The benefits of universities are wide-reaching. They give opportunities, increase social mobility, stimulate economic growth, support public services, solve global challenges, equip graduates with skills for the future and offer significant returns on investment to the taxpayer.
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Between 2021 and 2026 universities across the UK will form 21,650 new companies and charities
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Graduates are around three times more likely to reach the top 20% of earnings at age 30 than non-graduates
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Between 2021 and 2026, universities will train 191,000 nurses, 84,000 medical specialists, and 188,000 teachers (463k public service workers)
Is going to university worth it?
- Graduates are around three times more likely to reach the top 20% of earnings (an annual income of at least £33,500 in 2018 prices) at age 30 than non-graduates.
- The earnings of graduates see much stronger growth than those of their non-graduate counterparts. Despite the majority being in study until their early twenties, by their mid-20s, median earnings of graduates overtake those of non-graduates at around £17,500 for women and £20,000 for men.
- 85% of women and around three-quarters of men will be financially better off after going to university – even after accounting for taxes, student loan repayments, and earnings they may have missed out on while studying.
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- Over their working lives, men will be £130,000 better off on average by going to university even after taxes and student loan repayments are considered.
- Over their working lives, women will be £100,000 better off on average by going to university even after taxes and student loan repayments are taken into account.
- At the age of 29 and after six years of work experience, incomes are on average 19% higher for graduate men and 24% higher for graduate women compared to people with similar characteristics that didn’t undertake higher education. This is based on measures such as similar prior attainment, region, and measures of disadvantage including free school meal (FSM) eligibility, school attended, and protected characteristics.
- A higher degree class is associated with higher earnings. Women who achieve a first-class degree earn 3.5% more and men 7% more than people of similar characteristics who achieve a 2:1.
- Nine in 10 graduates are in employment between their mid 20s and early 50s. Employment rates of people educated to GCSE level or below are far lower: among those in their 30s two in five women and one in five men are not in work.
- Graduates enjoy higher earnings, with the median 40-year-old graduate earning twice as much as someone qualified to GCSE level or below.
Publication
Universities and the UK’s economic recovery: an analysis of future impact
This report provides a forecast of the impact of UK universities over the next five years.
Do universities improve lives of people from all backgrounds?
- 71% of first in their family UK graduates said that going to university opened doors to companies for them.
- Those who were the first in their family to go to university had a slightly higher average starting salary than those who were not the first to attend; £30,111 versus £27,754
- Earnings of graduates at age 30 are higher for state-educated students from the poorest 20% of families than non-graduates.
- At age 40, women graduates from a state educated background earn 42% more than state educated women who didn’t go to university.
- Earnings are especially higher for British South Asian students in England. Among men, British Pakistani students have the highest lifetime earnings return from HE of around £220,000, almost double the overall average. For women, British Black African students have the highest average lifetime earnings return, at around £175,000.
How does a university degree improve earnings for disadvantaged students?
- University graduates who were eligible for free school meals are more likely to enter the top 20% of earnings at age 30 than free school meal students who did not attend university.
- Going to university reduces the gap in earnings between the most affluent state-school students and those eligible for free school meals.
How much do universities cost taxpayers?
- Higher education requires substantial investment from the taxpayer, but the UK public is more than compensated for their investment through increased tax revenues of graduates.
- Financing an undergraduate degree costs the government around £50,000 in tuition and maintenance loans and teaching grants. But the average gain to the public purse is £110,000 for men and £30,000 for women. It is likely these figures will be even higher after recent changes to graduate repayment rules.
How do universities power our public services?
- Between 2021 and 2026, universities will train 191,000 nurses, 84,000 medical specialists, and 188,000 teachers.
- Universities will attract £21.7 billion of national and international public funds to spend on collaborative research with businesses and non-academic organisations.
- Universities attract funding for local regeneration projects with significant economic and social impact. Between 2021 and 2026, these will have a value of over £2.5 billion in local places across the UK.
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Universities form new companies and charities. Between 2021 and 2026:
- Universities in Scotland will form more than 1,000 new companies and charities.
- Universities in Wales will form more than 1,500 new companies and charities.
- Universities in Northern Ireland will form nearly 150 new companies and charities.
- Universities in England will form 19,000 new companies and charities. These include spin-offs, social enterprises, and graduate and staff start-ups.