Are degrees in the UK value for money?

GreatApe

michaels wrote: »

I think this is a good point. Perhaps universities and courses that can be shown over 5 years to lead to negligible payback of courses should lose their ability to get funding? Indeed perhaps the way to go is for the universities to get the 'loan payments' of their graduates then that puts the onus on them to make sure their courses are of value. There could be a block subsidy from the govt for each degree depending on its perceived social value and then the remainder of the unis income would need to come from the loan repayments of the graduates.

I will do a few examples later but the net effect is that the govt picks up the tab for the benefit to society of for example a nursing or social work qualification but the uni takes on the risk that its graduates do not earn a premium over those without a degree and thus has every incentive to give courses that are either socially useful or give good individual returns.

The problem is, there is no real way to increase the income of very large groups of people.

If you train a doctor they will earn a lot more than the average person, if we train half of the population to be doctors 99.5% of these doctors would not be able to be doctors (we only need about 0.25% of the population as doctors) and would as a group revert back to the average income irrespective of how qualified they were

If the universities were funded by the repayments of their students and the repayments were set at a level to be earning above the average then the university sector would be screwed and would contract 75%. There are too many VI for that to happen. Its the same problem as state owned utilities of mining. Once the scale is large enough that making changes upsets these large groups then its difficult to make changes as it costs too many votes

I would go back to my suggestion. Just give all 18 year olds £30k which they can use for an education or for a deposit on a house or keep it in a word stock tracker. With choice the kids would see more value in buying a house or having a pension. That way the university sector wont cry murder its upto the kids to choose and if they dont choose university then the university industry wont be able to blame the government.

michaels

GreatApe wrote: »

The problem is, there is no real way to increase the income of very large groups of people.

If you train a doctor they will earn a lot more than the average person, if we train half of the population to be doctors 99.5% of these doctors would not be able to be doctors (we only need about 0.25% of the population as doctors) and would as a group revert back to the average income irrespective of how qualified they were

If the universities were funded by the repayments of their students and the repayments were set at a level to be earning above the average then the university sector would be screwed and would contract 75%. There are too many VI for that to happen. Its the same problem as state owned utilities of mining. Once the scale is large enough that making changes upsets these large groups then its difficult to make changes as it costs too many votes

I would go back to my suggestion. Just give all 18 year olds £30k which they can use for an education or for a deposit on a house or keep it in a word stock tracker. With choice the kids would see more value in buying a house or having a pension. That way the university sector wont cry murder its upto the kids to choose and if they dont choose university then the university industry wont be able to blame the government.

But my idea is slightly more subtle in that some qualifications such a nursing we may think has a value to society which is not reflected in their earnings and that for these courses the govt would make a payment to the uni to reflect the fact that the course has value but the graduates won't pay that much extra 'loan repayments'.

The change could then be brought in gradually so universities have time to adjust their course offering to reflect their value - perhaps offering shorter courses so that less money needs to be recouped or courses with part payment coming directly from the student up front so they or their parents can choose to self fund if the economics of the course don't make sense for a uni to offer it.

GreatApe

There are also scammers in the system which add costs to the taxpayer and these need to stop or be punished somehow

I met a man not long ago who seemed to be working the system. I think he looked around late 40s.
Somehow he managed to get into a university and they gave him his grants and I assume the university also got their £9250 tuition from the state. He didn't go to any of the lectures or studies he just pocketed the grants and continued working his low paid job. He seemed very pleased with himself. Fortunately last I heard he got kicked out of the university but it still would have cost £15-20k.
Maybe it was better that he was a dishonest person, if he actually tried and attended he may have been able to drag it out to 4 years and the best part of £80k all for no additional benefit to him or society. A right del boy he even claimed he had a side business where he had people from india do assignments for university kids in this country a type of middle man. I said he was pulling my leg and I didnt believe it to which he pulled out his phone and proceeded to show me dozens of wattsapp messages between himself/uk-students and the indian students doing the uk-students assignments. What a system we have!

Although I am quite anti higher education, If a lazy kid who was unable to get work asked my advise I would advise them to go to university. At least they would be 4 years closer to retirement! and it wouldn't cost them a penny and living off of grants is probably better for them than getting mixed up in drugs or gangs.

GreatApe

michaels wrote: »

But my idea is slightly more subtle in that some qualifications such a nursing we may think has a value to society which is not reflected in their earnings

Earnings are mostly to do with supply and demand there is no need to try and impose a moral value or worth onto jobs if for no other reason than the fact that it is a subjective judgement

I would say nursing is one of the subjects that really shouldn't need a degree. Most degrees most parts are surplus to requirement just train the nurses on the job in hospitals. You could even perhaps hire them at below minimum wage while training. That might sound bad but while at university they are effectively being paid a negative value wage so its a lot better than that.

If you take tuition of £9250 + upto £10,702 in living loans you get a cost to the state of £22k a year or £66k + interest over 3 years to train up a nurse

In what way does it make sense to pay someone £22k a year to study nursing when you could just pay them £22k a year to start on the job working 50 hour weeks. Would help solve some of the NHS problems too. I think almost all jobs can be learnt by just shadowing someone and its a good quick efficient way to train someone too that way they only need to learn what they need to learn rather than in a degree where 90% of it will never come up in real life.

NineDeuce

economic wrote: »

you cant compare that to a degree.

Err why not?

GreatApe

https://www.youtube.com/watch?v=IvBlOFU3ry8


A good watch

'If the only thing you know about a person is that they have a degree, you know nothing about that person'

Andy_L

GreatApe wrote: »

Most degrees most parts are surplus to requirement just train the nurses on the job in hospitals. You could even perhaps hire them at below minimum wage while training. That might sound bad but while at university they are effectively being paid a negative value wage so its a lot better than that.

A nursing degree is already a 50/50ish split of practical on-the-job training & academic work.

economic

NineDeuce wrote: »

Err why not?

see post 557 and you will see why.

NineDeuce

economic wrote: »

see post 557 and you will see why.

Oh yes, the 'I cant answer that so will say go and read' response.

£9.5k for whole year vs £2k for a week. I hope that makes things crystal clear....

adindas

GreatApe wrote: »

Put that £100,000 into stocks or a house returning a real 5% annually over a 48 year period (assuming the retirement age of 70) and you have in todays money £1.04 million.
That is the cost of an education £1.04 million

In the majority of cases peoples lifetime earnings from a higher education wont surpass this £1.04 million

There is a serious problem with your assumption.
If you put £100,000 today into stock market in today money before the end of the day it is still £100,000, is not it ??

I believe you are talking about future in 48 years time.
You get the result of £1.04 million (or whatever) based on 5% in 48 years time. It might be misleading for people who do not understand about inflation the value of future money in today money equivalent.

Supposed the RPI was 5% than the purchasing power of the money of £1.04 million in 48yrs time is still equivalent £100,000 today. I am aware that RPI is about 3.5% but just do not bother to calculate it as the figure is definitely misleading for people who do not understand about the inflation and stock market.

Also keep in mind that there is no guarantee you will get an average return of 5%. I lost about 20% of the value of my share when I had to sell it as I needed money due to unforeseen circumstances. I fully believe reasonable number of people also lost money in the stock market.

For the youngster who do not even know the subject to read at uni they might loose all of the mosey invested in the stock market. The money might loose in the dodgy pump and dump scheme in the stock market thinking they could become a sudden millionaire by investing in share from the money they get from their dad.

If they are too dumb to choose which subject to read at university which will have a much greater chance to make them better in the future, how could you expect them to make money in the stock market. They might end up using it for day trading, spread betting, swing trading in the stock market. Worse they might just spend it for partying, drinking, getting drunk, gambling,

Education is the best gift you could give to your children, just do not let them choose they subject just because they fancy it, they like, it is easy to get. If this is what they wanted ask them to earn something and pay by themselves.
How much money they will make in 48 years time if after becoming a dentist they earn 50k equal to £4167 pm in today money (say) and keep increasing due to promotion and salary inflation adjustment ??

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

Based on this calculator solely based on 3.5% (inflation adjustment of salary),50k (£4167 pm) compounded monthly, I got £6,509,195.26 in 48 years time. I have not included they might be getting a promotion doubling their salary during their career.

This is also the video from Billionaire Peter Thiel together with Charles Murray. While they mention that higher education is a disaster they still give the exception for the subject like Math, Science, Engineering. I fully believe they just forget to mention the subject like Medicine or dentistry

https://www.youtube.com/watch?v=IvBlOFU3ry8