Higher Level Apprenticeships: An Alternative to University or a False Binary Choice for Students?

Image - RUT MIIT

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The state of student finance has become a hot topic this month; with interest added now dwarfing annual loan repayments, most of us will struggle to make a dent in our student debt, let alone pay it all off. But what alternatives do young people have to a university degree? A study by The Centre for Social Justice (CSJ), backed by Andy Burnham and Michael Gove, touted higher level apprenticeships as a legitimate challenger, finding that individuals who chose a higher level apprenticeship typically earn £5,000 a year more than their university counterparts, five years after graduating, and £12,500 a year more than those with low-value honours. Resulting headlines of ‘half of all graduates would earn more as a higher-level apprentice’ are certainly eye catching, but are they ignoring some of the key barriers to opportunity and setting up a false binary choice for students?

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A higher level 4 apprenticeship is the equivalent of the first year of a university bachelor’s degree and offers training in careers such as marketing, engineering, and retail, whilst level 5 is the equivalent of a Higher National Diploma (or the first two years of a degree) and offers a wider variety of training including in healthcare and manufacturing.

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It’s definitely an exciting alternative; university graduates take on average £53,000 of debt at the time of graduation, and whilst it would be understandable that those who are on low income jobs would not be able to pay this off, it now applies to high income workers as well. Labour MP Nadia Whittome shared that despite being in the top 5% of earners in the country her total debt has gone down by just £1,000 after 6 years. This is the result of the ‘plan 2’ student loans, introduced in the coalition years, which saw graduates charged interest based on the RPI rate of inflation plus 3 per cent, meaning that interest added vastly outweighs annual loan repayments, given the jump in interest rates seen since 2022.

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Compare this to taking on a higher level apprenticeship. You gain an equivalent qualification with career relevant skills acquired, all whilst working towards a salary rather than amassing student debt. And in the most competitive job market ever recorded, experience in the workplace is more valuable than ever. This doesn’t only make a massive financial difference whilst undertaking the apprenticeship, but also in every pay packet you receive afterwards which will be without the hundreds of pounds in deductions that students face every month.

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Given the scale of student debt and the appeal of earning while learning, it’s easy to see why the CSJ’s findings has gained such traction, however, the report’s focus on the first five years of employment raise a significant issue. This of course being that higher level apprenticeships simply do not have the long-term data to instil a confidence that they can go toe to toe with university degrees, in terms of total career earnings. University degrees, whilst perhaps losing some value, are still a tried and tested route and until that long term data is available for higher level apprenticeships, we simply don’t know if they are a genuine alternative.

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What we do know, however, is that higher level apprenticeships are some of the most competitive opportunities out there. The 2023/24 academic year saw universities take on over 650,000 new students across the UK, whilst higher level apprenticeships come in at just over 120,000. A stark difference. And yes, whilst that number is rising (140,000 starts in 2024/25) and government policy is steering towards expanding this opportunity, that does not mean that those who now take on a level 4/5 apprenticeship will be afforded the same employment opportunities as those who came before them.

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The qualification and skill set that comes with a higher level apprenticeship are such a rarity that naturally employers will pay a premium, much like the position university graduates used to find themselves in before the value of the qualification dropped, as the number of individuals who obtained it increased. A qualification is only as valuable as it is scarce, and over expansion of these apprenticeships could leave us with the same problem seen today where graduates vastly outnumber graduate roles.

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Scarcity doesn’t just limit how many people can access higher level apprenticeships; it also shapes who gets through the door. The Social Market Foundation’s report on this issue concluded that “it is unclear the extent to which higher and degree apprenticeships have succeeded in providing alternative routes for disadvantaged students” and this is reflected in the statistics. Only 19% of higher level apprentices were from ethnic backgrounds, compared to 27% in further education. 14% of higher level apprentices were from the bottom fifth of neighbourhoods in the UK compared to 21% in higher education. A scheme originally introduced to widen access to higher education to those who previously thought it unattainable has now become one of the most socially exclusive programmes of all, stripping those from a disadvantaged background of the chance to expand on their opportunities.

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But it’s no surprise given the rising concerns around student debt that there is a middle-class grab happening for these opportunities. Those from privileged backgrounds who have greater access to the work experience that is valued in the application process are bound to get an offer over their less fortunate peers. What may present itself as a binary choice is in fact, for many, no choice at all.

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Ultimately, university remains the most accessible post eighteen path on the basis of socio-economic background, race, and experience, not to mention the fact that the social freedom that universities offer is something an apprenticeship will never be able to match. So whilst higher level apprenticeships offer an exciting alternative to university degrees, free of debt and perhaps a clearer path to employment, there is a long way to go before it becomes a genuine choice for all.