Why our love affair with university is on the rocks

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Growing up in a middle-class household, I assumed that the “normal” life pathway was to go to school, get good grades, get into a respected university, graduate find a great company and the work for them until I was 65 – at which point I would retire to live the good life.

However, that’s not how today’s world works. In fact, for millennials (like myself!) on average we will stay in a job for 2 years and 9 months, with most millennials estimated to have 12 job changes and between 3–7 careers in their lifetimes.

As debts soar and salaries stagnate, it’s little wonder young Australians are starting to opt for trades instead of degrees.Credit: Dionne Gain

Meanwhile, the landscape of higher education is changing. It feels like we’ve hit a big speed bump – the latest stats tell us that the number of students donning the graduation cap for a bachelor’s degree has nosedived more than 13 per cent since 2016. On the flip side, postgraduate courses are having a bit of a moment, strutting their stuff and seeing a steady rise during the same time frame.

So, what’s the deal? Well, it turns out our love affair with the classic university experience might be going through a bit of a rough patch.

Why, you ask? Well, buckle up – it’s a wild ride. First off, student debt is skyrocketing, making potential scholars think twice before diving into the academic deep end. Enrolments in bachelor’s programs have gone from 934,000 in 2016 to 815,000 in 2022. That’s no small drop in numbers.

This trend is not an isolated phenomenon but part of a broader evolution in the perception of education and career pathways. The Universities Accord’s interim report projects that, by 2050, around 55 per cent of jobs will necessitate higher education qualifications, emphasising the long-term importance of academic pursuits. However, the current trajectory suggests a mismatch between this projection and the choices made by aspiring students.

These shifting dynamics accentuate a broader societal evolution in how individuals perceive and pursue success.

The dwindling enthusiasm for traditional university education is attributed to various factors. Financial barriers, as highlighted in Melbourne University’s report, emerge as a significant obstacle, with exorbitant tuition fees deterring nearly 60 per cent of respondents.

This raises questions about the prevailing notion that a university degree guarantees a better job and financial security. The changing dynamics of the job market, as illuminated by the flourishing trades and vocational education sectors, contribute to this shift in perceptions.

The allure of hands-on roles that offer substantial earnings without the burden of significant student debt is reshaping career aspirations. Tradies, truck drivers, and other vocational roles can command salaries that rival or surpass those of university graduates.

The median salary for university graduates in 2022 was $68,400, while the average student debt hovered around $24,770. In contrast, some blue-collar workers, armed with certificate-level qualifications, earn between $150,000 to $180,000, with the added advantage of graduating debt-free through earn-while-you-learn programs.

This trend is particularly evident in the increasing number of apprenticeships, with a 10 per cent rise in apprenticeship starts recorded at the end of 2022. The resurgence of trades and vocational education challenges the conventional wisdom that a university degree is the sole path to success.

The labour market is evolving, with a growing emphasis on skills and practical experience over traditional academic credentials. Young people are starting to really feel the squeeze of financial stress, and the notion that university might not be the golden ticket it once was is gaining traction.

In this shuffle of life choices, one thing is clear – the landscape is changing. The way we define success and the paths we take to get there are evolving. Traditional university routes are getting a bit of side-eye, and alternatives are stepping into the spotlight.

The education system needs a glow-up, staying relevant and accessible in a world where success doesn’t fit into a one-size-fits-all box. The cost-benefit analysis of pursuing higher education is under scrutiny, prompting a reconsideration of the value proposition offered by universities.

The declining enrolment rates in universities are not indicative of a diminishing thirst for knowledge but rather a strategic recalibration of educational pursuits aligned with the demands of a transforming job market.

These shifting dynamics accentuate a broader societal evolution in how individuals perceive and pursue success. The traditional narrative of university education as the default path to prosperity is being re-examined, and alternative avenues, especially in trades and vocational education, are gaining prominence.

The challenge for policymakers and educators is to adapt to these changing aspirations, ensuring that the educational system remains relevant, accessible, and aligned with the evolving needs of the workforce.

As the notion of success undergoes a paradigm shift, the focus must be on providing diverse and viable pathways for individuals to achieve their goals, fostering a future where success is not bound by the confines of conventional expectations.

Victoria Devine is an award-winning retired financial adviser, best-selling author, and host of Australia’s number one finance podcast, She’s on the Money. Victoria is also the founder and co-director of Zella Money.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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