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Education Costs and Benefits
Students usually consider whether courses are worth their while financially, in addition to the other benefits. In financial terms this involves calculating the funding that will be received and expenditure that will be incurred over the duration of the course.
The Costs
The costs of University include annual tuition fees and living costs over the duration of the course. While tuition fees vary depending upon nationality and level of study they are funded through a variety of means, such as loans, savings, financial awards (scholarships or bursaries) and sometimes part-time employment. The example below shows what a full-time undergraduate degree would cost for a UK student receiving Government funding.
Interest is charged on tuition fee and living cost loans from the date it is received by the student. Fees are usually subject to inflationary increases after the first year of study. For simplicity they are given as the same annual amount in the examples below.
E.g. 2012 entry - UK FT Undergraduate student starting 2012 (3 year degree with household Income £30,000)
Tuition Fees for 2012 entry will be £9,000.
From 2012 entry interest is charged at inflation + 3%. This example assumes static inflation @ 2% + the fixed 3% Government real rate of interest.
Tuition Fee Loan Debt £9,000 per year = £27,000
Living Cost Loan Debt = 3,750 x 3 = £11,250
Interest Year 1 = £12,750 x (2% + 3%) = £638 interest = Balance £13,388
Interest Year 2 = £13,388 + 12,750 = £26,138 x (2% + 3%) = Balance £27,445 (interest £1,307)
Interest Year 3 = £27,445 + 12,750 = £40,195 x (2% + 3%) = £42,205 interest = Balance £2,010
Total Interest = £3,955
Approximate amount that is repayable after graduation when earning above minimum new £21,000 threshold (this will rise in line with inflation from 2016) = £42,205
The Benefits
The value of a UK undergraduate qualification (graduate premium) has been estimated for UK students at between £120,000 and £260,000 - meaning it is a great return on educational investment. While this can vary according to where and what you study, there are also other reasons to do a degree:
- Graduates are 50% less likely to be unemployed than non-graduates.
- Whatever your dream job, your chances are likely to be improved if you have a degree or diploma from a University or college. relevant work experience is also important so visit CEEC for some ideas.
- If you want to work in some professions (such as law or medecine) you will have to have a relevant degree
- Your confidence and independance can grow and you can enjoy a great social life too.
If you are studying at postgraduate level, then your qualification helps you stand out from the graduate crowd and further enhances knowledge and skills in a chosen field.
