28th February 2018 9:00
By Blue Tutors
With Theresa May launching an independent review of university tuition fees in the UK, the BBC published an article on the myths surrounding fees, and whether they are true or not. This may be of particular interest to our A Level students who are currently considering whether to apply to university, and how the debt they may accrue will affect their long term finances. University tuition fees rarely vary in England, all around the £9,250 maximum, but there are some differences in other parts of the UK
The main two myths are that the higher loan one receives, the more they will be paying each month after university, and that most graduates are paying off their student loan for the rest of their lives. Both of these are false because of the way in which the loans are collected. After university, you will have to pay off your student loan at 9% of earnings, but only for earnings over £21,000, rising the £25,000 in April this year. Also, after 30 years student loan debt is written off, regardless of how much has been repaid.
It’s mistakenly assumed that living in another country after graduating means you never have to repay your tuition fees, but this isn’t true. The UK government ask for an estimate of earnings before emigrating, and the repayments are at the same rate as if you were in the UK. Studying in Scotland doesn’t remove the cost of university tuition either as only Scottish students and those from the EU qualify for fee tuition.
The idea of the review is to establish whether universities in the UK offer value for money; does the eventual degree compensate a graduate for the debt they may have. The overwhelming opinion seems to be that it is worth going to university, and a simple calculation shows, for example, that if a degree would increase your salary from £30,000 to £30,450 then it was a good decision financially. The bigger question might be whether employers artificially value a university education and pay graduates more as a result, or whether many students would be better off choosing a route other than a university education when aged 18 to improve their career prospects and long term earning potential.