Is a degree worth the money?

Graduates throwing mortarboards

Last month, official figures revealed that the average fee at UK universities will hit £8,700 next year, bringing the cost of a three-year degree to over £26,000.

According to the Office For Fair Access (OFFA), three quarters of universities are now charging the maximum £9,000 per year for at least one course. And that figure could rise even further: earlier this month former education secretary David Willets said he had been in talks with Oxford and Cambridge about the possibility of allowing them to increase their fees to as much as £16,000 per year."There is a long standing issue with Oxbridge, because their distinctive high model means that the £9,000 does not cover all their costs," he told the Sunday Times.

For those without wealthy parents, these are terrifying figures, leaving most graduates many tens of thousands of pounds in debt as they embark upon their careers.

However, a new report from jobs site Adzuna indicates that it all should be worth it in the end. The average graduate can expect to earn up to £15,000 more per year than a non-graduate - adding up to a whopping £500,000 over their working life.

Over the last two years, employers have become less fussy about candidates' final degree class, with the number demanding a first having fallen by 80%.

"In June 2014, Adzuna data shows graduate salaries turning a corner, with the highest year on year salary increase (5%) of any sector in the UK," says Andrew Hunter, co-founder of Adzuna. "And the good news for graduates doesn't stop there, as employers increasingly open up top jobs to candidates with the right attitude, regardless of their final degree classification."

However, competition is steep. The figures show that in June there were nearly 250,000 graduates fighting it out for just 54,200 jobs across the UK. In London, indeed, there are more than 30 people competing for every graduate job. And a report late last year from the Office for National Statistics showed that nearly half of recent graduates were working in non-graduate jobs.

So is a degree always worth the money?

Leaving aside arguments about the intrinsic value of education, it appears that the answer depends on where you live and your chosen career. As we've seen, London has the highest competition for graduate positions, but also has the most such jobs - nearly 50% of the UK total - and the highest average graduate salary, at £28,000.

But Eastern England has high rates of pay too, boosted by booming science and technology businesses in Cambridge. Indeed, here and in Aberdeen, advertised vacancies for the newly-qualified offer average pay of as much as £42,000. At the other end of the scale, the worst paying cities for graduate jobs include Sunderland and Hull - where graduates should expect to actually earn less than the national average pay rate.

For the best financial return on their degree, says Adzuna, young people should opt for courses in engineering, computer science and maths, which deliver average salaries of between £40,000 and £45,000. However, a degree in hospitality and tourism is a substantially worse investment, with an average salary of just £18,000.

For those who wish to take a degree but are worried about the cost, there is a certain amount of financial help available. Government grants of up to £3,387 are available for those with household incomes of £25,000 or less. Students may also be eligible for income support. Meanwhile, disabled students, those with dependent children or adults and those who have been in local authority care can apply for extra help.

Through the National Scholarship Programme, students from households with an income of under £25,000 can apply for a bursary of up to £1,000, help with tuition fees and accommodation costs and a free foundation year.

Individual universities, too, offer financial help to disadvantaged students - although each has its own rules on who qualifies and each offers a different amount.

And it's worth remembering that the highest-paying jobs aren't all reserved for graduates. The non-graduate pay list is topped by mining construction, where the average salary is £69,578 - nearly three times the average UK salary. Equity trading, commodity trading and offshore oil platform work also rank highly, with average pay of up to £63,000.

Recognising this, ambitious young people are increasingly turning to alternatives to university such as degree-level apprenticeships - where they are paid instead of having to pay.

Recent research carried out for the Sutton Trust in partnership with Pearson shows that 34% of people believe that a degree-level apprenticeship is better for somebody's future career prospects than a university degree, compared with 21% who think a traditional degree would be more useful.

However, given that student loans don't need to be repaid until a graduate is earning £21,000 a year, going to university still looks like a cost-effective move for most. As Adzuna concludes: "Though university fees remain high, our data suggests that for many, degrees are still worth the cost."

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