Given the Cost of Higher Education, Should I Bother Going to University?

Yes, says Andrew Oswald, Professor of economics at the University of Warwick.

Research shows that going to university is likely to make you richer, healthier and happier. These gains, for the typical British person, will outweigh the costs of university education. Interestingly, doing a degree will probably also make you a little more left-wing and make you live slightly longer.

However, there are caveats that need to be kept in mind. The gains from a university education are greater for those who do science or social sciences, for those who go to a top university and for those who earn first-class honour degrees. They are also generally bigger for women than men.

First, let us imagine that you have a couple of A-levels and are trying to decide whether to do a university degree. On average, a degree will improve your lifetime income by about 20% if you are a man and by around 30% if you are a woman, sums that would easily cover your university fees and the cost of not earning for a few years while young. Nevertheless, such averages hide a lot of variation. For instance, when put into economists’ jargon, arts and humanities degrees are associated on average with a positive rate of return only for women. The biggest financial returns seem to be gained by students doing subjects such as mathematics, medicine, engineering, accounting, and economics.

Second, it is difficult to say what education does for a person when we cannot run a proper controlled experiment, an experiment in which some people are randomly assigned to university education while others in a control group are told they must start work. Here the UK education acts that raised the school-leaving age have helped researchers enormously. These effectively forced cohorts of youngsters to stay on in education longer than the year group that graduated just before them. Sure enough, the ones who were required to stay on turn out, much later in life, to be richer, happier and healthier.

Third, we are not sure why extra years of education lead people to be healthier and (probably) have longer life spans. One potential mechanism is that people with more education are better able to assess probability and risk. For example, they seem to smoke less. Another possibility, suggested by some of my own research on obesity and happiness, is that those who mix with highly educated individuals worry more about putting on weight and eating the wrong food; they invest more in their own health.

Fourth, we know that people with degrees who are made redundant find new jobs more quickly. This may be because a university education fosters a flexible, adaptable way of thinking.

My own view is that the biggest advantages of a degree are rather different: a university education helps people to understand what they do not know and therefore makes human beings less dogmatic and more open-minded. Not even an economist such as I knows how to put a price on that asset.

No, says Tom Mursell, 19-year-old founder of job-search website.

There is no getting around the fact that a university education is expensive and that cost is one of the main reasons that puts people off higher education. The National Union of Students has estimated that a degree typically costs £10,980 a year – £32,940 for a three-year course and £43,920 for four years. The average university debt is expected to rise to £20,000 by 2010, typically taking 11 years to pay off. I’m not here to tell anyone whether or not to go to university, but anyone thinking about it has to ask themselves – is it really worth it?

Sure, university is fantastic for a lot of people. For tomorrow’s doctors, vets and barristers, university pays for itself not long after graduation, apart from the fact that it is essential for anyone planning to embark on such a career.

However, with up to one in four students dropping out of university and most accumulating debt in the process, it is time to reassess not only the government’s target of getting 50% of young people through university by 2010, but also the stigma attached to non-graduates. For years this high target has been pushing people through university who don’t want to be there, but feel that they should be. Over the past few months I have spoken to lecturers who feel that higher education will be of no benefit to some of their students.

Despite the fact that the costs of going to university have risen, you could argue that the value of a degree has diminished. As a 19-year-old recent school-leaver, I have personal experience of this. While working through sixth-form college, stacking shelves at my local supermarket, I was astounded by the number of graduates doing the same job, complaining that a degree had not helped them in any way. On average, around a quarter of graduates are not in degree-level jobs three-and-a-half years after graduation, a figure that rises to 40% on some courses.

On average, graduates may earn £100,000 more than non-graduates over their lifetime, but that figure is skewed by the high-level earnings of, for example, brain surgeons and doctors. Besides, should we define success by how much we earn over a lifetime or by how happy we are in our jobs? As the new apprenticeship TV ad campaign recognises, some people would just rather just ‘get on with it’. A poll that was run through my website found that 75% of participants believe you don’t need a degree to be successful.

In certain sectors you can be better off not going to university – both financially and in terms of career progression. A great example is in accounting, where you can either go to university and rack up an average of £15,000-worth of debt before progressing to chartered accountant status, or learn on the job through the AAT (Association of Accounting Technicians) scheme and reaching the same level with no debt and earn around £36,000 a year, the difference being about £50,000 and some useful work experience.

I prefer to promote the idea of lifelong learning. University isn’t just for school leavers; it’s for everyone. There are so many different ways to learn without getting into debt. Various employers offer funded degrees, which cancel out the prospect of debt and enable you to earn at the same time. The Open University offers another.

The Observer, 8 February 2009

• Has university paid dividends for you? Or is it a waste of money and time that might be better spent gaining more practical experience?