Are degrees worth the paper they're printed on?

Once, a university education was a passport to a brighter future, a better-paid career, a life of privilege. But after a decade and a half of massive expansion in our higher education system, the 'gold standard' qualification is losing its lustre. Is it time for a rethink?

By Esther Walker
Sunday 23 October 2011 04:23

University has never been more popular. This month, record numbers of people will be attending freshers' weeks, with figures up 9.1 per cent on last year, according to Ucas. Indeed, this summer, nearly half a million final-year university students received their degree results. But the sound of popping champagne corks will have been muted by the grim reality of what a degree from a British university is worth today. The time when a degree entitled you to a better job and higher social status have long gone.

A report by Kent University published last week found that one third of graduates from the class of 2003 earn no extra money as a result of their qualification. The degree classification system has been called "rotten", the Student Loans Company has been described as "incompetent", and graduate salaries rose last year by only 1.8 per cent – the smallest increase in years – while the new £3,000-per-year tuition fees mean than some middle-income students will finish with debts of £30,000.

All in all, the class of 2008 would be forgiven for feeling pretty depressed.

So what happened? The British university system has historically been the envy of the world. How has it sunk so low?

Some point the finger at John Major. Shortly after he became Prime Minister, he sent a note round the Department of Education: Major wanted suggestions for a policy that would be both popular and cheap. The department responded with the suggestion that the binary divide between universities and polytechnics could be removed. There would no longer be universities and polytechnics, only universities and new universities. John Major did not have a degree; he left school at 16 with three O-levels – in History, English Language and English Literature. He had no snobberies about higher education, and thought the policy sounded good: it was cheap, it was inclusive.

And so, in 1992, Parliament passed the Further and Higher Education Acts, which allowed polytechnics to become universities.

Then the Labour Government, under Tony Blair, seized on this theme of widening access to higher education and, in the 1999 manifesto, pledged that by 2010, 50 per cent of under-30s would have gone through higher education.

Professor Geoffrey Alderman, the academic formerly in charge of standards at University of London, believes that the consequence of high government access targets is the devaluation of the degree.

"Personally, I think the idea of giving 50 per cent of 18 to 30-year-olds a higher education experience is wonderful, but it was electioneering. The way that this target is going to be achieved is by encouraging more Further Education colleges to apply for university status. The end result will be that the government can say that it has all these people who have gone to something called a university and have something called a degree. But no one will be fooled."

The problem, he adds, has been made worse by grade inflation. "As with all commodities, the more of them there are, the less value people put on it. A university that gives out a lot of Firsts and Upper Seconds might initially find they attract a lot of students, but in the long term, employers aren't going to be very interested in your qualification if it's from a certain type of university, one that is known to award a lot of Firsts and Upper Seconds. The quality of the degree will be perceived to be low."

Indeed, Bob Burgess, the vice-chancellor of Leicester University, recommended last year that all students be given a transcript of their marks, to help employers assess their achievement more than by degree class alone. Most London-based barrister chambers also now ask to see finals transcripts as a matter of course, as they see so many applicants with Firsts.

Perhaps the cruellest aspect of channelling more people into higher education is that it is the students with least privileged backgrounds (who might benefit the most from the social mobility of having a degree) who suffer. Of the third of graduates whose degree made no difference to their starting salary, most were from polytechnics or other new universities, where drop-out rates are also higher.

At London Metropolitan, London South Bank, Middlesex and Thames Valley universities, just over a quarter of students fail to complete their degree. This year, half of the student body at Bolton University dropped out, up on 43 per cent the previous year. Twenty per cent of graduates from a new university say they would rather not have gone to university, which is an increase of 5 per cent in two years.

And even students at the Russell Group of universities (which includes Oxford, Cambridge, Imperial and Edinburgh) are dissatisfied. One in five thinks they chose the wrong degree course and one in 10 thinks they should have chosen a different university altogether.

"All universities are striving to hit targets," says a senior lecturer in a British university, who did not want to be named. "The government sets targets and universities are judged not just by their academic output but by their ability to hit targets. If you can hit your target, you can get more money. So the more students you attract, the more money you get. Universities have an in-built incentive to maximise their numbers. Sometimes quality falls by the wayside.

"Universities were originally conceived to deal with those who had an enquiring mind; those who wanted university to extend them intellectually. The modern university is much more of a hothouse; a lot are just churning people through their degrees.

"The drop-out rates come when people who are ill-prepared and ill-suited for university life are encouraged to go, and then find the whole experience expensive and disappointing."

The policy of driving people hard towards higher education makes those who do not achieve it feel like losers, despite the fact that university might not be the right place for them.

And the financial debt from university is turning from an inconvenience into a considerable burden that many bear well into their thirties.

After the Second World War, local education authorities began to pay for students to go to university. The Education Act of 1962 awarded maintenance grants to students in most full-time courses. A student at Oxford in the mid-Fifties, for example, could expect a grant of £350 a year, excluding scholarships or army commissions, which enabled a comfortable standard of living and would feel, in today's prices, like about £12,000 per year.

But in the 20 years to 1996, the student population more than doubled. There are now more than twice as many 25 year olds with degrees than there were 18-year-olds with A-levels 40 years ago. The expansion was so rapid that, by 1997, British universities were in trouble. Government policies swung from reducing the student intake to increasing it, but funding didn't increase, and was even reduced. In some places, the amount that universities had to spend on teaching had halved.

Sir Ronald Dearing, the then chairman of the School Curriculum and Assessment Authority, was commissioned to write a report on the state of higher education. He concluded that the free provision of higher education should end. Maintenance grants were scrapped and students were charged £1,000 per term for tuition fees. From 2006, students were expected to pay just over £3,000 per year. British students can expect to graduate, on average, £17,500 in the red. And the Student Loans Company, which arranges and collects student loans, was recently accused of incompetence when they continued deducting money from graduates' salaries even after their debt had been repaid.

The new fees have hit the middle classes the hardest. Last year, the National Union of Students said middle-class students, who are ineligible for means-tested grants and bursaries, leave university so heavily in debt that they still felt the pinch into their mid-twenties and thirties, and were forced to put off buying a house or starting a family. About 80 per cent of students preparing for university said they would be looking for paid work to support themselves while they studied.

A recent survey from Norwich Union showed that a fifth of parents are raiding their retirement funds in order to pay tuition fees. The poll of parents showed that 11 per cent think that they will only be able to support one of their children through university, while 30 per cent think they won't be able to make any contribution at all.

Higher student debt is also bad for society, explains Wes Streeting, the president of the National Union of Students. "Student debt is putting pressure on students to get very high-paid jobs when they graduate," he says. "It's important that students are able to do the jobs that they want and they're put off from going for jobs in the charity and public sector because they don't pay enough.

"When it designed the top-up fee model, the Government originally wanted graduates who went on to earn more to pay more, but that's not now the case – everyone pays the same, from nurses to management consultants. We'd like to see graduates who go on to earn more to give more back. If that happens, then we might not see so many people put off going for jobs in the public and charity sector."

And the credit crunch will make things even harder. High-street banks have stopped offering students juicy incentives to sign up for new accounts; last year, banks were offering iPods to new customers, but now offers are more modest, such as free travel insurance or a national railcard. Interest rates on cash withdrawals made using credit cards are also creeping up; the average rate charged has risen, in some cases, to more than 25 per cent. Graduates are starting to rule out the possibility of getting work in London: in a year, the number of students looking for work in London has dropped from 71 per cent to 60 per cent and the number of graduates ruling out a career in London rose from 28 per cent to 34 per cent.

It remains to be seen whether any of this will make any difference to the number of school-leavers who apply to university. The increase in student fees resulted in a dip, but it was only temporary. Applications have now gone up by 9.1 per cent, according to Ucas. But, in the long term, to 2027, there is a projected fall in student numbers: – 4.8 per cent in England, 8.5 per cent in Wales and 10.9 per cent in Scotland.

"We are approaching a system that crudely copies the American system of further education," adds Professor Alderman. "But we are getting there by accident and I would rather see it planned."

Success stories: who needs a degree?

Sir Philip Green

Sir Philip Green was born in Croydon, south London in 1952. When he was 12 his father died of a heart attack, and he helped his mother look after the family business of electrical goods and property. Sir Philip left school at 16 with no qualifications. His first job in 1968 was selling imported shoes, before he took over the family business at the age of 21. He began buying and selling clothes, and made his first million at 33. He made his fortune by buying the ailing business BHS for £200m in 2000, which he subsequently turned round. It is now worth more than £1bn. He pulled off the same trick in an £850m takeover of the Arcadia group, which includes Dorothy Perkins, Miss Selfridge and Topshop, in 2002. He is estimated to be worth £4.3bn.

Sir David and Sir Frederick Barclay

Sir David and Sir Frederick were born 10 minutes apart in 1934 to Scottish parents in west London. They left school at 16 to first work in the accounts department of General Electric. Later, they left to start up a painting and decorating business. By 1962 they were refurbishing boarding houses and turning them into hotels. In 1975 they had made enough money to buy the Howard Hotel in London, which overlooks the Thames. In 1980, they bought Ellerman Group, a container business, for £45m and then sold off the brewing division for £240m, while retaining the shipping arm of the business. They now own the Ritz hotel in London, the Littlewoods catalogue-shopping chain and The Telegraph Group of newspapers, which includes The Spectator. They are estimated to be worth approximately £1.7bn.

Sir Richard Branson

Richard Branson first showed a flair for business at 16 when he published a student magazine and sold 50,000 copies of the first issue. The following year he set up a charity for young people, the Student Advisory Centre. In 1970, he set up Virgin records in the form of a discount record mail-order venture. A year later Virgin's first record shop opened in Oxford Street. In 1972 Branson launched the Virgin Records label – a year later releasing 'Tubular Bells' by Mike Oldfield. The record stayed in the UK music charts for 247 weeks, and the label next signed Genesis, the Sex Pistols and the Rolling Stones. Virgin Music Group was sold to Thorn EMI in 1992 in a $1bn deal. Branson formed the airline Virgin Atlantic in 1984, launched Virgin Trains in 1997, Virgin Mobile in 1999 and the airline Virgin Blue in Australia in 2000. His new venture, Virgin Galactic, will take paying passengers into sub-orbital space. He is estimated to be worth £2.7bn.

Katie Price

Born in Brighton in May 1978, Katie Price, aka Jordan, began her career in 1996, aged 18, when she was a Page 3 model for The Sun newspaper. She soon became one of the most recognisable figures in the UK and on the international glamour model circuit, appearing in Playboy in 1997. Her status was enhanced further when she appeared on ITV's I'm a Celebrity, Get Me Out of Here, and went on to marry fellow contestant Peter Andre. She has established herself as a one-woman brand, with a range of lingerie, jewellery and perfume, and she has also produced a number of autobiographies, novels and children's books. She currently has a fortune of approximately £30m.

Ann Heron Gloag, OBE

Ann Gloag trained as a nurse before setting up the Stagecoach bus company with her brother, Brian Souter, when she was 19. Stagecoach has become one of the most successful transport companies in the UK, where it runs South West Trains and East Midland Trains as well as 7,000 buses across the country. It also has a presence in seven other countries, including the US. She and her brother have an estimated worth of £1.3bn and she owns Beaufort Castle in northern Scotland. She stepped down from her role as executive director in May 2000, shortly after her son committed suicide.

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