The real cost of a degree

At the risk of showing my age, I very much remember the days when students who went to university would get a grant (I wish I was one of them). Yes, that’s right: all students got some money, although the amount depended on your family’s financial circumstances. Then came the days of student fees and student loans (just my luck). Today, most students leave university with a large debt to their name.

The Higher Education Act 2004 outlined that a university could charge fees of up to £3,000 per annum, variable from course to course, and varied with inflation by the government. Currently, this stands at £3,290 for 2010/11 academic year. This means that students now take out two loans: one for fees and another for maintenance (accommodation, food etc). This amount can range from about £3,500 to £6,000 per year. Researchers asked 2,000 students from 139 university campuses in England how much debt they had amassed (including credit card, bank debts and tuition fees) and the average was £5,293.

The amount owed is repayable based on income; a graduate pays 9% of their gross income over a £15,000 threshold. The interest is linked to the retail price index (RPI), and any loans outstanding after 25 years can be written off.
  
Having gone though this system, I remember how many friends really struggled to pay for food and other basics after paying for accommodation and fees. Many started part-time work, and this was fine when jobs were available. However, over the past two years, the number of students getting into financial difficulty has increased, with many wishing to work but with no jobs available. The amount of summer jobs available has reduced and consequently, part-time work for students has become much more competitive

Now we have a new coalition government with new ideas. Unfortunately, it is also a cash-strapped government looking for new ways to fund the debts it finds itself in. Vince Cable, the Business Secretary, is considering replacing the Income-Contingent Repayment (ICR) as described above with a new Graduate Tax Scheme.

In principle, the idea behind the Graduate Tax Scheme is that those who earn more pay more for university. In a speech to universities, Vince Cable said: “It surely can’t be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger”.

When I think about it, that is exactly what we do in the real world. The more we earn, the more tax we pay. I believe that slowly we will start to see more students go abroad for higher education; the danger that follows is that they will not return. We will slowly see a shortage of skilled labour that will only push the cost up for these professions: a simple case of supply and demand.

However invaluable education is, the fact remains: if it’s not affordable at the outset then we will lose those with so much potential but who are worried about how they can cope with debt. For those who do take the journey, isn't the government just putting more pressure on those who have so much pressure on them already?

So, what would a Graduate Tax Scheme mean for the next generation of accountants?

I believe that many more students will look to go straight into accountancy immediately after leaving school. The three main accountancy bodies (ACA, ACCA and CIMA) provide options for school leavers. The advantage is clear, you can earn at the same time as studying and if you get lucky, you could even be sponsored by a company.

The reason that more students don’t do that now is because university is a life experience. Additionally, if you have an accountancy-relevant degree, you get many exceptions from the above accountancy bodies therefore reducing time to pass exams.

However, if the cost of going to university goes up two-fold, would you bother? In my opinion, the majority will still go through university but over time the percentage of those who give university a miss will increase.

It would be a shame if student miss out on university life due to costs. Let’s hope the findings of a review by Lord Browne of Madingley, BP’s former chairman, result in an outcome that allows students to experience university life without accruing crippling debts.


Mehul Patel graduated in Actuarial Science from University of Kent before qualifying as a Management Accountant. As the Financial Controller of Trinity Mirror Digital Recruitment Ltd, part of Trinity Mirror plc, Mehul has the responsibly of budgets, forecasting and helping the business and the board find ways to continue expanding.

A career in accountancy becomes more challenging in today’s climate

Last year the Association of Chartered Accountants' reported that accountancy jobs were set to become much more complex due to the increase in regulations and difficult business conditions that were on the horizon. 

As a Finance Controller I’ve definitely noticed an increase in the complexity of my role in this very different commercial environment, but I’d still consider the job enjoyable and challenging. What’s more, as my role has developed over the past year, I’ve become more connected to the business and the commercial decisions that are made at board level. 

The company I work for has obviously been affected by the current financial climate and many of my colleagues have unfortunately been made redundant. In order to help me to deal with the increased pressures of the work I do in financial analysis, the company has invested in my career by providing additional professional and personal training. 

My advice for candidates considering a financial career would be to go for it! Keep a look out for jobs at all levels too, such as financial management or executive jobs as these can often provide inspiration for where to take your career. In addition, make sure you review the professional training opportunities that come up frequently as it is very important to stay ahead in financial regulations and procedures. 

The current business environment maybe difficult, but if you apply yourself and take on all opportunities to add to your experience and skills, a job as an accountant is fulfilling, challenging and varied. I’d highly recommend a career in accountancy.

Mehul graduated in Actuarial Science from University of Kent following on to qualify as a Management Accountant.  He started his qualification at HotRecruit Ltd. Through the first 3 years the company acquired 13 other companies to become a large network of websites, in which Mehul's role was to ensure the financial systems were integrated along with all finance processes. 

In Oct-05 The Hot Group Plc was acquired by Trinity Mirror Plc and since has acquired further specialist job boards which are all now brands of Trinity Mirror Digital Recruitment Ltd. Mehul's role in these acquisitions was to carry out due diligence and model prospects of these businesses. As the Financial Controller of TMDR Mehul has the responsibly of budgets, forecasting and helping the business and the board find ways to continue expanding even in these challenging times.