The effect of the pandemic
A quarter (26%) of young people aged 16 to 24 who are not planning to go to university cite COVID-19 as a factor in their decision, up from 18% last year. The most common reasons stated for coronavirus being a factor are that young people were concerned they would struggle to pay for university fees due to the financial impact of the pandemic and that they were worried that going to university might increase the risk of them catching the virus.
According to the AIC’s survey, current students have also been affected. Nearly nine in ten (89%) students currently at university stated that COVID-19 has made their time at university worse value for money, an increase from 82% last year. The top three reasons given were the reduced face-to-face teaching hours (73%), a more limited experience of the social side of university (54%) and the impact on students’ mental health which had affected their university work (39%).
Graduates who were at university during the pandemic reported a similar level of disappointment. Four fifths (81%) said the pandemic made their time at university worse value for money due to the reduced amount of face-to-face teaching (87%), the limited experience of university social life (50%) and that the pandemic had reduced their chances of getting a job (36%).
Demonstrating the disruption of the past year, less than half (44%) of students agreed that their time at university is good value for money, down from 59% in 2020. Amongst graduates the figure is 46%, a decline from 55% in 2020. Over a quarter (27%) of young people planning to go to university considered not going because of the pandemic.
Will payback time ever come?
Most graduates (91%) took out a loan to finance their time at university, but fewer than one in five (18%) of these believe they will be able to repay it in full. Current and prospective students are more optimistic, with 34% of those who plan to have a student loan or who already have one expecting to pay it back in full. However, a further 29% think they won’t be able to pay it back, while the remaining 36% are unsure. There was more confidence among male students about their ability to repay their loan fully, with 45% anticipating this would be achievable, compared to 26% of female students. Students who anticipate they will be able to repay their loan think it will take an average of 13 years to pay it off.
When it came to understanding the terms of their loan, only 20% of graduates who had a loan said they were completely clear about how the interest on their loan was calculated and only 26% knew the interest rate they were paying on their loan.
Currently more than £17 billion is loaned to 1.3 million students each year. The value of outstanding loans at the end of March 2021 was £160 billion, with the government forecasting this will rise to around £560 billion by 2050.
