Higher Education in the U.K vs. USA: Is it worth the debt

Higher Education in the U.K vs. USA: Is it worth the debt

According to a recent Sutton Trust report, UK graduates face higher debt levels compared to their US counterparts. According to the report, US graduates leave with higher education debt averaging £19,100 to £29,100 depending on factors such as the institution attended while UK graduates leave with approximately £44,500 in debt. Higher education debt has always been higher in the U.S. The UK has however overtaken the U.S. causing huge concerns.

UK graduates also have a higher debt to starting salary ratio than their U.S. counterparts. The Sutton Trust Report, however, states that the repayment system in the UK is more advantageous to borrowers. The report which focuses on graduate debt in the UK and U.S. among other countries such as; Australia, New Zealand and Canada recommends that UK legislators assess UK’s higher education funding policies as well as the impact of those policies on poor students.

The report also calls for a complex assessment on whether UK’s current student loan system provides value for money to higher education learners as well as taxpayers. There are huge concerns about policies adopted in the UK on student funding such as maintenance grants which are set to be scrapped and replaced by loans which feature a frozen repayment threshold. Poor students are bound to be hit hardest by these policies increasing the debt levels of UK students even further to £50,000+ after graduation. This begs the question; is higher education worth the debt?

a. Many jobs today still require a degree

Most people still argue that taking a student loan is worth it because most jobs in the UK, as well as most places around the world still, require a degree. Although students stand to accumulate thousands of pounds in debt, majority of the jobs require a bachelor’s degree as the minimum and most important requirement. You must have a college degree to get a job in the industries offering the most jobs today i.e. the finance, engineering and education industries.

b. If you will make enough to pay off your student loan comfortably, go for it

If there are prospects of earning enough money to repay your loan, taking a student loan is worth it. Although repaying £44,500 may seem challenging when you consider interest on the loan over periods exceeding ten years, devoting approximately 10% of your salary every month will be adequate to clear a typical student loan. Furthermore, it’s better to dedicate a small percentage of your future income that have no income at all because you didn’t take a student loan.

c. Your future earning potential is higher

A degree increases your earning potential exponentially over a lifetime. Earning a university degree sets you up for better-paying jobs in the future that a high school graduate may not have access to. A degree also opens up doors for higher learning opportunities which increase your earning potential even further. In essence, a £44,500 student loan isn’t much when you compare what you stand to earn in a lifetime once you graduate, get a job and advance in your career.

d. The benefits of higher education go way beyond education

It is also worth taking a student loan since you stand to enjoy greater benefits than simply getting a good job and salary in the future. Higher education broadens your perspective in life allowing you to make better/more informed decisions in life. The goal of higher education goes way beyond earning a living. For instance, studying abroad will definitely increase your general knowledge, social skills and broaden your horizon about life and people in general. These benefits are extremely valuable although they can’t be quantified.

Summary

Accumulating debt isn’t interesting. Taking debt is however justified in some cases. For instance, taking a student loan to pursue higher education is wise since the benefits you stand to gain far outweigh the cost. Although the UK has the highest student debt levels currently, you should really consider taking a student loan if you want to increase your chances of securing a good job in any of the major industries. In most cases, students are able to pay off their student loans fast when they secure a job after graduation. You should, however, choose the higher education institution you go to wisely and avoid unnecessary expenses throughout your studies to keep the debt at manageable levels.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

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