Poly vs Private degrees: It’s not the money that matters

Oct 14, 2016 04.29PM |
 

by Suhaile Md

IF A Polytechnic graduate cannot clinch a spot in one of the public universities, should he pursue a private degree?

“At least get a degree!” may seem like an obvious response. But it’s not that straightforward. The Council for Private Education (CPE) released the results of the first ever private educational institutes (PEI) graduate employment survey (GES) last month (Sept 23). And the numbers may give some pause.

The median salary of a PEI graduate in 2014 was $2,700. A separate GES conducted by five polytechnics (results published in Jan 2016) showed that the median salary of a Polytechnic graduate in 2014 – who completed national service – was $2,400. The five are: Ngee Ann Polytechnic, Singapore Polytechnic, Nanyang Polytechnic, Temasek Polytechnic and Republic Polytechnic. 

Additionally, 58 per cent of PEI graduates secured full-time jobs within six months after completing their final examinations in 2014. As for polytechnic graduates, 59.4 per cent secured full-time jobs.

With no particular advantage when it comes to securing a job, does closing the $300 wage gap alone justify the cost of a private degree? It does not come cheap and unlike public universities, fees are not subsidised by the G. 

For instance, a three-year honours degree in Mechanical Engineering at the Management Development Institute of Singapore costs nearly $40,000. Students can complete the same degree in two years if they can get exemptions based on their diploma coursework. If so, they pay about $27,000. The degree is awarded by Northumbria University from the United Kingdom. PEIs act as satellite campuses for multiple foreign universities.

A three-year Economics degree at the Singapore Institute of Management (SIM) can cost anywhere between $26,000 (University of London degree) and $69,000 (University at Buffalo degree). To be sure, students can get course exemptions and many of them do – especially at the University at Buffalo (UB). Still, they pay at least $34,000 for the whole course. UB is particularly expensive because at least half of their modules are taught by faculty who fly in from the main campus in the United States.

Post-subsidy fees cost just over $24,000 for a three-year Economics degree from the National University of Singapore (NUS). And it costs $32,200 for a four-year Mechanical Engineering degree from Nanyang Technological University (NTU). Both NUS and NTU are public universities. While the costs seem comparable, public university graduates had a median income of $3,200 in the same period.

The cost of the degree is not just in terms of school fees. What about the income you lose out on while studying? Working for three years with a monthly salary of $2,400 comes up to $86,400. So even if you earn hundreds of dollars more per month because of your Economics degree for example, it can take a long time to recover the cost as shown in the table below*.

 Income lossSchool feesTotal financial costTime to recover cost
Private university degree (3 year course)$86,400$26,000$112,40031 years
Private university degree (2 year course)$57,600$27,000$84,60023 years 6 months
Public university degree (3 year course)$86,400$24,000$110,40011 years 6 months

*The calculations above are purely illustrative and assume that there is no job progression or pay rise over the graduate’s career. They also assume that the wage difference remains constant throughout one’s career.

 

To be sure, more data is needed in order to make a fair comparison. What is the career progression for a diploma holder, a PEI degree holder and a graduate from NUS for instance? Does the income gap increase or decrease over time? Are promotions even dependent on your educational background? You can read the issues on the data – or lack of it – here.

But while it does not seem to pay off financially, there are other considerations which raises the question: Is it worth it to attend a PEI?

 

YES

It was “a fresh start”, said 28-year-old Mr Andrew Yeo. His grade point average (GPA) of 1.94 out of 4.0 “barely” got him a Diploma in Multimedia and Animation in 2008, he added. After completing national service (NS) in late 2010, Mr Yeo faced three choices: spend three more years on another diploma, start work, or enrol in a PEI.

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Mr Andrew Yeo felt that his private degree paid off in more than monetary terms. Photo: TMG file

 

Three additional years in polytechnic did not make sense when he could get a degree in the same amount of time. As for working? By then “I wasn’t keen on pursuing a career in the field of multimedia and animation,” said Mr Yeo. Besides, with his dismal diploma grades, he would not have been able to command a salary anywhere near the average income his peers made, he added.

So Mr Yeo enrolled at SIM in 2011. He studied for the Sociology degree awarded by UB and has not looked back since. Not only did he graduate summa cum laude in mid-2013, he was also valedictorian and had received the SIM academic excellence award for scoring the highest GPA in his cohort – 3.95 out of 4.0.

He applied for various Master’s programmes in the UK and Europe as he was thinking of entering academia. Mr Yeo even scored a full-scholarship to study at the Central European University in Hungary. But he decided to study Social Policy and Planning at the famed London School of Economics and Political Science (LSE) in the UK instead.

From barely passing his diploma to award-winning student. What changed? Simply put: mindset.

I wanted to make the most of my second opportunity

There were other diploma holders in his batch who “did reasonably well” with high GPAs (3.5+) but “could not be bothered” to work hard as they missed out on a place in the more prestigious public universities, he said. There’s a perception that it’s “better to do badly at an Ivy League or golden triangle university than to do extremely well at SIM”, added Mr Yeo. The golden triangle universities refer to elite universities found in the cities of Oxford, Cambridge and London in the UK.

Clearly Mr Yeo did not subscribe to that view – “I wanted to make the most of my second opportunity”, he said.

In 2014, Mr Yeo started work at the Institute of Policy Studies as a research assistant. It was his first job. He spent nearly two years there before moving on to his current role as a consultant at the public relations firm, Finsbury.

When asked if he had any advice for new polytechnic graduates, he replied: “Recent surveys may show the income gap [between PEI and Polytechnic] to be narrowing, but there are also non-financial reasons to study at a university. It’s an opportunity to enter a new field of study… [or a chance for late boomers] to blossom. Basically, understand your priorities.”

 

NO

“A degree is not relevant to me,” said 29-year-old financial consultant Mohamed Farhan.

Mr Farhan started job hunting in 2010 after serving his NS. With his Diploma in Business Studies from Ngee Ann Polytechnic at hand, he thought he would be able to work in the field he specialised in during his studies – marketing.

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Mr Mohamed Farhan said that a degree was not relevant to him – professional qualifications are more applicable. Photo: TMG file

 

But the job openings he qualified for “were mostly admin assistants”, said Mr Farhan. The job scopes were “too vague” and you could end up doing “everything and anything beyond administrative work”, he added.

Furthermore, he had set himself two criteria before embarking on his job search: “I wanted it to be meaningful. Plus, if I could not see myself spending three years there, then I won’t take the job,” he said. Eventually after six months, he found the perfect role he could spend the next three years in – or so he thought.

Within a month of joining Pertapis Boy’s home as a youth worker, he realised he was not cut out for it. Part of his job was to “ensure discipline” and make sure the youth followed “their daily routines”, he said. Mr Farhan added that he was “basically a warden” and due to his “soft-hearted” nature, the role did not suit him – he wanted out.

So Mr Farhan reached out to friends for help in finding a new job. It was then that he was introduced to financial consulting. He found the work meaningful and saw himself spending the next few years. In May 2011, he qualified as a financial consultant.

The early days were not easy. As his salary is based on commission and he was new to the role, he barely made $7,200 a year. With more experience now, he earns over $25,000 a year. He expects his income to rise as he gets better at his work.

When asked if he would pursue a degree in banking or finance, Mr Farhan laughed. His mother had, for years, wanted him to pursue a degree. But he told her times had changed. “A degree is just theory. But a professional qualification is both theoretical and skills based. Hence more relevant and applicable to me,” he said.

He is now aiming to be a Certified Financial Planner (CFP). “It’s the industry standard and my mentors are coaching me according to the CFP framework,” he said. 

As for advice for new polytechnic graduates, Mr Farhan said: “Identify the base qualification for the job you want. Is it a diploma or a degree? After that, pursue professional qualifications relevant to your line of work. For example, do you really need a master’s unless you want to be in academia?”

 

This article is part of a series on SkillsFuture, in collaboration with MOE and SSG. Read the other pieces here:

2. Private degrees: data needs to tell a fuller skills story 

3. 5 new jobs that didn’t exist a decade ago

4. SMACK IN THE MIDDLE: Keys to success

5. 5 skills employers want you to have in tomorrow’s job market

6. Don’t underestimate ‘soft skills’ in your career

7. 50 Faces: What is success to you?

 

 

Featured image by Sean Chong.

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