Has there ever been a worse time to leave art school and to establish yourself as a young talent? Students now preparing to display their work in this summer’s degree shows must view their prospects in credit-crunch 2009 with gathering alarm.

Even at the Royal College of Art, the only postgraduate university of art and design in the world, everyone feels apprehensive. The average age of students at the RCA is 27 and when they come here – from more than 45 countries – most have already spent four years at other art schools. But most are also struggling with debts of £20,000 when they leave the RCA. Although they want to sell their work at the graduate shows, who is going to buy in such a climate?

Sir Christopher Frayling, the RCA’s rector, remains upbeat. Looking out from his office window towards Kensington Gardens, he said: “You’ve got to believe in the future, otherwise you wouldn’t get up in the morning. In recessional times the arts become particularly important, and there’s a new seriousness in design. We don’t want to produce gaudy baubles for rich collectors.”

Frayling is about to leave the college after a career stretching back to 1972 when he was a tutor, but he is excited about the RCA’s future. Handing me photographs of a new development in Battersea, where architects Haworth Tomkins have designed a £21m building for the college, he explains that “for the first time, all the fine art departments will be united. It’s the ripening tomatoes principle: you put them together and watch them grow. Sculpture is there already, Painting is moving in the autumn. So I’m going out on a high. We raised the money just in time, and a great moment came when our painting by Francis Bacon was auctioned for £8m – he gave it to the college in lieu of rent for a studio.”

But how do his students feel about the future, and what kind of work are they producing in this deeply uneasy year? Are they as dissatisfied as Tracey Emin, who graduated from the college 20 years ago when Britain was suffering from another slump? I asked Emin, whose new show opens at White Cube this month, how she remembered her time in the painting department.

“I was quite unhappy at the Royal College of Art”, she said. “Mainly because I was very unhappy at the time. It was a total shock moving to London and I felt very isolated. I graduated from a printmaking degree and the reality of having only two years to learn to paint was very difficult.” On the plus side, Emin recalled that “there were tutors who gave me a lot of encouragement”. But “I found the whole atmosphere quite stifling. I would go into college about 10.45am and I would leave at 10pm. But still, at the end of the two years, I was more disappointed in my degree show than anybody else. I remember thinking on the opening night, ‘If only I could have had just one more year.’ ”

But the Royal College has changed enormously since conceptual artists Jake and Dinos Chapman studied there. Jake said: “Dinos and I do remember thinking that somehow we had ended up in a [private] school, surrounded by silver-spooned flotsam and posh c***s who deserved no place in art school let alone on the face of the f***ing earth. Apart from that it was as nice as could be expected.”

No trace of private school complacency can be detected today as the students prepare for their graduation exhibition. As one walks through the immense gallery space where Show RCA One will open on May 29, the atmosphere is full of purposeful action. Amid clusters of step-ladders and heaps of wooden planks, an excitable and hirsute student skids across the floor with the practised ease of a dancer. He is Hector de Gregorio, from Valencia, and one of his big, dream-like prints shows a prancing man in period costume sticking out his long, pink tongue as he hovers above a panorama of medieval London (pictured right). Jo Stockham, head of printmaking, smiled as she said: “Hector is not the only student interested in dance. Sabina Donnelly is a performance artist, and she recently staged a spectacular new version of Matisse’s great ‘Dance’ painting with all the performers wired up so that you could hear their heartbeats.”

The students whose work I see on my tour of the college often turn out to be obsessed by dark, ominous visions. On floor six, where notices in the screen-printing studio convey stern warnings such as “Eye protection must be worn”, Rhys Himsworth is busy making constructions of an outstretched hand trapped in a tangle of wires and machines. Frederic Morris’s work is even more alarming, with his nocturnal scenes of ghostly figures clustered round a ramshackle shed where some haggard phantoms have found shelter.

The work in the painting department proves equally haunting. David Rayson, the head of department, shows me round the labyrinth of cramped studios and explains that “we’ll have so much more space when we move to our new Battersea building in the autumn”. But lack of room has not prevented Hannah Dougherty from making an immense, multimedia installation where a giant elephant is stranded perilously on a star-spattered ball near a strangely solid, depressing sculpture of a rainbow.

Plenty of students seem preoccupied with such bleak, end-of-the-world images. And Rebecca Parkin has produced a painting where an unshaven man, battered and bedraggled, crawls wild-eyed from a turbulent sea. I guess that the world beyond his island seems in danger of imminent, apocalyptic destruction.

‘Show RCA Sculpture’, May 28-June 7
‘Show RCA One’, May 29-June 7
‘Through the Wall’, June 17-25
all details from www.rca.ac.uk
‘Tracey Emin’,White Cube, London W1, May 29-July 4; www.whitecube.com

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