When booking an Uber, you have the choice of various types of cars driving you from A to B and every type of car carries its own price. But if you call or hail a regular taxi in Milan or Paris or even a black cab in London the journey fee will be the same, whether you are picked up by a Skoda, a Mercedes or - in London’s case- by a clean, electric black cab or a smelly old rattlebox.
Fees and outcomes
Should we apply the Uber model to universities? Currently, universities have a one-fee-fits-all-approach: tuition fees are the same for all universities and their various courses in the UK, regardless of the quality of teaching, the class size, the location or, most importantly, the financial outcomes for graduates. For example, graduates of the Mercedes type universities are faster out of the gate both jobwise and money wise. In fact, adjusted for degree type, top university (Oxbridge) graduates have (1) higher starting salaries (an average of £7,000 more than those of all other universities) and (2) have a 74% change of being in professional employment 6 months after graduation versus only 55% of graduates from all other universities.
Financial outcomes; why they matter when selecting universities & courses
Now that you have rounded up some impressive GCSE results and have started to explore universities, should you indeed think about the monetary value of a degree as well as at which institution you will take this degree? Degrees in Humanities (according to the Sutton Trust) unsurprisingly pay much less than top earning degrees in topics such as medicine, engineering, computer science and economics, but a classics degree from Oxford might still land you a similar salary to that of a chemistry graduate from any other university.
If you are lucky enough to be educated privately so far, you and your parents may consider the absolute level of the university fees less important than what you want to study and where. But even if the monetary investment in your degree is not a real issue, the value of the ‘yield’ (future earnings potential) on this investment must be taken into consideration. An extensive report by the Sutton Trust concluded that: “for students, both the subject they study and the university they attend matter for their career outcomes. Graduates from more selective universities, and from courses like medicine, engineering, economics, and computer science, earn more on average, and are more likely to go on to a professional job, than are those graduating from less selective universities, or from courses in the arts, humanities, or social sciences. This is true even after taking into account a students’ pre-university achievements and social background.”
So, if you are in the process of pre-selecting universities and possible courses, think long and hard about it. University is fun, and meant to be, but ultimately it is to prepare you for you adult working life, which ideally starts with a bang.
Outcome gap & university fees reflecting value
The gap between the earnings potential for similar degrees from top or second (and worse, third) tier universities is large enough – and even larger over a lifetime –to question if the current one-size-fits-all approach makes economic sense and if applying the Uber model would not be a better solution. But obviously, not a single university wants to be the Prius or the Skoda of universities and hence have to adjust their fees downwards; the top institutions, on the other hand, may feel that they can’t increase their fees to reflect the better outcomes for their graduates fearing it could deter future students.
But, with Oxbridge graduates so far ahead in the ‘future earnings’ tables, this regardless of students being private- or state educated before entry, students who take out expensive student loans for universities and degrees at non-elite institutions, have to realise that they are financially behind their peers from more elite universities from the moment of graduation. It is, after all, one thing to have to borrow £60,000 for an economics degree at Oxford, but quite another to do so for an English degree anywhere outside the elite universities. The time it will take for those graduates to pay back their student loans is so different (longer) and the consequences so wide-ranging, that it begs the question why tuition fees need to be the same for anywhere and anything.
So, should the UK university system apply the Uber model? Should the less shiny models charge lower fees, so their graduates. would have less debt and hence a higher disposable income sooner after graduation, allowing them to catch up on the higher starting salaries of their peers who were able to go in a Mercedes? With university entry becoming more and more competitive due to rising applications, (UCAS estimates a 40% rise in applications by 2025 to 1 million students in total) the Uber model might have more merit than we think.
Recommended links:
https://www.economist.com/graphic-detail/2019/01/26/the-cost-of-studying-the-arts-at-oxbridge
https://www.ox.ac.uk/admissions/graduate/student-life/careers-and-alumni
https://universitycompare.com/rankings/career-opportunities/
https://www.oxfordmail.co.uk/news/19542406.oxford-university-produces-best-paid-graduates-uk/
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