The rates of young people in the UK going to university has increased in recent years despite rising fees and the financial downturn. In fact, the university industry as a whole in the UK, has expanded to a far greater extent than anywhere else in Europe. Making the move from fulltime education into employment can throw up challenges, with financial challenges often being the largest. Hence, many recent graduates utilise payday loans before even considering what else is out there such as payday loan alternatives and other products.
Per head, the UK has more degree holders than Spain, Germany, Austria, Switzerland and Norway. With this in mind, it means that the competition graduates face upon leaving university is greater than ever.
However, this doesn’t mean that it isn’t worth attending. Reports show that graduates have a much higher rate of employment and can expect to receive on average an additional £6,000 (known as the ‘graduate premium’) a year than those who did not attend university.
It remains important to understand and address some of the main challenges young people face when they make the transition from the education bubble, to the wide world of employment, and the ways in which they can be handled.
Paid Work Placement Schemes
On average, the UK’s top graduate employers were offering on average 100 paid internships or work placements at their companies (if you are still a student reading this, many of these are becoming increasingly available during the first and second years of university). These schemes often play an important role in recruiting graduates, as it is often an initial indicator of the reliability of an applicant when they come to apply for a full-time role if they have already completed a placement at the company previously in some guise.
If you are looking to go into the financial sector you are in luck. The City’s top investment banks offered by far the most paid work experience and placement for 2017; offering over 2,600 paid internships. The sectors that tended to offer the fewest paid placements were those in the retail and management consultant sectors.
How to Approach Internships and Work Experience
In terms of dealing with work experience and internships, it is largely to do with planning. If possible, try to accumulate experience (paid or unpaid) at university to alleviate pressure once graduating. In addition, seek ways to cut spending (such as living at home, or taking on an additional job) as a short-term fix so that you can complete an unpaid placement if you truly want to go into that particular sector and have exhausted other avenues for finding paid work within it.
Repaying Student Loans
Another financial challenge that graduates worry about is paying back their student loans. With fees having risen since 2012, many fear the debt they owe. However, numerous reports have stated that it is likely that up to three quarters of people who took out a student loan after this date will not end up paying it back fully.
In the meantime, student loan repayments start once you have started earning £21,000 if you started your course after 1 September 2012 in England and Wales. If you stated before this date, then you are expected to start making payments once you start earning over £17,775. Each year you will pay 9% of the amount owed that is over the repayment threshold.
How to Tackle Student Loans
To calculate how much you owe and to organise a repayment plan is simple. Check the Student Loans repayment website for further information about any next steps. However, if having graduated and once in a stable job, you may need to dip in and out of your overdraft or require the use of credit cards. Whilst this is not ideal, it is the reality of newly qualified life for many. There are various products that are friendlier than traditional loans. For example, a recent graduate may favour an overdraft alternative facility online rather than a payday loan.
Work Experience and Internships
Depending on the industry that you go into, the expectation that you have completed work experience and internships can be extremely high, and in some cases almost a prerequisite. For example, work experience placements are commonplace in the media and publishing industries.
However, a high proportion of internships and placements across the country tend to be unpaid, and graduates can end up finding themselves in a bit of a conundrum if they haven’t done placements whilst at university, when it is likely that this was the most feasible time at which they could take on unpaid work. Consequently, some graduates can end up feeling extremely stuck, torn between wanting to follow their career path and being prevented as they need an income. This is just one of the many considerations that recent graduates will need to make upon commencing employment in almost any way.