Are degrees in the UK value for money?

Lingua

Cakeguts wrote: »

Entry to technical college would be at 16 and the course would run for 2 years but all year without the long holidays. The holidays would be like what you get when you are at work. Polytechnic courses would be the same so no semesters and years ending in May.

For which you’d have to find funding, although I do support a similar move.

Cakeguts wrote: »

There would be 1st class degree awards only for exceptional students.

So what we have now.

GreatApe wrote: »

£60k is the cost of the tuition and other living loans
~£100k is the lost earnings from age 16-21 if you decide to study rather than work

You have to study until 18, and good luck finding an apprenticeship paying £20k/yr.

economic wrote: »

If you don't understand that then you need to go back to key stage 2 mathematics.

starting salary = £20k
21-16 = 5
20k * 5 = £100k

Do you understand the maths behind the above?

Interestingly, you use a very simple maths formula above to calculate gross wages without including wage increases, yet earlier you apply a 5% increase to account for wage increases. Which would you prefer to use?

economic wrote: »

I voted for brexit. I am hoping for a HARD brexit as i think this will be very good thing for the UK long term.

If we do get a hard brexit, then we would not provide student loans to EU students to study in the uk. I think already about 15% of all university students are from the EU (excl UK). This number will be sure to drop following a hard brexit due to no more funding. Would this help cut out the useless degree courses in the uk? How many EU students attend the good course/unis vs the bad ones?

How much of the research funding the EU provides us goes to each of the universities? Once this shuts off, how will the poor universities survive without the research money?

Yes, I already provided you with the figures (and the reference). The number might drop, but the number of UK students going to the EU will drop too, so you’d have to explore whether one number is greater than the other. Might be worth you doing some research.

I would imagine that EU students are, on average, more likely to study the more ‘robust’ courses. I can’t find any evidence to support that, so it’s just a supposition.

GreatApe wrote: »

See my above post with data for full time median male wages for 16-17 year olds and 18-21 year olds.

You get a figure of close to £90k lost earnings for a three year course or £114k lost earnings for a 4 year course. Plus of course the tuition fees and living loans of roughly £60-£80k

You are looking at close to £200k in lost earnings and loans for a kid that does a masters (or just needs to repeat one year of their undergrad degree) compared to a kid that stays at gone and just gets a full time job.

That nearly £200k will also give them an annual 5% return (eg if they buy a house and thus don't need to pay rent) so not only are they nearly £200k better off but they also have a £10k per year advantage from that point on vs their the n who just enters the workforce age 22

You’re mixing separate things again. Income is not the same as a loan! Maybe for you because you suggest giving £60k to every 18 year-old. Of course, that would contradict your discussion of an annual return, seeing as the government would be foolish to give money to 18 year-olds to invest, rather than creating its own sovereign wealth fund.

A graduate might not earn as much while they’re studying, but they’ll (on average) go on to earn more than the non-graduate, eventually removing that early lead.

Also, where does the £90k in lost earnings come from? Earlier you stated £19’800 per year, or a maximum of £59’300. That’s a £30’000 difference in your own figures.

Also don’t forget that loans are tax-free, but income is not. MSE’s income tax calculator shows that for a worker earning £19’800, they will take home £16’745. Deduct rent, bills, transport, food, etc., and I fail to see how they’re much better off than a student? Maintenance loan is currently £8200/yr, and most of that goes on the same things a worker will pay, i.e. rent/bills/food. At most, the worker is about £8000 ‘better off’, except at the end of the three years one individual has a degree and the other does not.

Student loan repayments don’t come into the picture because they are only repayable at 9% over £25’000, which makes them a negligible figure. It doesn’t matter if students owe £1000 or £1’000’000, the amount they repay is the same.

Essentially, the maintenance loan you receive at university is what should be considered your 'net income'. Ignore tuition fees because you never see them except for on a computer screen. Yes you do pay the loan back, but at the negligible rate I mention above. University, at least for the individual, is a guaranteed income of £8'200/yr for up to four years. Whether or not that's value for money for the taxpayer is still a debate you seem determined to have

economic

Lingua wrote: »

Yes, I already provided you with the figures (and the reference). The number might drop, but the number of UK students going to the EU will drop too, so you’d have to explore whether one number is greater than the other. Might be worth you doing some research.

I would imagine that EU students are, on average, more likely to study the more ‘robust’ courses. I can’t find any evidence to support that, so it’s just a supposition.

By far most cases UK students can not get uk taxpayer funded loans to study abroad even in the EU. So its largely irrelevant to the discussion.

economic

Lingua wrote: »

Except school leaving age is 18, and even if you get an apprenticeship for the last two years, they aren’t paid anywhere near enough to manage even £19’000/yr.

you are missing my point entirely. Its not about the present case. Of course non grads are going to earn less, if most new workers are going to be grads - companies will want to hire grads simply because they are grads.

If you have 5% grads and the rest entering the workforce at age 16-18 you will find the median starting wage is similar to the median wages of just the 16-18 yr olds entering the workforce without a degree.

The above explains a lot of your replies back to me and GreatApe. you are getting very confused my dear.

Windofchange

Lingua you have hit the nail on the head with all your observations. A new day, a new figure from the ape - apparently now university students lose £200k (what was it a page ago?), but we seem to be back down to giving away £60k only to all the 18 year olds at least. Attach 5% here, a 15% no chav 'premium' there, oh look, that fits my argument nicely. It's mind numbing isn't it?

Cakeguts seems to have exploded with indignation and outrage about all the stupid people in the country - oh the irony with that one...

Economic, well, he started off well actually questioning Great Ape's lunacy, but we seem to have slipped back into insults and poorly constructed sentences.

Good luck to you sir - you are quite clearly involved in education I would say, and at the coal face as it were, probably best placed to add useful input. You have also taken your time to provide evidence and figures to back up what you are saying. You have unfortunately stumbled across a corner of the internet where outrage and guesswork are the main currency.

economic

Lingua wrote: »

Interestingly, you use a very simple maths formula above to calculate gross wages without including wage increases, yet earlier you apply a 5% increase to account for wage increases. Which would you prefer to use?

The "simple maths formula" is conservative assuming no wage inflation over the 5 year period, that shows clearly the 100k of wages over the 5 year period for non grads. The 5% is another scenario less conservative. do you know what scenario mean?

GreatApe

Lingua wrote: »

Any reason that you applied a “15% premium”? It just seems a number conjured from mid-air. Please provide statistical reasoning for the figure.

Yes indeed it was just a guess, but looking at the data it looks like a jump from the 50th percentile to the 60th percentile is a 16.6% jump in earnings and a jump from the 50th percentile to the 75th percentile is a 50.8% jump in earnings.

So 15% is conservative

Even doing that, you’re applying a subjective theory (without evidence!) to then reinforce your point. It has no standing. You yourself said that universities are letting everyone in – so if that is the case, how can they be on average smarter? You’re contradicting your own argument.

My argument was that we are sending too many kids to higher education and the numbers could be cut by 80%. The marginal graduate now only has an IQ of 100 not the average the marginal. Do you get it?

Being smart doesn’t guarantee you a good wage.

Sure but on average it helps

Some students also work part-time while at uni – have you factored this into your maths? What about students who do a year in industry and receive a salary? What about students who study part-time and continue with their usual jobs?

Lets stick to the majority before we try and fix the minority cases

You’re comparing apples and oranges. Earnings are not the same as debt. Could the student have feasibly spent their loan on a car? A portion of the maintenance loan, perhaps, but then they’d have nowhere to leave (except perhaps the car …). They can’t spend the loan as they would earnings. Moreover, those loans aren’t intended to be paid back as a normal loan – that’s why the repayment threshold is so high. It’s designed as a graduate tax!

There is no free lunch someone pays and the shift to the burden of marginal degrees to the taxpayer is even more of a reason to oppose this wasted time and money.

Good luck getting away with that one. Who would employ somebody with no experience and only GCSEs?

School leaving age should be 16 maybe
Plenty of people would employ 16 year olds with only GCSE
I would rather employ a hard working 16 year old with good GCSE grades than employ a 21 year old with crap GCSE grades but a degree in some nonsense

GreatApe

Lingua wrote: »

A graduate might not earn as much while they’re studying, but they’ll (on average) go on to earn more than the non-graduate, eventually removing that early lead.

Can you prove this to be the case and I would like to see the raw data not some analysis by media studies graduates.

Grads in non grad roles should not count as grads. I earn a lot and my income should be classed as non grad income because I do not do any grad work at all. I do have a degree but I did not benefit from it I was mostly self taught as a guess I did not go to 90% of lectures or tutorials

Likewise say a very rich parent sends their kid to a university and the parent dies a few years later leaving the kid £100 million. That kid will have £5 million annual income just from investment returns he could just spend all day playing computer games and not even work. Of course that should not count as graduate income

Give me the raw data and lets see if universities add any real value.
I suspect not a lot and I suspect for marginal graduates even less so

Also don’t forget that loans are tax-free, but income is not. MSE’s income tax calculator shows that for a worker earning £19’800, they will take home £16’745. Deduct rent, bills, transport, food, etc., and I fail to see how they’re much better off than a student? Maintenance loan is currently £8200/yr, and most of that goes on the same things a worker will pay, i.e. rent/bills/food. At most, the worker is about £8000 ‘better off’, except at the end of the three years one individual has a degree and the other does not.

Well yes they will pay taxes which is great for the country we can hire more doctors or cut the deficit

A 18-21 year old kid is more likely to stay living at home or at least have that option than if they go to a university on the other side of the country.

Yes if they want to live away from home age 18-21 they would have living costs similar to students. Actual perhaps less as student areas tend to be a little more expensive and places like central london are overweight universities

Student loan repayments don’t come into the picture because they are only repayable at 9% over £25’000, which makes them a negligible figure. It doesn’t matter if students owe £1000 or £1’000’000, the amount they repay is the same.

It doesnt make it ok that they themselves default on the loans and we as a country pick up the tab via higher taxes and lower services

Essentially, the maintenance loan you receive at university is what should be considered your 'net income'. Ignore tuition fees because you never see them except for on a computer screen. Yes you do pay the loan back, but at the negligible rate I mention above. University, at least for the individual, is a guaranteed income of £8'200/yr for up to four years. Whether or not that's value for money for the taxpayer is still a debate you seem determined to have

About half the kids do pay it back in full and the half that do not pay back some of it

economic

GreatApe wrote: »

I would rather employ a hard working 16 year old with good GCSE grades than employ a 21 year old with crap GCSE grades but a degree in some nonsense

Very true and funny at the same time.

economic

GreatApe wrote: »

My argument was that we are sending too many kids to higher education and the numbers could be cut by 80%. The marginal graduate now only has an IQ of 100 not the average the marginal. Do you get it?

I think you should explain the concept of marginal vs average graduate as i doubt most people on this thread gets it. They may pretend to do though.

GunJack

economic wrote: »

If you don't understand that then you need to go back to key stage 2 mathematics.

starting salary = £20k
21-16 = 5
20k * 5 = £100k

Do you understand the maths behind the above?

The maths I get, it's the logic that's flawed....


Current rates
These rates are for the National Living Wage and the National Minimum Wage. The rates change every April.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2017 £7.50 £7.05 £5.60 £4.05 £3.50

So, roughly,

16-18 = £8k p.a.
18-20 = £10.5k p.a.
21 = £14k pa.

So your typical 16-y-o school-leaver will earn around £53k gross in 5 yrs.. not only does this blow your's and ape#s arguments out of the water, it also blows his "an 18-y-o worker can save £8k or whatever it was a year" argument about buying a house...

Like I said, you aren't living in the real world...