David T Breaker: At last, students are thinking before attending university

By David T Breaker.

With university applications down 9.9% on last year, certain institutions and departments struggling to recruit, the usual suspects of the Left are busy predicting doom and despair - plus ça change - with the country apparently going to hell in a handcart because the wicked Tories have forced students to pay for their own degrees with debt. Jenny McCartney in the Telegraph foretells a future "considerably less meritocratic", where only the rich will be able to afford "soft subjects" and where the less affluent will be scared off from studying Medicine by the debts - though how anyone can be bright enough to become a doctor but not understand the loan deal or size of a doctor's salary baffles me - and compares the situation to the abolition of grammar schools.

The future, it seems, is bleak, with the masses wistfully photoshopping themselves into fantasy graduation photos, imagining how much better their life would be if only they'd got that 2.2 in Post-Modern Dance Studies. Those that do, according to Labour, shackled by the debts, we can expect to see begging in the streets in their ever-gaudier coloured graduation gowns - the more obscure the institution, the weirder the colours - clutching the scrolls of their Peace Studies degrees, their square mortarboard hats as improvised begging bowls. The rhetoric is all very fatalistic, the destination seemingly very Dickensian. I'm not convinced.

Now, don't get me wrong, I feel a bit sorry for students and recent graduates; not hugely sorry, just a little bit, but not sorry that they have to pay fees for what they have studied. Rather, I feel sorry for them vaguely in the way I'd feel sympathy for someone mis-sold an investment or pension scheme, tricked into unnecessary roof repairs by a door-to-door conman, robbed by a boiler room scam, or had over by a cowboy tradesman, because that is the nearest to what they have been the victims of: sold a dream that wasn't real by the cowboy educationalists and left with the bill.

The pressure to attend university is greatly underestimated. In Sixth Form at my school, it was the assumed destination and the "graduate premium" - then cited at £160,000 over a lifetime if I recall - was just accepted as fact, an irrefutable statistic; parents and students alike were quickly sold of the merits, if they weren't already - for many it's just "the done thing" - and actual cost/benefit analysis was entirely absent. In Sixth Form assemblies the Head of Year explained why having a barbecue in your room was a bad idea, whether we should have a gap year or not, and whether it was a good idea to watch Countdown or not, but never if university (or a certain degree) was worth it or not. That graduates earned more was just accepted; the degree was worth the investment, always, no question.

The problem is, though, that more and more data sources show this to be false; that university, as an investment, is rather atrocious in many cases. Personally the £160,000 "premium", being over an entire lifetime and stacked towards the end of a career, never struck me as that huge and I never planned to get a job: we've always been a self-employed and small business-running family, so that just seemed natural. The government talk at the time of 50% attending university struck me as likely to erode that "premium" anyway. I decided to attend at the last minute because it fitted around what I was doing at the time and I thought that economics would always be handy - and it is - but the majority attend for financial or career gain on this piece of misinformation.

Likewise, they do not study economics: a strange form of political correctness exists whereby nobody wants to tell people that their degree is useless; that the "graduate premium" is an average lifted by Medicine, Engineering and Maths (with huge premiums of £340,310, £243,730 and £241,749 respectively) but dragged down by Languages (£96,281), Humanities (£51,549) and Arts (£34,494). Young people are poorly informed or deliberately lured into making bad decisions by schools keen to boast of their university matriculation rate and universities needing students. Nowhere are the disclaimers you always see on US TV commercials for dubious products that "results may vary".

The alternative to university isn't explored or the data analysed: just as the "graduate premium" is inflated by a few career-aligned degrees - what I'd call vocational degrees, such as Medicine, Law, etc - and a few harder subjects such as Maths, the non-graduate "earnings deficit" is dragged down by those who didn't achieve the grades to attend university anyway. The data does not compare two identical groups, diverging at just one variable - attending university or not - but rather two very different groups: one skewed heavily towards the brighter individuals who you'd expect to earn more on average with the other group skewed in the reverse; it is comparing a group that achieved mostly A/B/C grades with a group that mostly achieved D/E/F grades.

Nowhere can I find data comparing graduate and non-graduate earnings with A-Level grades or IQ held equal; what the income gap is between those who achieved three A-Levels at B grade but didn't attend university compared to those that did attend, despite being the only way to financially value a degree, is a figure we do not know. The fact that the average graduate premium is so low, despite the sample being on average far brighter, suggests that many degrees may have little or zero financial dividend. It's even quite possible that certain degrees reduce earnings statistically by reducing employability (Mickey Mouse subjects that destroy credibility), or never recoup the three years lost earnings and fees, or encourage the graduate to forever seek jobs that don't exist rather than work they consider beneath them (prime example being the Occupy campers who snobbishly reject the notion of working in Starbucks).

At last, reality is slowly creeping in, with the new £9,000 fees focussing minds on whether a degree is worth it. The number of English individuals who have applied to university for 2012 so far is 9.9% lower than last year, and "soft subjects" are taking the brunt of the hit as students shift to more respected subjects. Medicine is down just 3,035 applications (3.1%), which being hugely oversubscribed, will still see all places filled, with other Medical Subjects up 6,674 applications (2.1%); by contrast, Arts are down 16.3%, Media down 14.6%, and Social Studies down 11.8%. There is great variation by age group with the young, having an entire career ahead of them, down just 2.6% - within the margin of variance and the demographic fluctuation I add - but mature students over-40 dropping by 10.5%. Fees, in short, are not just saving taxpayers money, but helping prospective students make better choices in terms of their future and our future economy; this should be no surprise - people always make better market choices than government.

None of this answers the question for Sixth Formers of whether university is worthwhile. Peter Thiel, billionaire co-founder of PayPal turned investor certainly doesn't think so, granting funds matching student loans to individuals ditching higher education for entrepreneurship to test his theory. Nor for the government does it answer whether the current focus is the right one; university, for better or worse, is still seen as the respectable, high-achieving "done thing", and the curriculum - as well as pressure and guidance - is still university-focused. Schools boast of the universities their former pupils attend, not the salaries they command or the number who start businesses. With graduate premiums in many cases dubious, and in most cases falling, some balance to the guidance given to school students is long overdue. Some guidance, perhaps, about switching degree or possibly ditching university, and even, perhaps, to consider starting a business. Fees must be just the beginning of increased consumer intelligence and improved decision making. It's time to do better research, deliver better data, be honest and say truthfully to each prospective student whether a certain degree is worth it, accept that for many the answer will be "no", but that as one door closes, others can be swung wide open.