Focus: Kerry will spend four years and more than £20,000 getting a degree. Is she wasting her time and money?

University has never been more popular, yet student debt is soaring and the financial value of a degree has started to decline. We asked an expert why anyone should bother

Going to University College, Oxford to read politics, philosophy and economics

Age: 18. From: north London

A-levels: Maths (A); Physics (A); Psychology (A); Arabic (A)

Likely professions: law, banking, diplomatic

Cost of degree: £16,000. (Will live at home, receives full grant for living expenses.)

Estimated earning power: £100,000 or more

He says: I'm good at maths, so economics is a good option for me. I'm also keen on politics. I work for a group analysing the media coverage of Iraq and debating its politics.

I chose PPE because it's such a broad subject and gives me the option to move into anything I like. Maybe I'll end up doing law, but it's still early days. I'm doing it mainly for that sense of achievement.

I've received a full grant for my first year, have a £1,100 college bursary and am living with my mum, who's not working. If it goes well, I'd like to stay on and do a masters in politics or economics.

The expert verdict: Mousa's prospects look excellent. Not only do alumni from this course include many political heavyweights - notably William Hague, Ed Balls and David Cameron - but wage data shows that social science graduates and those from prestigious universities tend to have particularly high wages later in life.

Some commentators have argued that the additional earnings that graduates from particular courses and universities can expectjustify the introduction of tuition fees. The difficulty with this argument is that, as an academically able student, Mousa would probably do well at most places.

Distinguishing the higher earnings that result from good teaching from those driven by good students is very difficult. While there is some evidence that Mousa will do better by going to one of the prestigious "Russell Group" of institutions, this advantage is far smaller than we would think if we were simply to compare earnings of different graduates.

'It'll cost me less as I'll be living with my mum'
Kerry Capoverde

Going to the University of Central Lancashire to study event management

Age: 18. From: Disley, Cheshire

A-levels: English language (A), performance studies (A), dance (A)

Likely profession: management in the arts and entertainment

Cost of degree: £22,000 (will live at home during the four-year course)

Estimated earning power: Could reach £40,000 after several years

She says: I wasn't sure what I wanted to do, so chose a course that I thought would give me plenty of options. I don't have a particular career in mind, but I know I want to do something in the field of events and management. I had heard that university costs the average student £8,000 in their first year, but in my case it will be less because I don't have to pay for accommodation, as I'll be living with my mum.

I know I'll be in debt at the end of my degree. But I hope I'll be on £15,000 to £20,000 in my first year of earning.

The expert verdict: Kerry may be concerned about the prospects of graduates from the new universities. But, as was the case for Mousa at Oxford, the differences can be overstated. Indeed, even without adjusting for the "good student" effect, there is no evidence to suggest graduates of the former polytechnics have lower earnings than those who attend the majority of old universities (outside of the exclusive Russell Group).

However, it is true that employment prospects tend to be weaker for "new" university graduates. A recent survey of destinations showed that of the 27 universities where less than 60 per cent went directly into graduate jobs or further study, 20 were "new".

There is little economic evidence about earnings benefits associated with Kerry's degree, but she may be making a sound decision in not following the direction of her A-levels. Research shows that arts degrees tend to have the lowest returns among all the subject groups, and that for male arts graduates, earnings may be no higher than for those who complete their studies with A-levels.

'When my friends are in debt, I'll be on a good wage'
David Moore

Leaving after A-levels to do engineering NVQ level 2

Age: 18. From: Offerton, Stockport

A-levels: product design (C), geology (D), general studies (E)

Likely profession: engineering

Cost of training: nothing after the first nine months, when he receives a salary

Estimated earning power: up to £30,000 a year

He says: Training while being paid appealed to me because it would put me on my career path without having to get into debt at university. I did consider going to university, but after several talks with my careers adviser, I decided that it wasn't for me.

I think I learn better from practical training and wouldn't get enough out of university to make it worth the money. When my friends come out of university in debt, I'll be on a good wage with the opportunity to move up. The four-year course gives me the chance to gain a degree, so by not going to university I am not ruling myself out of higher education.

My training will enable me to operate and eventually programme CNC machinery, which cuts metal into specific shapes, widths and sizes. The idea of having a desk job or doing any other kind of office workdoesn't appeal to me. I'm an active person, and working with my hands will suit me much better.

The decision I've taken has never been about the money I earn. It's just about doing a job that I enjoy, that will take me outside and keep me occupied.

The expert verdict:

At first glance, David's decision doesn't make economic sense. Recent estimates of the value of a degree find that young male graduates earn around 30 per cent more an hour than those who only complete A-levels. However, these estimates may not be a good guide to the benefits of attending university for David.

Individuals who choose to continue with their studies after their A-levels and those who do not differ in many ways, and these will be reflected in the difference between their wages.

Another consideration is whether employers will go on paying large premiums as the number of graduates rises. Until recently, the premium has remained steady, but there has been a decline in the prospects of the most recent graduates. Earnings premiums appear to have fallen as the number of graduates has grown and it has become less likely that young people will get a graduate-level job on leaving university. David may be making a rational decision after all.

Interviews by: Lauren Veevers, Andrew Dagnell and Aline Nassif

... and what happened to our A-level hopefuls

Last week we interviewed three A-level students about their hopes for the future and the anxious wait for their results. On Thursday they finally got the most important grades of their lives so far. And this is how they got on.

Hilary Paice

What she wanted

The 18-year-old from Purley, Surrey, needed three Bs in biology, chemistry and geography to study midwifery at Southampton University.

What she got

Hilary just missed out, with grades of B,B,C - 20 marks adrift. Although she is ineligible for midwifery, Southampton gave her a place to study nursing.

"My results weren't quite as good as I thought, but every cloud has a silver lining," she says. "Nursing opens a lot more doors for me than midwifery, and I know that I'm really going to love it. My family and my teachers were really supportive."

Tessa Veevers

What she wanted

Tessa, from Disley, Cheshire, required three Cs in chemistry, maths and drama for a place at Sheffield Hallam University.

What she got

Despite her worries, the 18-year-old got grades of B, C and D, which means that she can start her course in business and human resource management next month.

"I'm really pleased that I have got into university. After all the waiting and tension, it's a relief," she says. "All this stuff in the media about A-levels being easier has really annoyed me. I just think that people these days are working harder to do better."

Jack Wellby

What he wanted

Jack, 18, needed straight-A grades in geography, religious studies and maths for a place to read geography at Jesus College, Oxford.

What he got

The hard work paid off. Jack, from Fulham in west London, got three As and starts at Oxford next term.

He says: "The grades were what I hoped for and worked towards - but despite that, I taught myself not to expect anything. And I had a nerve-racking wait. I had to have my results faxed to me because, when they came out, I was on holiday with friends in Dorset. Now I can celebrate. We'll be spending a lot of time in the pub."