college degree working as a computer programmer, and in my first job out of university at employer branding agency Blackbridge Communications, I saw countless opportunities for apprenticeships that paid you instead of the other way around. Lastly, I’ve heard many friends who went through university say the words “I’m not sure it was worth it.”

What was my experience?

I went to the University of Surrey and studied Business Management. Coming from the USA to the UK has been one of the best decisions I’ve ever made, but it’s because I’ve taken every opportunity possible. How did I do this? Well, I always kept my eyes and ears peeled, but it was only because I was able to.

For me, university has been worth it, but I’m not sure if I’m an exception for feeling this way because I’m lucky enough to be one of the few people I know who graduated from university debt free. My tuition was 100% covered by insurance money from a house fire I had when I was 16. I worked short stint jobs in university, but I was blessed in the sense I could pour all my time into studying, building relationships and extra curricular activities like Business Society, Nutrition Society and running a marketing campaign against sexual violence called The Guard in my final year of university.

Without Surrey and SurreyConnects (their mentoring platform), I never would have met my mentor Richella Homer who connected me to my first job at Blackbridge Communications. I also wouldn’t have some of my closest friends (I was going to list them but I’d deffo forget someone, you guys know who you are and I’m so grateful for you). One thing I’m sure of is university utilised to it’s full potential has a lot of benefits, but I have to question if for the average person it outweighs the costs.

What does the data say?

When it comes to ROI for higher education, gender matters. In 2018 the independent Institute for Fiscal Studies found that female and male graduates are earning 28 per cent and 8 per cent more on average than their non-graduate counterparts by the age of 29. This gendered gap in return on investment (ROI) could be why there has been a trend of more women than men going to university for the past few years.

For the average male, an 8 per cent increase in salary might not outweigh the short-term cost of university debt. Additionally, it’s worth noting Research from the London-based Institute of Fiscal Studies has found that there is “substantial variation in net lifetime returns across subjects” taken by graduates and that these returns vary by gender.

For women, the ROI of a woman studying art or social care is close to zero, but subjects like law, economics or medicine tend to pay themselves off with returns upwards of £250,000. Other subjects like nursing or education tend to give low but steady positive returns. For men, creative arts and social studies gave a negative ROI, but economics and medicine graduates received average lifetime returns of around £500k. The average net lifetime returns for agriculture, English, physical sciences and communications are around zero, but, maths, computing, medicine and economics offer positive returns to almost all men who study them.

The role of university type

Gender isn’t the only thing that matters when it comes to ROI on a degree. University branding is important too. Students at Russel Group universities in the UK are more likely to complete their studies, which is important for job prospects post-university. This again varies by gender.

A large majority of women benefit from attending HE. Only the top end of the distribution of women attending Russell Group universities can expect higher lifetime returns from going to university than women who attended universities elsewhere,” it said. For men, average returns at Russell Group universities are high at almost £250,000 on average, and “a sizable minority of men who attend non-Russell Group universities will see negative returns in discounted net present value terms”.

It’s difficult to determine which universities actually give the best ROI, but it appears if you’re a man, going to a Russel Group university should be at the top of your priority list.

So, is UK university worth it?

Another perspective from my friend Max, who is a UK Citizen, was "one thing that wasnt considered is that a student loan for UK residents isnt technically a “debt”. Yes, I pay off a small amount each month, but I did not have that money to start with and this allowed me to go to reach the level in my career that I never could have. Also, you only start repaying this earning £30k (ish) and above, which some people take a while to hit. Then after 30 years the loan is supposed to be wiped, regardless of how much is paid off."

When talking about my experience in university in the UK, one of the greatest gifts of my four years are the people I met, but from a purely economic standpoint, the data shows when considering if university in the UK is worth it for you, you need to think about your gender, what you’re studying and where you’re going.

If you’re a woman, for most subjects University seems to be a good idea. If you’re a man going to a non-Russel Group university for a subject other than medicine, economics or a STEM subject, consider looking into an alternative like an apprenticeship.

What’s next

Thanks for reading this week’s blog post, I hope you found this information valuable. Come back next week if you want to know the effects of physical health on success.

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