Nicola Woolcock
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Students are running up substantial debts but earning less than they expect on graduating, research indicates.
The authors of a report say that government ambitions to push half of all school-leavers into higher education could be to blame for the mismatch between expectations and reality.
On average, students misjudge their starting salaries by more than £2,000, according to the research led by John Jerrim, a PhD student at Southampton University's department of social statistics.
New graduates were paid an average of £16,600, rather than the £18,600 that they had expected. Some had been ambitious enough to anticipate a six-figure pay packet.
Students now commonly graduate with £30,000 of debt, accumulated through tuition fees and living expenses. The research raised questions about ministers' assumptions that a degree almost guarantees a decent salary. Its authors said: “Overestimating future wages could lead some students to mistakenly choose to go to university, when they will not receive the benefit they expect.
“This may be further exacerbated by government policy that encourages young people to go to university, highlighting the magnitude of possibilities the student will have on graduation, that never actually materialise.”
Bill Rammell, the Higher Education Minister, said recently: “A university degree is a great way to get a good, well-paid job, and to get on in life - a picture that only improves over time. Graduates can expect to earn considerably more over their careers than those without a degree.”
The survey of more than 3,000 students across 70 universities found that the average student overestimated his or her first annual wage by 12 per cent. Those from the elite Russell Group universities were marginally more unrealistic, anticipating 13 per cent (£2,165) more than they would earn.
Black and Asian students overcalculated by 14 per cent (£2,332), while first-year students estimated that they would earn 16 per cent (£2,500) more, perhaps because “students who have just made the decision to invest in university education have especially inflated expectations”. Medical students were rare in underestimating how much they would earn. There was a significant difference in expectations based on wealth and privilege, with the children of high-earning parents expecting better salaries. The authors said: “Students may use their parents' income as a benchmark for their future salary, or think their parents have connections in the labour market that will help secure them a lucrative job.
The report concluded: “Students are using credit markets, in part, to smooth their consumption over time. An oversupply of easy, cheap money could well lead some individuals into difficulties later in life. Young people may be entering university based on unrealistically high expectations.”
Students also gather thousands of pounds worth of equipment. Research by Ensleigh insurance company found that a student's laptops, mobile phones and similar goods were worth an average of £6,000.
Case Study: Anna Griffiths
Ms Griffiths, 21, graduates today but is not walking into her dream job. Instead the comparative literature graduate, who wants a career in fashion journalism or in the saleroom, will work at a boutique this summer.
Anna, who went to King's College London, said: “I certainly didn't think it would be this hard to find work. I thought once I had a degree I would automatically get a job. But my friends and I are finding there's nothing available and no one is taking anyone on. I'm going to use this year to get as much experience as I can. Hopefully by next year the economy will be in a better state.
“I didn't think about my starting salary when I began my degree, but for my first job I would want at least £15,000.”
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It's time to stop making young people think that a degree is the only way forward. Bring back proper academic studies, technical colleges and apprentices, so all abilities, desires and aspirations are catered for. This year-on-year increase in student numbers is just ridiculous.
SK, Bath, UK
Tony Blair was stupid to set a target of 50% of school leavers to go to university. This has just meant that we all have to pay more to finance worthless degrees at poor universities. We should have quality over quantity. Bring back grants and reduce the number of students!
Hannah, Bath,
At 6th form we were all told that uni was the best (and only) way forward. I graduated with a 2:1 last week (+ £12k of debt), and am struggling to find work, even through agencies. We were told that most graduates start on around £20k - I'm looking at minimum wage, if and when I find something.
Carys, Lancaster,
When I graduated we still had grants, no where near enough to cover raising my daughter as a single mum. I left with debts, I earned payed about 13K a month. I payed back my loan in 6 years. I tightened my belt and basically dumped most of my social life. It can be done but you have to sacrifice.
Sarah, Nottingham, UK
I thought students used to work part time to pay off their debts. Or do students nowadays think part-time work is beneath their dignity? Well they can have fun with their £30k debt for the rest of their life then.
Trevor M, Sheffield,
I love how the only case study given was from a girl with a mickey-mouse degree. Conveniently, they chose not to do a case study on someone with a degree in Computer Science, Physics, Engineering, or something real.
karl, scotland,
I was one of the lucky ones, well in a way. I left Uni after studying Comp Science and found work straight away earning 16.5k but I was over optimistic thinking I deserved 20k. The debt situation for many students is very bad and I've left with 2 overdrafts and a credit card.
Mick, Blackburn, England
I remember when I wanted to go to Uni I was bombarded with "dont worry you dont have to pay the debt back till you start earning enough" getting debt was way too easy. I looked for part time jobs while at Uni but not much was available and once left I couldn't find work had to temp work for 1yr
Maria, Dunstable, UK
Bill, it costs on average £12,000 - £14,000 a year. Tuition, £120 pw rent, bills, books, food, other fee's and charges by the uni's. No matter how many jobs you have you will leave in debt. My parents could not contribute so i worked term and 80hr weeks in the summer holidays and still left in debt.
Simon, London,
Many college students have unrealistic expectations that a degree equates to a lucrative salary. Reality is not always pretty. I am encouraging my children to learn a trade to compliment their education at college level. One son wants to be an architect. He has learned to cut and lay stone at 14
PAMELA , Lawrence, USA
where do these people work? i am an intern and earn almost 800 pounds a week! how can anyone survive on 15,000 pounds a year? this country is way too expensive to justify such a derisory salary.
Alex, london, england
Why do students automatically expect to walk into a well paid job immediately following gradually, buy a house, new car & all the trimmings. The first thing Universties need to teach is common sense, sadly most students seem to lack same, hence the unrealistic expectations!
R Holmes, London, England
Perhaps a few less Mickey Mouse degrees is called for. Maths and science by all means, but some of them are totally stupid.
Roz, Barnsley, UK
To Bill Suzhou - times change. University life is not cheap, both in tuition and living cost, a couple of pints on a friday night and you're looking at £20-30. I am currently working full time to pay mounting debts for uni. Coincidently, the job pays £16,600, so what is the incentive to continue.
Daniel, Woodstock, England
I left with 9 grand of student debt and that was living at home and working. That 9 grand is now 10 grand as i dont earn enough to pay it off!
The student loans company charges more in intrest a year than i pay off and my debt after 10 years has gone up by 1k.
MR W Jones, Liverpool, England
Advice to those recently graduated - if you're living up north head for the south i.e. Central London. The wages are far higher down there even with the cost of living being higher & you get treated like an adult. Engels 'The Condition of the Working Class' still haunts the north today .
Mike, 25, Manchester, UK PLC
"£30,000 debt? How?"
3 years without any real source of income (bits and peices during the summer months & maybe at the weekends). Then also paying for expensive text books, tuition fees, food, accomodation (v expensive!) let alone having a life. one yr cost me £20K in fees alone- its easy!
Simon, Birmingham,
Some of us saw it coming. In my case I saw it in standards of IT education. From what I've seen most IT qualifications are little more than "Knows how to use Microsoft Word" stamps. Rather worrying that I, an Acting Student, know more about maintaining and building a computer network than teachers.
Ian, Plymouth, UK
Not only do students over estimate their salary expectations but also their worth to an employer. We get media graduates telling us they want £22k!!! and they can't event spell.
University in the UK is now merely a numbers game to make more money.
lordshaw, Nottingham, uk
My God! £30,000 debt? How? In my day, we worked the holidays washing dishes, waitering etc, to make our tuition fees and THEN took part-time jobs in Term to buy books, food & a couple of pints on Friday night. When I left with my PhD, my first month's pay of £60 was 100% profit. What has gone wrong?
Bill, Suzhou, China
I completely agree with this. Apart from the overestimation of wages, 'money' is simply too easy to get hold of for a person just turned 18. I left university with over 18k of student loan debts alone, not to mention the 2 overdrafts and 3 credit cards I had.
Emily Gibbs, Kong Kong Island,
Life 101, all that glitters is not gold. A large part of life today is packaging . Never mind the quality feel the width. Sums up education system production. Skilled technicians are more valued in every day life. See cost of Plumbers/Electricians etc. not Snake oil salesmen. Caveat Emptor.
Alexander, Victoria, seychelles
Wow! Graduate wages really have not risen much in the 8 years since I left the UK with a Ph.D., nor from the time I got my B.Sc. in 1996 (risen about 10% in 12 years). Meanwhile, housing tripled, food doubled and crime went off the charts. I will not be back.
DB, Oak Ridge, TN, USA
As the UK increases student numbers to US levels, one must keep in mind inequalities. 1) most in US get much financial assistance, 2) degrees are 4 years - plentiful part time work, 3) cost of living $1 = 1 pound, 4) work study and 5) tuition - $20K per year or $6K - IN STATE (majority of students).
DB, Oak Ridge, USA
Saddled with such debt, it is impossible to save money to get on the housing ladder. With good news that house prices are falling, comes bad news that first-time buyers can't get 100% mortgages to help them onto the first rung. Those I know on the ladder didn't go to university... go figure!
Laura, Leatherhead, UK
You can't blame the students for unrealistic expectations. Throughout their time in the sixth form, they have been bombarded with presentations from AimHigher, assuring them the debts they will accrue are easily affordable, and promising them they will earn significantly higher salaries as graduates
Gill, Southampton, UK
Let's hope that at least the economics students and the accountancy students saw this one coming.
Simon Levene, Richmond, England