Graduating with a degree of debt is no longer a laughing matter, students are facing ever increasing financial problems and with industry bodies complaining that today’s graduates are ill-equipped for business roles does a university education actually benefit anyone?

Thousands of nervous 18 year olds across the country recently collected their A level results, praying that they had achieved the grades that would enable them to go to their university of choice.

But NatWest’s 2006 Student Money Matters Survey reveals that school leavers hoping to start university this year should expect to pay £33,000 for a three-year degree course. This means that they will be graduating with almost £15,000 in debt – a 7% increase on 2005 figures.

Having made this financial commitment, and in many cases having worked part time alongside their degrees (40% of students work while studying according to a Times report), when they leave university they are going to face unprecedented competition for graduate jobs.

This juxtaposition of increased debt with fewer available employment options does beg the question: how can students feasibly justify the cost of their education when graduates jobs are not guaranteed?

The CBI and other industry bodies frequently highlight the skills gap in the UK, pointing out that many of today’s graduates are ill-equipped for business roles. In some cases, vocational degrees are helping to bridge this gap – 93% of Oxford Brookes University graduates, which offers many vocational courses, find paid work within six months of graduating, but what about the rest?

According to David Carroll, Director of Candidate Resourcing at recruitment group Angela Mortimer plc, there is a need for more flexibility and more choice for students. “The benefits of part-time study and distance learning opportunities should be highlighted to prospective students, enabling them to make an informed decision based on their potential career paths and access to resources,” he says. “These options could be fitted around employment so that students are able to study and support themselves concurrently. Systems such as these simultaneously combat the 'skills gap' and potential graduate debt.”

Having seen how difficult it has become for graduates to secure entry level roles with little experience or lack of perceived workplace skills, Carroll believes that more companies should become involved in helping students to develop vocational skills.

“Many businesses complain about the lack of graduate talent, where they should instead be taking proactive steps to open their doors to students, offering them part-time placements while they are at university. Such schemes would not only add value to their businesses, but also help develop the skills the graduates of tomorrow will need to succeed in their careers.”

A further benefit of arrangements such as these is that they help to retain talent within regional cities. If students are able to manage their debt at university while developing local business networks, they will be in a better position to find work after graduating. This will help to avoid the mass migration of graduates to popular areas such as London and the South-East.

Katie Bard Recruitment in Birmingham is currently pioneering such a scheme, helping student Damian Leese fund his way through Birmingham University. The 21 year old is working part time as a business coordinator supporting the recruitment consultants and acting as a point of contact for clients and candidates. The scheme was the brainchild of Katie Bard Divisional Leader Chris Knowles who had seen an increasing number of students graduating with huge debts and no work experience.

“There is a great deal of untapped student potential, with a small proportion of top graduates handpicked for roles by major employers, and incentivised with excellent deals,” says Chris. “The vast majority of good graduates are not able to access these opportunities, and find themselves struggling to obtain entry-level positions.”

According to Leese, this experience is not only making university financially viable, it has provided him with the valuable office skills he will need to secure employment in the future. “Working at Katie Bard has given me a great opportunity to learn valuable business skills, while at the same time earning enough money to keep my student debt in check,” he says. “When I graduate next year, I will be able to offer potential employers a full year of work experience on top of my degree.”

This sort of win-win scheme is rare. However, it could provide the answer to graduate spiraling debt and give busy small and medium sized businesses the business support they so desperately require if they want to retain their competitive edge.