Is HE still worth it? Gemma Ludgate, Head of C2

Report
Graduate Destinations ...
Is HE still worth it?
Gemma Ludgate
Head of C2 Education
The Careers Group
University of London
Today’s session
 Grad Vs Non-grad: earnings and employment
MOOCs
Loan system
Key factors
 HEI
 Subject
 Grade
Conclusions (?)
Resources
Grad Vs Non-Grad: Now
BIS Labour Force Survey: Q1 2014
 87.3% of young graduates are employed compared to only 62.1% of young
non-graduates.
 57.4% of young graduates are in high-skilled employment.
 86.7% of working-age graduates are employed compared to only 66.3% of
non-graduates.
 The median nominal salary of working-age graduates is £31,500, while the
median nominal salary of working-age non-graduates is £20,750.
 92.4% of graduates aged 25-30 are employed today, compared to 93.4% in
Q1 2008.
Grad Vs Non-Grad: Future
“Employers expect to hire 18% more
graduates in 2014, up 4.3% in 2013”
“Increased activity has failed to translate
into higher graduate starting salaries:
65% have not increased their rates for
2014”
“The stagnation of graduate salaries is
seen as an indication that the supply of
graduates remains high”
* 2014 annual report from Incomes Data Services
Grad Vs Non-Grad: Distant future?
“Many of the jobs expected to drive
economic growth in the future will not
necessarily require a traditional
academic pathway.”
“In 2022, the top three in-demand
occupations will all be in health and
care; nearly three million workers will be
required in hospitals, care homes and
the community”
*Commissioned by The Edge Foundation: ‘dedicated to
raising the status of technical, practical and vocational
learning’
Grad Vs Non-Grad: earnings
“Men with a degree earn 28
per cent more than those
without one, while for women
the differential is 53 per cent.”
“A degree will earn graduates
an extra £252,000 over their
lifetime for women and
£168,000 for men”
*BIS, The Impact of University Degrees on the
Lifecycle of Earnings: Some Further Analysis, August
2013
Postgrad premium
“There is a significant wage premium for those with postgraduate
qualifications. Somebody with a Master’s can on average expect to earn
£5,500 more a year – or £200,000 over a 40 year working life - than
someone only holding a Bachelor’s degree.”
“The overall wage premium for staying on in higher education after
acquisition of a first degree and obtaining postgraduate qualifications is
increasingly more lucrative over time.”
* The Sutton Trust, February 2013
MOOCS: A (free) alternative?
Student loans
"We estimate that 73% will
have some debt written off at
the end of the repayment
period, compared with 32%
under the old system. The
average amount written off will
be £30,000.“
“Due to above inflation interest
45% of graduates will pay back
more than they borrowed in
real terms”
*Institute for Fiscal Studies (IFS), April 2014
Other factors: HEI
Russell Group Vs non Russell Group (2011)
 Unemployment: 7.86% Vs 8.68%
 Average FT salary: £25,7k Vs £23,2k
Hussain et al (2009): the effects of HEI quality on
earnings is statistically significant, but small compared
to the overall return to higher education average –one
standard deviation in HEI quality results in a 6%
earnings
Other factors: subject choice
*The Complete Universities Guide
Other factors: degree result
 Grads who failed to get a 2,1 or
1st earn around £80,000 less
(over a lifetime)
 LSE, June 2013: those with 2,1 degrees earned
£2,000 more per year after graduation.
(Very!) Tentative conclusions
Graduate ‘premium’ exists
But ... Students should consider the status of the HEI,
the course they are thinking of and aim to get a 2,1
But ... A 2,1 isn’t enough on it’s own! Work
experience and extra-curricular stuff matters
... Make the most of uni careers services!
Final thoughts from the horse’s mouth
A May 2013 survey of 500 Fresher's (studentmoneysaver.com)
showed that:
 Although 58.4% felt their first year wasn’t worth the £9000,
86.2% would enrol into university if they had to make the choice
again
 84.4% would recommend university to someone considering it
 1.6 % expressed dissatisfaction with every aspect of their first
year
 20% of comments mentioned the university ‘experience’ as partjustification for the cost.
The Careers Group believes that all information provided in this publication is correct at the time of publication. Copyright © The Careers Group, University of London. 24 June 2013.
Useful resources
http://www.london.ac.uk/challenge.html
http://unistats.direct.gov.uk/
http://wlgd.thecareersgroup.co.uk/
www.prospects.ac.uk/
The Careers Group believes that all information provided in this publication is correct at the
time of publication. Copyright © The Careers Group, University of London.
References
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Loan repayments: www.bbc.co.uk/news/education-26954901
Postgraduate premium: www.suttontrust.com/public/documents/postgraduate-premium-report-1-.pdf
Graduate premium: www.timeshighereducation.co.uk/news/graduate-premium-is-nearer-200000-saysnew-report/2006574.article
Graduate premiums by subject: www.thecompleteuniversityguide.co.uk/careers/graduate-salaries-andthe-professional-premium/
Factors in earnings:
www.gov.uk/government/uploads/system/uploads/attachment_data/file/229498/bis-13-899-theimpact-of-university-degrees-on-the-lifecycle-of-earnings-further-analysis.pdf
Degree result and earnings: www.telegraph.co.uk/education/educationopinion/10098882/No-degreegrade-guarantees-you-a-good-or-bad-salary.html
Improving graduate jobs market for 2014: www.theguardian.com/money/2014/jun/02/uk-employers-tohire-18percent-more-graduates-2014
Potential rise in importance of vocational qualifications over academic pathways:
www.theguardian.com/education/2014/jun/04/vocational-education-image-vq-day-further-education
Graduate verses non-graduate employment now: www.gov.uk/government/publications/graduateemployment-figures-from-the-labour-force-survey-january-to-march-2014

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