What price a piece of paper?

Just as the government raises fees to finance greater access to higher education, research suggests

Jack Molloy never thought he would go to university. He left school with two low-grade A-levels. "I was sick of education. I was always much better at the hands-on work than the written stuff, and by the end of sixth form I really wasn't interested. I just wanted to get a job and get on with my life." While his friends took gap years, Jack began an apprenticeship as a mechanic. "I really enjoyed it, but soon realised that there was no money in it at all. I was getting £70 to £90 a week, and trying to live off that and pay rent. If I'd finished the three years' training, my starting salary would have been £13,000."

Seeing little hope of a better salary without a degree, Jack applied for a course in aeronautical engineering at the University of Salford. "I didn't want to go back into education, but I didn't feel I had any choice." He didn't have the necessary A-level grades, yet was given a place anyway, with few questions asked. However, he was no more motivated than he had been at school. "The course was good, but I had all the same problems with the written work. I just don't enjoy it." He scraped a third-class degree and left university £12,000 in debt. He is now training to be an engineer for British Gas.

One senior lecturer at a new inner-city university sees a lot of students like Jack. "I would say that about 30 per cent of my students are simply not interested in studying," she says. "Many of them will admit that openly. They feel they have to get the qualification. It really brings down academic standards, and I feel indignant that the rest of the students get a bad deal."

The government wants 50 per cent of young people to go to university. The row over top-up fees has focused on who should pick up the tab. But a more fundamental question is whether such a high target is necessary or even desirable. The government's line is clear: learning is really all about earning. In 21st-century Britain, it argues, knowledge will be the most valuable commodity on the market, as jobs in manufacturing and services are shipped out to more cost-effective locations in the developing world. So young Brits must gain high-level skills that employers will not be able to buy more cheaply elsewhere. As the state cannot fund such a dramatic increase in student numbers, graduates have to shoulder the financial burden of their training. But that seems only fair, as they can expect to command high salaries in later life.

However, many young people don't see their studies as a financial investment. "You certainly don't do a course like mine because you think you're going to make money out of it," says Chloe Ostmo, an art student in Brighton. "The important thing is having the time and space to learn and be creative." Others feel that economic pressures detract from the more important benefits of higher education. "I didn't go to university to get rich," says James Page, who has a BA in English and an MA in philosophy from Leeds. "I did it because I was interested and wanted to make a useful contribution to society. But if I had left university in more debt, I'm sure I'd feel more pressured to put money first."

In fact, the economic benefits of increased access to university are far from assured. In their forthcoming book Playing to Win: managing employability in a knowledge economy, the academics Phil Brown and Anthony Hesketh argue that fierce competition for graduate jobs will cause salaries to fall. "I don't expect the earnings of the average graduate to be anywhere near as much as the government is predicting," Brown tells me. "Young people are being sold higher education on the basis that they will get high-paying jobs, but this is based on a faulty understanding of the labour market. They may well find themselves struggling to pay back their debts."

Brown argues that companies are taking advantage of a labour market flooded with well-qualified young people, employing them in lower-level positions and paying salaries far below what a graduate would have expected in the past. "Only 25 to 30 per cent of jobs require degree-level skills, even in a knowledge economy," he says. "But with more graduates on the labour market, employers increasingly look for a degree, even for relatively low-skilled positions; obviously, it's great for them if they can get well-educated young people on the cheap."

Figures confirm that there aren't enough graduate-level jobs to go round. In 2001, more than 300,000 graduates competed for 15,000 elite jobs; 57 per cent of jobs in Britain required less than three months' training, and more than a fifth of employees reported that it took less than a month to learn the job well. Brown predicts that the proportion of elite jobs available in Britain will drop further. "India and China are investing huge amounts in higher education and producing a number of graduates comparable to the United States. Just as service and manufacturing jobs have moved overseas, companies will soon be able to recruit graduates, at a fraction of the price, in the developing world."

For the government, it is about more than just economic growth. The target of 50 per cent in higher education is part of Labour's vision for a more meritocratic Britain. Giving more people the chance to study will, it argues, open up the top jobs to intelligent, ambitious graduates from working-class backgrounds.

But again, the evidence suggests that widening access to university does not promote social mobility. Researchers at Oxford University have found that whereas, in the 1970s, working-class students considerably improved their career prospects by getting degrees, this is no longer the case. Academic qualifications now carry far less weight with employers. They look instead for qualities and qualifications that tend to favour applicants from middle-class backgrounds: a degree from an elite university; postgraduate study; unpaid work experience; or "personal" qualities such as confidence and presentation.

Marks & Spencer, for example, recruits its 200 graduate trainees from 6,000 applicants on the basis of tests of personality, reasoning and literacy. Another fast-track scheme studied by Brown and Hesketh received 14,000 applications for 428 places; graduates from Oxford University had a one-in-eight chance of success, while for those from new universities, the chance was one in 235. "It is a genuine problem for many employers," says Brown. "They are notionally committed to equal opportunities, but when they are overwhelmed with applications, diversity is sacrificed. They'll recruit what they see as a safe bet."

None of this implies that people should be discouraged from going to university if they want to, but they should be aware of the real reasons for making the investment. The emphasis on targets and utility does not do justice to the contribution that higher education makes to society. Nor is it necessary to sell people higher education with false promises. Just ask Jack, an unlikely advocate: "I know I didn't get as much out of it as I could have, but I'm still glad I went to university. I had a good time, got away from home, met new people. I'm sure eventually it will pay off."

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