2 days ago
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Is a university degree still worth it? That question has been asked for decades but with increased frequency over the last 10 years, as the cost of taking a degree has shifted from government to graduates.
The short answer is: yes it is, according to experts such as the Institute for Fiscal Studies (IFS). But as undergraduates in England now finish their courses with tuition and maintenance loans averaging £53,000, the longer answer is that it’s complicated.
Every graduate’s earnings are affected by other factors: how wealthy their family are, how well they did at school, as well as gender and ethnicity. But some factors can be changed, namely where they go to university and what course they study.
And to make it more complicated, there are the non-financial benefits such as evidence of longer lifespans and better personal wellbeing than for non-graduates.
Prof Bobby Duffy, director of King’s College London’s policy institute, says: “There is still a graduate premium that is somewhere on average between £200,000 to £400,000 in lifetime earnings, depending on a lot of things.
“It’s a complex area, there’s lots of variation within courses. But on average you still earn more over your lifetime than the costs of going to university and the lost earnings [while studying]. That’s the pure financial case.
“There’s also all the work that’s been done on the personal benefits and societal benefits of university. There’s substantial evidence of independent benefits on skills development, self-esteem, sense of wellbeing, civic engagement and openness to diversity. And then there are ultimately benefits to health and longevity that are not explained by other things but are explained by university attendance. And that leads to benefits to society.”
But Duffy points out that the financial element of the graduate premium has declined over time. That shouldn’t come as a surprise. At the start of the 1960s only about 4% of school leavers entered higher education, rising to nearer 14% by the end of the 1970s.
Fifty years later, more than one in three students go directly into higher education from school, and they are joined by more of their peers in the years that follow, so that Tony Blair’s aim of 50% of young people experiencing higher education by the age of 30 has been achieved.
Andy Westwood, professor of public policy at the University of Manchester and a director of the Productivity Institute, says: “Inevitably with that growth you’ve seen a diversification in the types of institutions and experiences, and their [financial] returns. It’s not as if every option is going to work for everybody but a lot of options will.”
New graduate choice data supplied to the Guardian by the Higher Education Statistics Agency (Hesa) shows wide variations in terms of university and course satisfaction, in surveys taken after entering the workforce.
Those who graduated in 2023 in medicine and health sciences courses, including dentistry and midwifery, were the most satisfied with their choice of course, followed by architecture, computer science and construction courses. All of the top 10 are degrees with a vocational component that offer good employment prospects. Those who studied journalism, marketing or social work were the most likely to regret their choices.
Graduates of Oxford were most satisfied with their choice of institution – but in second place comes the University of Sheffield, which was more popular among its graduates than some other universities that come higher in the Guardian’s overall rankings, such as Cambridge or the London School of Economics.
Tony Blair’s assumption was that funding more people to go to university would itself create higher growth. But the UK’s regional inequalities and 15 years of flat or low wage growth have proved it wrong. “Universities and their graduates are not going to be immune from those wider problems,” Westwood says.
He argues that the current system places a lot of power into the hands of 17- and 18-year-olds, and their families, to choose from a wide variety of courses, some of which offer attractive careers with high pay and some of which don’t, sometimes from the same university.
Economics degrees typically offer some of the highest pay for recent graduates but especially for those from select universities, with graduates of Cambridge, the LSE and University College London at the peak.
The top seven universities see their economics graduates paid more than £60,000 five years after graduation. But the bottom seven institutions show earnings of £35,000 or less.
Even a good degree in English from a UK university only leads to average salaries of £33,000 five years after graduation. But those averages can conceal further variations affected by gender and family background, with the value of a degree based on what non-graduate peers with the same exam grades earn.
Research by the IFS revealed a paradox, that those with the lowest graduate earnings also received the largest boost to their earnings from attending university, such as students from the most deprived backgrounds. “The reason is that the earnings prospects of these groups are very low on average if they do not attend university,” the IFS says.
But it is the graduate’s own decisions about career paths that have a major influence over what they earn. Rachel Beauchamp, an employability coach at the University of Lancaster’s careers advisory services, says she helps humanities graduates understand that they have gained valuable, career-enhancing skills that go beyond the specific subjects such as history or English they have studied.
“Employers are coming to me saying that they want students who can analyse complex problems, who can see different perspectives, and who can connect ideas in new ways,” Beauchamp says. “It’s about encouraging our students, and society to some extent, to see the value of humanities subjects, for their critical thinking, creativity and cultural understanding. Those are the human skills that are developed through those subjects.”
