A s around 430,000 students head to university this September, there will doubtless be many who are worried about managing their finances for the first time in their lives. The beast looming in the back of their minds is the inevitable student debt that a worrying number of students will find themselves in: according to Which?, a fifth of students relied on their overdraft just to manage their living costs, while just under a half said they had asked their parents or family for extra money. The common justification for attending university of course has long been that it should lead to better job prospects in the future. For many students now, that narrative is running rather thin.
One option growing in popularity among College leavers is to head straight into work in the form of an apprenticeship, where you are able to earn the same qualifications from learning on the job, without the price tag of a university. Moreover, those who opt to study for a level 5 higher apprenticeship are estimated to earn £1.5million during the course of their career, almost £52,000 more than graduates from non-elite universities who can only expect to earn £1.4million. Although students from top Russell Group universities come out on top with estimated lifetime earnings of £1.6million, apprenticeship participation is also at record levels, with 121,250 young people taking part in the 2016 to 2017 academic year. If you’re under 25 the government and your employer fund your training so you don’t have to pay a penny, whereas studying for a degree will cost you £9,000 per year in tuition fees, plus additional living expenses. Overall it’s estimated that an undergraduate could leave university with up to £50,000 worth of debt.
So why aren’t more people joining apprenticeship programmes? Simply put, there aren’t enough opportunities for young people graduating college. Critics say employers are being driven away from creating new apprenticeship posts due to the increased costs and complexity of the new scheme. Since April 2017, businesses with a payroll of more than £3m are charged 0.5% of their payroll towards the apprenticeship levy. A fifth of training must be carried out away from the workplace and employers with 50 or more staff must contribute 10% of the cost.
“Clearly the new system has failed to take off. The levy can be difficult to navigate and many employers still struggle to comprehend how the system is meant to work.” – Seamus Nevin
Seamus Nevin, head of policy research at the Institute of Directors (IoD), noted that the government risked failing to meet its target of 3 million people starting apprenticeships by 2020.
Yet as more apprenticeship opportunities and school leaver programmes become available and the price of university continues to rise, we may see fewer young people heading to university. There will of course still be demand for university places going forward as there are many high skill professions that require a degree as well as a number of students who wish to attend university for the sake of learning, but for those who want to get a head-start in an ever more competitive workplace, university may become a less attractive option.