The university industry

I'm going to have another rant at how university is not such a good investment. I know someone who got a first class degree in Maths and Business Computing 2 years ago, and has just decided to "invest" thousands of pounds in a masters degree. He has been completely unemployed since graduating, and the masters degree will only produce more debt and mental anguish once he completes it and finds no one willing to throw jobs with 100k salaries at him.

Rather than studying good financial and investment techniques (which actually wouldn't be much use without a job or access to funds), certain people still persist in the belief that a university degree will solve all of their financial and self-esteem woes. In contrast, I've turned my back on education, even though I have a degree, and I spend my time looking for good investments in the real world.

The BBC website showed how UK universities generate billions of pounds for the economy. And there was me thinking that university was supposed to be about learning. It seems it has now become a way to fleece innocent trusting people out of their money, by giving them overpriced education and not telling them about the unlikelihood of most graduates earning a high salary, or even getting a job,  afterwards. Graduates are under more stress than ever.

The book The Millionaire Mind, has shaped lots of my thinking about the role and usefulness of a university degree. Amongst other things, the book generally says that graduates are not guaranteed steady jobs after leaving university.

Its so hard for graduates to get jobs now that they are resorting to paying recruitment companies  to try to find them unpaid intern-ship work! This certainly casts significant doubt on the governments recent claim that graduates will alledgedly earn 100k more than non-graduates over their lifetime.

A recent news article says graduates can only be expected to earn £2,500 more than non graduates. Remember that the average UK degree will put a recent graduate 175k behind a bus driver in the financial race. Here is how: A non graduate bus driver's total earnings of 25k per year, over 6 years, comes to 150k. In contrast, a student spends his years like this:  2 years of A-level = (-50k), 3 years of university = (-75k), at least 1 year of unemployment after graduating (-25k),  add approximate student debt (-25k). This comes to a graduate balance sheet of -£175,000!

As you can see, a graduate earning £2.5k per year more than a non-graduate bus driver is nowhere near enough to make up the difference. There is also the "opportunity cost" that is missed, as the bus driver can buy investment properties sooner, so in fact the head-start of the non-graduate may be too much to catch up with. Non-graduates can find find better paying work than bus drivers, so the difference is probably even more pronounced in reality. Current conditions are showing that graduates are unlikely to find any job, and will be lucky to gain employment stacking shelves. To say that graduates earn £2.5k more is probably highly optimistic, and in reality they probably earn a lot less.

A small percentage of the UK population are high earners, i.e well in excess of 50k. Some graduates will reach this level, but it is only a few people, and is quite frankly like a lottery, and this is after years of study. I know many graduates who are right now stacking the shelves in the local supermarket.

People mainly go to university to improve their employment and career prospects, but this way no longer works. Like an old tribal raindance, people still believe in it, and sacrifice their time and money for it. I actually think that graduates generally earn significantly less in total lifetime earnings, than the average non-graduate. University is an industry which makes the lecturers, student landlords, and student shops rich. For most students, it is a bad investment.

This brilliant article shows why it can pay to skip university.