COVID-19 Has Reduced The Opportunity Cost of Higher Education

Global Recession

While some industries such as streaming services, eCommerce and delivery services are booming due to the current Covid-19 pandemic, most other businesses are taking a hit. Most notably, those in the business of air travel and tourism. People are travelling so much lesser these days that the price of crude oil has now become negative.

Falling Through the Cracks?

Fresh graduates are one of the groups that are most screwed over by the Covid-19 pandemic, especially if they haven’t already secured a job. Here’s why I think fresh graduates have it especially hard.

Firstly, many of the relief packages are focused on workers already in the workforce. The Temporary Relief Fund for example provides a one-off $500 payout to those who’ve had been retrenched or had a 30% drop in income, which fresh graduates will not qualify for. Female fresh graduates or males who went to junior college are probably under 25 and also aren’t eligible to receive the second tranche of Skillsfuture top-ups.

To make matters worse for fresh graduates entering the workforce at this time, several research studies have found that graduating during a recession has long term impacts on income, health and even fertility rates! A study in the US found that women who encounter high rates of unemployment during their early twenties don’t just postpone having children, but they’re also likely to have lesser children in both the short and long term. Another study also found that there were long term effects on wages for graduates who decided to either accept lower wages or take up jobs with less attractive employers. Fortunately, the study found that these effects while persistent, weren’t permanent. However, it was largely dependent on the ability of the graduate to quickly find a higher paying job in the first years after the recession.

Opportunity Cost

The outlook is starting to look grim and the odds of being unemployed or underemployed are much higher now.

Before COVID-19, it was a jobseeker’s market but today, most companies have frozen their head counts and reduce their hiring. Senior management in certain companies like Singtel or SMRT have even resorted to taking pay cuts and there have been two rounds of pay cuts at Singapore’s national carrier, Singapore Airlines. But this also means that the opportunity cost of continuing studies instead of seeking employment has been significantly reduced.

Rather than risk being unemployed for a prolonged period of time or even underemployed, fresh graduates could consider taking up that makes higher level studies which could be an undergraduate or postgraduate programme. These programmes usually last between one to two years for postgraduate or three to four years for an undergraduate degree.

What the Autonomous Universities are Doing

It seems the autonomous universities in Singapore have also caught on to this. For example the National University of Singapore has announced that any of their fresh graduates who enroll into its Masters degree programs able to defer the tuition fee payment for up to three years with no interest. Furthermore, the Ministry of Education and the six autonomous universities in Singapore announced that all full time undergraduates graduating this year will be able to take up four continuing education training modules offered by their alma mater at no cost.

On top of this NTU has announced that it’ll top up an additional $1600 worth of credits so that their graduates can stack up enough credits to attain what they call a MiniMasters certification. This mini Masters has an academic load equivalent to half of a full Masters programme and can be counted towards fulfilling the requirements of a full Master’s degree which alumnus can complete at a later date.

James Cook University Singapore’s COVID-19 Support

At the Singapore campus of James Cook University, there currently is a Higher Education Access scheme which is offering a $10,000 study grant for Singapore residents planning to enroll into an undergraduate programme in the July 2020 intake and there’s also a Merit Scholarship which covers postgraduate programmes for those looking to take up a Master’s degree.

In the meantime, please stay safe and stay healthy.