Degree apprenticeships: get a job and have your tuition paid. Where's the downside?

[Mise]

http://www.bbc.co.uk/news/education-30193095

Degree apprenticeships launched to boost hi-tech skills

Young people will be able to gain a full honours degree while earning a wage and paying no fees, under a scheme backed by government and industry.

The new Degree Apprenticeship qualifications will be taught in England from next September, starting in the digital and software field.

The government will pay two-thirds of the costs and fees while employers pay trainees' wages and other costs.

The government says employers of any size can take part in the scheme.

It stems from government collaboration with higher education and industry, said Digital Economy Minister Ed Vaizey.

Some 150 places have already been guaranteed on the programme by the employers involved, in subject areas ranging from software design to information technology for business.

'Integrated' learning

The aim is to integrate academic learning at degree level and on-the-job practical training - "to ensure that education and training routes are providing the skills which employers need now and in the future", said Mr Vaizey.

The employers involved include Accenture, BT, Capgemini, Ford, Fujitsu, GlaxoSmithKline, HM Revenue and Customs, Hewlett Packard, IBM, John Lewis, Lloyds Banking Group, Network Rail and Tata Consulting Services.

The academic side of the courses will be provided by universities including Aston, Exeter, Greenwich, Loughborough, Manchester Metropolitan, University College London, the University of the West of England and Winchester.

Capgemini's UK chairman Christine Hodgson said the scheme would "enable young people to build the academic and practical skills needed for success in the tech sector and help create the talent needed to boost the digital economy".

Richard Pettinger, director of information management for business degree programmes at UCL, said the university was delighted to collaborate with employers and government on the new qualifications "to help increase the flow of skills into the tech industry".

'Massive demand'

Head teachers also welcomed the scheme - Brian Lightman, general secretary of the Association of School and College Leaders described it as "a really interesting development in the growing range of alternatives to traditional university courses".

"There is massive demand for recruits to these industries who are highly skilled and knowledgeable," said Mr Lightman.

He added that it was vital that enough information and guidance on the new options was made available to schools.

The government hopes that if the programme is successful in the digital sector, it could be extended to other industries.

Speaking purely in economic terms: a degree is an investment, where you put some money in now, and then you get some benefit later. The benefit will be in a higher salary than if you didn't have a degree. This benefit ought to offset the cost, otherwise you shouldn't do a degree. The future higher salary is paid for by the employer; in this way, employers already pay for university education, by offering higher salaries to those with degrees than those without. What this scheme is doing is shifting the payback period, from after you qualify, to before.

The problem with education funding is 3-fold:
1) Potential students lack access to sufficient capital to pay the course fees + living costs for the duration of their studies
2) Students forego 3+ years' income in order to do a degree, adding to the overall cost of the degree
3) There is no guarantee that the benefit of higher salaries from employers will outweigh the costs above

The above scheme tackles all three of these things. Tuition fees are paid for entirely by the government and employer. The paid job during the course means not only that the student doesn't forego as much wages, but also is able to pay for living expenses themselves. And since the scheme is tied to an employer and graduate programme, there is a guarantee that there will be a benefit at the end of it.

As I said, economically speaking, this is just moving the payback period 3 years sooner. But this has dramatic effects on the economic calculus of university education. Hopefully this will open access to poor kids who otherwise wouldn't be able to afford a degree.

So there's the upside, where's the downside? What am I not seeing?

 

[Tahuti]

I can see plenty of things where this could go wrong.

First of all, if you know can learn and maintain the necessary knowledge for a job without a degree, why bother having a degree at all? (I still maintain degrees never should be considered necessary for non-academic, non-medical areas)

Second, it will be potential cheap source of labour for large companies who can then dump all those people when they have graduated.

 

[Bamspeedy]

So there's the upside, where's the downside? What am I not seeing?

Students: Locked to an employer for three years?

Business: Paying them more than their worth for three years. Seems like they may be stuck with someone they may not like for three years, as it may not be so easy to get rid of them. They may normally only want to keep employees who do an A or B quality work but perhaps the government rules might say they can only get rid of them if they are doing D or worse quality work.

Government: More expense, more taxes, more bureaucracy, yay.

 

[Mise]

I suppose, when I say "downside", I don't mean the apparent downsides to the individual/employer of opting for this scheme over the traditional route, but rather the systemic downside of this as a model for funding university education. So I'm more talking at the policy level, than the individual level. For example, the downside of minimum wage laws as a policy is (potentially) higher unemployment, less tax revenue, and lower economic growth. The downside for individual businesses are obviously higher costs; downside for individual workers is (potentially) jobs replaced by robots. So I'm not really asking why someone wouldn't choose this over a traditional route, or why an employer might not want to enter this form of apprenticeship scheme, but why this policy might be bad for the nation, or why this model of higher education funding might be net negative for HE as a whole, etc.

@Bamspeedy, the gov't might end up paying more, or it might end up paying less as a better educated workforce will generate more growth and pay more taxes in the long-run. I don't know whether there are any studies on the present value marginal economic product of university education, but in theory you could subtract that from the cost of this scheme to the government to work that out properly. But yeah, that's something I've missed. EDIT: A quick google gave me this: http://www.rsc.org/images/EconomicBenefitsHigherEducationQualifications_tcm18-12647.pdf "It currently costs the state approximately £21,000 to provide education to degree level for the average graduate. However, the value to the state in terms of the tax and national insurance associated with earning following qualification is approximately £93,000 (paragraph 5.19)." (From 2005, so nearly a decade ago, but hopefully still relevant.)

@Kaiserguard: I don't accept that it would be a potential source of cheap labour, since they would be paying, on top of their wages, 1/3rd of their tuition fees as well. And all this for part time, untrained workers who will be attending lectures for most of their day. Furthermore, the thing is voluntary, so it's not like workfare schemes where unemployed people are forced to take low-paid and useless "apprenticeships" or have their benefits withdrawn.

Your first criticism isn't a criticism of this particular scheme, but of higher education in general. So it would be a criticism of any attempt to increase the number of people attending university. If you believe that then fine, but I'm asking for downsides of this particular funding model over other funding models, the goal of which being to increase the number of people who can afford to attend university.

In any case, it's not a well formed objection: if there was a policy that made university education 50% more expensive by charging students 50% more in tuition fees, and then taking all that extra money and burning it, you would be in favour of this, because the extra cost reduces university attendance (which you see as unnecessary outside of academia and medicine). Similarly, if such a policy was already in place, where 33% of all tuition fees were simply burnt, you would be opposed to scrapping this money-burning policy, because it would enable more people to waste their time attending university. The upside that I've described is reducing the inherent inefficiency of investing in education: the inefficiency stemming from the benefits and costs being misaligned in time. I have argued, in other words, that this policy reduces money-burning by some amount: it reduces the waste that results from the inefficiency of existing funding models. Your objection is an objection to reducing waste. If you don't believe that the policy reduces waste, then you aren't providing a downside: you're arguing against the existence of an upside. If you believe that the policy reduces waste, but that university per se is wasteful, then you should still favour a policy that reduces waste in a wasteful system.

But anyway, that's beside the point. I'm really asking for downsides of this funding model vs other models.

 

[Tee Kay]

The downside is that this was not available to me.

Kids these day *old man rant*

 

[warpus]

I did something like this for school and it was great. In our system I was only tied to an employer for 4 months at a time (1 term) unless they liked me and I liked them and so on. Every other term was a work term and every term in between that was a school term. For 5 years.. and no vacation, at all. Just a continual school/work/school/work/etc.

Instead of having tuition paid for though, they paid us directly. At my first job (about 15 years ago) I was getting paid $700 a week before taxes. This was an amazing wage for someone my age and experience. It was enough money to pay for tuition for next term, as well as a sizeable portion of rent, most books, some food, etc. It didn't pay for everything, but almost everything. Each subsequent term I made a bit more. When I was finished school, I only had $12k in school loans - the amount I had to borrow to get by during year 1.

The other upside was the experience.. I worked at large companies, at small companies, at startups, at banks.. on random programming languages, various projects.. By the time I was done school I had enough experience to have a decent time trying to find a job. I had also worked at enough places to have a much better idea what kind of job I wanted and how to narrow down "programming" to something a bit more specific.

At the time this internship program was lauded as the biggest in the world. Companies from all over the U.S., Canada, Europe, caribbean islands, other random places all around the world, came to our university to look for recruits. Bill Gates famously made this program a top destination to find future employees. There were a LOT of job postings, especially if you were in computer science of engineering (the two fields the university excels at).

So it was awesome for me. No downsides other than the "no vacation" thing. I had an interview over satellite with EA sports to work on FIFA soccer. I didn't get the job, there was wayyyy too much competition, but.. it was an awesome experience. The whole thing was. I would recommend it to everyone who is capable of being a part of something like this.

I'm not sure if the model described here is similar, but it seems to sort of be. If it's set up as equally competently as what I experienced, then I don't really see many downsides. Student wins, company wins, university wins. People who loan money to students lose.

 

[Traitorfish]

Maybe I just assume the very worst of any Tory policy*, but there's a slight whiff of indenture about this. It's hard to imagine that the party of Law & Order could develop a scheme which binds workers so tightly to employers without some disciplinarian thread to their thinking.

But, as Mise says, it could just be that they're trying to improve economic growth through a roundabout subsidy to the tech sector. No need to assume sinister schemes where sheer pragmatism will do. It's not as if it's a particularly socialistic program: the state funnels money into one profit-orientated institution, the university, on behalf of another, an employer; all very much in keeping with the peculiarly Thatcherite interpretation of small government.

*Answer: yes.

 

[Mise]

Yeah, I'll be honest, I really was looking for the gotcha moment, for the other shoe to drop. I just couldn't find it. Maybe I'm getting old.

 

[uppi]

One could argue that due to the additional work load, the quality of education will suffer. So a graduate of this program might end up less well educated than he could have been. But it is certainly better than getting no education at all.

I do not think you want this as default for all students, but it is certainly beneficial to provide an education for those who would not have received it otherwise.

 

[Tahuti]

Your first criticism isn't a criticism of this particular scheme, but of higher education in general. So it would be a criticism of any attempt to increase the number of people attending university. If you believe that then fine, but I'm asking for downsides of this particular funding model over other funding models, the goal of which being to increase the number of people who can afford to attend university.

That, you have perceived correctly. Because if you can bust the contemporary view of higher education, everything which' premise is based on that, falls with it, including this funding scheme.

 

[GenMarshall]

The downside is that this was not available to me.

Kids these day *old man rant*

This.

This idea arrived way too late for me.

 

[bhsup]

I realize you're curious about downsides to the funding model, but something else hit me as a big potential downside. If businesses are given more and more power over higher education through this, can't you envision a time when businesses start saying something like, "you know, we think time would be better spent having a semester on sexual harassment in the workplace so we don't have to deal with that training. Drop that silly requirement for 'X' which is irrelevant to our business and implement this instead."

'X' being whatever. History, art appreciation, whatever makes the college experience a well-rounded education instead of just a trade school.

 

[Mise]

B that's exactly what I'm looking for. To what extent will employers start "owning" courses and universities? And is this really such a bad thing? I hadn't thought of that.

 

[Gigaz]

Such apprenticeships are widespread in Germany and work very well, so this is not quite experimental.

 

[ori]

Such apprenticeships are widespread in Germany and work very well, so this is not quite experimental.

This. Though as they mostly do not officially confer academic degrees but degrees in practice similiar or identical to anglo-saxon bachelor degrees they are evil and need to be gotten rid of according to OECD - they stand after all in the way of increasing the percentage of academic degrees in the population .

 

[really]

I am struggling to find a negative in this too.
I trained as an accountant through a structured graduate program similar to what is being discussed.