The Higher Education Statistics Agency (Hesa) has released troubling figures, collated by Vouchercloud, that reveals the current financial situation for people who have recently graduated from university. According to the agency, fewer than 28 per cent of recent graduates – the first group to have paid £9,000 tuition fees – have started paying back their loans.
This means that these students have not passed the earnings threshold, which is set at £21,000, for repaying their student loans.
As many of the graduates from mid-2015 are still unemployed, are working part-time, or are continuing their studies, fewer than 3 in 10 graduates in total are earning enough to repay their student loan.
Vouchercloud’s data also shows that the average salary for many sectors falls below the £21,000 payback threshold, as the average Philosophy, Languages, History and Media student earns well below the necessary amount.
As reported by The Independent, this news has come in the wake of recent Hesa data that has revealed that over 50,000 new graduates were in non-graduate jobs, including work in factories, as hospital porters, and as lollipop ladies. This has led experts to question the value of expensive university degrees in the current post-Brexit climate.
According to the figures, at the top of the UK’s higher education unemployment rankings are computer science graduates with 10 percent of graduates unable to find a job six months after graduation. Other graduates that are close behind include those of Mass Communications and documentation, Physical sciences and Engineering and technology.
The cap on tuition fees was raised to £9,000 in 2012, with the repayment threshold being lifted from £17,495 to £21,000. Currently 75 per cent of universities charge the full £9,000 fee.
The Government recently froze the repayment threshold to £21,000 until at least 2020, despite originally pledging to increase it with inflation. This means that more than two million graduates are being forced to repay more than they had signed up to when they took out their loans, a situation that has been heavily criticised by MPs in Parliamentary debate.
The Vouchercloud report has said that:
“The average salary for many sectors falls well below the threshold for paying back any student loan .. 56% of graduating students even admitted that their degree ‘was not worth’ the £9,000 fees in NUS research released last year, with 17% stating that their degree was worth ‘significantly less’ than what they paid.”
This mirrors the words of a leaked government document revealed by The Telegraph this year in which it was written that most prestigious universities do not offer high enough “quality and intensity of teaching” to justify setting a £9,000 a year fee. The leak spurred Gordon Marsden, Labour’s shadow minister for universities, to say in April:
“This leak is a shocking admittance of failure and shows what ministers really think of David Cameron’s flagship policy.
“The Government seem content to throw in the towel on efforts to widen participation in the existing higher education system, meaning that students from the least well-off families will be left behind.”
Meanwhile, those affected will be keen to see whether Theresa May makes any changes to David Cameron’s policy on retrospective loan hikes, another issue that is affecting recent graduates’ chances of paying back their financial obligations. The Tories had backtracked on a promise made in 2o12 not to hike repayment costs retrospectively, with money expert Martin Lewis describing the government’s refusal to address the issue by saying he, “Would have as much joy explaining the problems with this huge cost hike to a brick wall.”