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Young people’s response to the cost of university and the recession

Joe Wright, 5 March 2014

Education, education, education

Among the findings of the ONS’s paper on young people in the labour market for this quarter there is, unsurprisingly, double the amount of young people (aged 16-24) in full time education than there were 30 years ago. Creeping up to half (42 per cent) of the UK’s next generation have carried on their studies, with 83 per cent staying in education till 18, and a third of young adults continuing to university or other kinds of courses. The percentage of young people carrying on to university overall is precisely four times that of the measly 8 per cent that did in 1984.

In 1997, the ONS reports, ‘there was a sharp rise in those in full-time education and this increase happened around the time of one of the biggest changes in higher education funding for 30 years, when student grants were stopped and some tuition fees were introduced.’

It seems Labour’s ‘Education, education, education’ resonated with the population more immediately than anyone could predict. Without such a major campaign to place education at the heart of success, it is hard to explain such an influx during a time when student grants were abolished. It may be the case that the tuition system allowed universities and polytechnics to take on far more students with the extra funding, or that entry requirements were dropped as a result of marketising university entrance.

The cost of Further Education

“The proportion of young people undertaking work alongside full-time study has been falling since the year 2000.” Of the 3.03 million people in full-time education, 1.94 million were either not seeking or were unavailable to work.

Annoyingly, these numbers are not broken down between 16-18 year olds and those in higher education. But, given the high majority (91 per cent) of students now not taking on some form of employment, it is reasonable to infer that there has been a real decline in people taking on part time work to continue studying after school. It part-explains why so many students leave full-time paid-for education with increasing amounts of debt; that is on top of the gargantuan increases in university tuition fees. The overdrafts offered to students through the multitude of Student Accounts are one explanation – NatWest, Lloyds and Barclay’s offer £2,000 interest free (till you leave university) with up to £3,000 with interest.

It may also be that more students not needing a job says more about the king of people who can take on further education these days. Either they are thriftier, which is hard to believe given the higher costs of amenities: rents and energy are particularly painful these days, or they have the kind of parents who can subsidise the cost of not earning.

How young people respond to recessions

Another interesting finding is that education is treated as a safe haven during recessions. There are sharp spikes in the number of young people entering FE whenever they feel there are fewer opportunities in the job market. It happened in 1992 following the recession of the early 90s and in 2008 after the financial crisis. That may not be surprising, but it is problematic for the Government which is seeking to part-reverse New Labour’s endorsement of ‘university for all’ toward more apprenticeships. It also dispels the notion that recession has made young people more sceptical of the value of degrees given that the number of entrants has consistently risen since 2008 – and with a tripling of fees.

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