The average English graduate can expect to be £100,000 better off than their peers who didn’t attend university, but a quarter will be worse off, with subject choice significantly influencing future earnings, according to major new research from the Institute for Fiscal Studies (IFS).
Using data from a cohort of students who took their GCSEs in 2002 and applying today’s tuition fee, student loan and tax policies, the IFS has calculated that graduates earn “substantially more” on average than non-graduates in their 30s.
At age 37, median earnings among women who attended university are 56 per cent higher than among women who did not, and among men they are 28 per cent higher.
The research institute estimated that today’s average graduate can expect to be about £100,000 (15 per cent) better off financially than a similar young person who did not go to university, even after accounting for extra income tax, employee national insurance contributions and student loan repayments.
But the new research, commissioned by the Department for Education (DfE), shows that while there are significant benefits to undergraduate degrees on average, not everyone will be financially better off, with about 20 per cent of women and 30 per cent of men likely to experience a negative return. In response, ministers have announced a consultation will begin on whether to introduce minimum entry standards in the autumn, saying “too many franchised and poor-quality courses do not offer a good deal to young people”.
