Debt, Depression, and Dud Degrees: Why Would Anyone Go to University?

You're 16 years old. Unless you want to stay in an underpaid, zero hours job forever, you'd better fill in a UCAS form. That's what school tells you. That's what your parents tell you.

You might wonder, quietly, if you do really want to spend three years studying business studies or English literature or geography. But then, what's the alternative? A job at Sports Direct? Graduates earn more, you're told, by school, by your mum. You'll be taught by expert professors, you'll learn loads. And there's all the social side of it. Given how messed up the job market is, you'd be daft not to go. You apply.

But while you're visiting open days and writing your personal statements, you keep seeing things that make university sound less appealing. There are the £9k fees, the scrapping of maintenance grants (which have been replaced with more loans), the overpriced student housing, the reports of stressed and anxious students. Jo Johnson, the universities minister, even admitted that teaching quality is sometimes pretty shit. But fine, you'll put up with that, because at the end you get a degree, and that'll get you a decent job. Except a big report came out recently saying that graduates at some universities actually earn less than non-graduates. For students who study the creative arts, more than half earn less that £20k. Last month, a think tank said the government should "be charged with gross mis-selling" because many students will never see the vast graduate premiums that politicians have promised.

University is about more than getting a decent job – it's about learning new things and meeting new people – but, given the debt that students are taking on, it does matter. For years, young people have been told that university is a "phenomenal investment", that they'll earn more if they have a degree. But Stephen Kemp-King, author of the Intergenerational Foundation's recent report on the graduate premium, says politicians should not be allowed to "dangle the carrot of high graduate employment figures" if these do not stand up.

Unfortunately, for a significant number of graduates, they don't.

For a start, getting a graduate-level job isn't exactly a sure bet. Most graduates (around 60 percent) are actually working in jobs that don't require a degree, according to research by Chartered Institute of Personnel and Development.

This might be partly down to the recession (time will tell if the numbers recover or if recent graduates simply get stuck in non-graduate roles) but it's also because there are too many people taking exactly the same path: a full-time undergrad degree, says Andy Westwood, professor of politics at Winchester University. "In other words the competition for jobs is most severe as people graduate and they try to get into the labour market at that time. Employers, obviously, can benefit from that - you can get a graduate in a non-graduate job, great. You can offer an internship that takes the piss, great."

It's perhaps not that surprising then, that the much-talked-about graduate premium doesn't always materialise.

Government research has estimated that, after taking into account taxes and loan repayments, graduates are paid £168,000 (for men) or £252,000 (for women) more across their lifetime. But this is an average – and the amount of variation both above and below these figures seems to be increasing, says Geoff Mason, visiting professor at the UCL Institute of Education. "For a lot of potential students, they cannot assume that the average figure is going to apply to them," he says. "They do really have to be aware of the involved and that some students end up a lot worse off than others."

A recent study, examining graduates who left university in 2004, found that median earnings for a graduate were £16,500 one year on from when they left university. Fine, you might think, many of them would have struggled to get jobs or started off interning. But a decade on, a quarter of those graduates were still only earning around £20,000 a year. Pretty low considering the average wage in Britain is currently £26,500.

It's students on creative arts courses who get the worst deal. Ten years after graduating, they earn no more than non-graduates, with median annual salaries of £14,500 for women and £17,900 for men, according to a separate study by the Institute for Fiscal Studies (IFS). That's a lot less than medical students, the highest earners, who can expect a wage of £55,300 (men) or £45,400 (women). Economics graduates, unsurprisingly, also earn loads more – £42,000 (men) and £38,200 (women).

It's not just subject choice that affects your future income, it's where you study. There's a huge difference between what certain graduates can expect to earn. More than 10 percent of men graduating from LSE, Oxford and Cambridge earn in excess of £100,000 a year, ten years after graduating in 2012-13. At the other end of the spectrum, earnings aren't so impressive. For men at 23 universities, their salaries are actually lower than those of non-graduates 10 years on. This is true for women at nine universities.

The report doesn't name which institutions these are, but the researchers do explain that it's partly down to local labour markets. If you're graduating from a university in the north east and staying in the area to work, you'll probably find your salary is generally much lower than someone who has just left LSE and is working in central London.

Still, there's a huge gap between the salaries of different university leavers (which research suggests lots of school students aren't aware of). And although graduates typically earn more than non-graduates, a significant group of them don't. Still, if they're earning more than £21k they'll be faced with repayments on their student loans.

Kemp-King says the government is not doing enough to show young people how much they'll be paying back. "Like other workers young people will pay 12 percent National Insurance contributions over earnings of £8,000 a year and 20 percent basic Income Tax after income of £11,000 a year," he says. "Unlike other workers they now face an extra nine percent tax on earnings over £21,000 as repayment towards their student loans." Others say that, actually, not enough is being done to explain to students that they won't need to pay upfront for university. Either way, more impartial guidance for young people is clearly needed.

It's not hard to find graduates who, having opened a statement from the Student Loans Company, suddenly realise that they took on a loan without fully understanding everything about the Ts&Cs. When recent graduate Simon Crowther wrote to his MP complaining that he had been poorly informed as a school leaver, he struck a chord with many other university leavers – his letter was shared more than 20,000 times.

Although the basic principle underlying repayments is simple enough – the repayments are the equivalent to just one "posh coffee" a day, as the former universities minister helpfully put it – the terms can be changed. And the government has already broken a key promise. When £9k fees were introduced, the government said that the £21k threshold for repayments would rise annually in line with average earnings in April 2017. Then in November last year it backtracked, saying the threshold would be frozen until at least April 2021. It's been estimated that this will cost students almost £3,000 in increased repayments over 30 years.

At the time of the announcement, Martin Lewis, founder of Moneysavingexpert.com, said he was "spitting teeth" over the change, which affects students who had already agreed to take out the loans and means they will now repay their debt at a faster rate. Lewis, who chaired the government's student finance taskforce, has since hired a team of lawyers to investigate whether or not the U-turn could be challenged in the courts. He's advised students to assume that the freeze will remain.

Gill Wyness, lecturer in economics of education at the Institute of Education, fears that the U turn will damage students' trust in student loans, adding that it adds "a layer of uncertainty which is not welcome in this system."

This month, new figures emerged showing that the proportion of state school pupils going to university dropped the year that tuition fees tripled to £9,000. Many fear that the scrapping of maintenance grants, which will be replaced with loans for new students starting in September, will make things even worse. The change will "raise debt for the poorest students, but do little to improve government finances in the long run," according to the IFS. It says the poorest 40 percent of students going to university in England will now graduate with debts of up to £53,000 from a three-year course, rather than up to £40,500.

Even if students don't pay all this back – and, to be clear, the vast majority of people won't pay it all back, many won't even pay the interest, instead they will pay nine percent of their wages for the next 30 years – they probably will wonder what the headline cost of their course is actually paying for? "When I think about whether it was value for money, my immediate answer is no," says Hardeep Dhaddha, 24, who recently graduated from a media and communications course at Birmingham City University and who is now working as an assistant producer at Somethin' Else, an agency that produces multimedia for the likes of the BBC and Topman. Around two thirds of students in England feel the same way about their course fees, according to a study by the Higher Education Policy Institute.

Hardeep got her fair share of contact hours because she made sure she approached tutors when she needed extra help. But more information about how fees are actually spent would have been welcome, she says.

For many, a breakdown of tuition fee spending will include depressing news. If you're a student on a course that has very few contact hours and is cheap to deliver – ie. maths, English, and most of the humanities – then you're subsidising the flashy labs that your engineering friends use. You're also more likely to be sitting in an overcrowded lecturer hall – cheaper degree programmes are exactly the kind of course that universities find easiest to expand, despite academics' fears that cramming in extra students is damaging teaching quality.

"Every single university in the country, even the specialist ones, have higher cost subjects to teach and some lower cost ones, the £9k fee is somewhere in the middle," says Westwood. "The problem is, do those individual students know that they're paying for this (obviously in some case they aren't)? And are they ok with that? Are they happy with that? All the other things the university puts its money into - the library, accommodation, student union - is that enough of a deal for those that are cross subsidising the more expensive subjects?"

But it's a fine line – research suggests that most students believe teaching should be prioritised above buildings and social facilities when it comes to saving money. Realistically, some are probably too busy studying, working for extra cash or worrying about their job prospects to care what the student union bar looks like anyway. Westwood says there has been a change in students' priorities since the fee rise. "Certainly just from teaching you see this change [in attitudes] is more obvious in terms of what people want from their studies, how much they turn up, how much feedback they want," says Westwood. Students, aware of how much their degree is costing and of how hard it is to get a good graduate job, want to make the most of their studies.

There are worrying signs that this pressure to achieve at university and to line up work for afterwards is having a negative impact on students mental health and happiness. Almost a third of students experience clinical levels of psychological distress including anxiety or depression. Universities have warned that demand for counselling is increasing at an annual rate of around 10 percent. And earlier this year, statistics showed that student suicides also rose to their highest level since 2007.

Rachel Piper, policy manager at Student Minds, says the growing demand for counselling services is down to both increased prevalence of mental health difficulties and increased reporting. There are lots of factors affecting mental health, she adds, from the transition to living independently and problems with housing, to culture shock and pressure around alcohol. "Then there's the more overarching issues of the job market and anxiety about prospects coming out of university and the pressure to achieve high academic standards," she adds. "We know that now, as of 2013, 50 percent of young people enter higher education so there's obviously more competition there."

Sharon Walpole, CEO of Not Going to Uni, says students are more and more interested in doing on-the-job training rather than university. The problem is there aren't yet enough high-level apprenticeships (where you might work towards a degree for free, train on the job and get a salary) out there. And, as funding for careers advice in schools has been cut, there's a real lack of information about those that do exist.

Walpole remembers visiting a group of 25 apprentices and asking where they found out about their scheme - not one had heard about it through their school. "One girl put her hand up and said that when they got to talking about Ucas [at school] they were brought into the assembly hall and [the teacher] said put your hands up if you're not going to do Ucas - they put their hands up, and they were sent off to the sixth-form room and the teachers just carried on working with the kids doing the Ucas process. I think that's really quite harrowing."

She hopes that attitudes are gradually changing, but fears that often university is presented as the only route. Students, aged 17, are told they can rack up a load of debt by moving away from home and studying full-time on a three-year course at university - or they're told… well, there isn't much else out there. Every year, there are record numbers taking up the first option. And there's a long queue of universities who are keen to get more bums on seats (an extra £9k per person) and who are ready to woo them with marketing campaigns.

Lots of students will find university a transformative experience. But there are signs that some will also find it a disappointing one – whether because the contact hours and teaching quality just isn't good enough or because the job prospects are nothing to shout about.

Telling students that university is a possibility, regardless of what background they are from, is obviously a good thing, but there needs to be a decent range of options out there. The current system doesn't encourage people who want to study as mature or part-time students (the number of part-time students has dropped 60 percent since 2006, while the number of mature students has halved over the same period). Nor are students given enough information about what to expect after graduating and how this compares with other training routes. And, at the same time, there's no space for mistakes or bad judgement on the part of students.

You're only entitled to student finance in England for your first degree – if you screw up and do the wrong undergrad, you can't ask for another loan so that you can go back and do another one. And if you earn over £21k, you'll be faced with repayments – even if you don't think the course was worth the sum that's being deducted from your pay slip, and even if your pay packet isn't as big as you'd hoped it would be when you first signed up for a degree.

Today, 18th of August, thousands of students will find out whether they got the grades to earn a place at university. They are likely to be left thrilled or disappointed. But few will wrestle with the complexities of whether higher education is the right thing to strive for.

Hardeep says that she's pleased with her job, but that not everyone from her course has found their feet. "Some of the people I know who were really driven and were obviously going to try hard, they've done well… but there's other people, the people who were lost at uni, are still lost."

Looking back, she doesn't regret studying, but she's not convinced it was really necessary: "I know now that I have a job that you can do it without going to uni."

@rebeccarat

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