On results day 2014, a record 412,170 students had their place at a university or college confirmed.
Universities are no longer restricted in the number of students they accept. There may be practical constraints, but the government no longer imposes caps. If you’re good enough to study at university, somewhere is going to offer you a place. It may not be Cambridge – but does it really matter? Ultimately the university experience is about what you learn and who you meet. There are great people – both teachers and students – at every university. (There are not-so-great people at every university, too. Even Cambridge has some duff lecturers.) If you work hard and get involved, you’ll have a great time and you’ll graduate with a good degree. And – if you’ve planned it carefully – you’ll end up with a good job. If that’s what you want.
And don’t worry about the fees. Student loans are not loans. They are a graduate tax.
They’re not loans because they don’t come with any of the disadvantages of loans:
You only pay them back if you’re earning more than £21,000 a year. You pay 9% of the amount you earn over £21,000. So if you earn £22,000 you’ll pay back less than £100 a year. (And if you keep earning at that rate, you’ll pay back less than £3,000 in total no matter how much you borrowed.)
If you take a year-off after university and don’t earn much money, you’ll pay back nothing that year. If you take a career break, perhaps to have children, and don’t earn much money, you’ll pay back nothing until you return to work and start earning above £21,000.
Student loans don’t count as a debt in your credit record. After 30 years – admittedly a long time – if you haven’t paid them off, you don’t have to: whatever’s left is written off. Around 50% of students will never have to pay off their total student loan.
Although interest is added to what you owe, the rate is vastly lower than you’d get with a commercial loan.
If you get a good graduate job after you graduate, you’ll pay around 3% to 6% of your total salary. There are conflicting figures about what kind of salary you can expect and there are big variations depending what kind of job you end up doing. At the lower end, if you earn £18,000 a year, you’ll pay nothing. At the higher end, if you get a job as a trainee manager with Aldi on £42,000 a year, you’ll pay back roughly £160 a month, leaving you with a whopping £2,400 after income tax and national insurance contributions. Plus you get an Audi A4. I think you’ll manage.
It’s really not that big a deal. Especially when you consider how much more graduates earn over their lifetimes compared with people who don’t have degrees. Research published in 2013 showed that men earn around £168,000 more over their lifetimes (and that’s after student loan repayments). Women earn around £252,000 more.
On the subject of money, just how rich do you want to be?