With the English (as in, in England) A-Level results out yesterday, media outlets are giving room to discussions about the financial return offered by a university degree.
Whilst it seems – intuitively at least – likely to be correct that graduates earn more, since the introduction of, and subsequent increase in, tuition fees, ministers have been under pressure to quantify the benefits more specifically. As C4’s Cathy Newman points out in this very interesting 2010 piece, the factual basis of successive government claims in this respect looks uncertain.
Today, Professor Ian Walker of Lancaster University has been giving media interviews to flag his co-authored report into degree ‘returns’. It seems likely that his figures (£160k lifetime earnings benefit for male graduates, £250k for female) will form the basis for future comments by ministers – it’s a welcome and fulsome piece of research.
The media’s been understandably emphasising the gender difference. This seems to be largely explained by the lower earnings of female non-graduates.
However, it’s a different detail that has caught my eye.
In the report’s Abstract, Professor Walker and his co-author Yu Zhu note that “the effects of fee rises is dwarfed by existing cross-subject differences in returns”.
In other words, the notion of a generic ‘graduate benefit’ is largely an incoherent nonsense. Medicine graduates will routinely earn six figures while still in their 30s. Other subjects may show little benefit, or even none at all.
If a decision to attend university is motivated by financial benefit, then any meaningful calculation of such benefit can only be made with reference to the returns provided by a specific course in a specific institution. The data required for such a calculation simply don’t exist.
It’s cheeky, at best, of some universities to use such a generalised notion of financial return to imply the likely financial benefit provided by particular courses at those institutions – the academics at such academic institutions must know such claims are baseless. It’s deliberately misleading, even.
It seems to me that the area we should give more thought to in the round is the returns generated by institutions and courses that require relatively low A-Level grades. Often, this is where the ‘financial benefits’ argument is most aggressively touted and yet it’s where the case is most arguable.
An individual entering full-time work directly from A-Levels and who stays in work until, say, 22, will earn perhaps £60k over that period. An individual entering work at 22 from university will have, let’s say £40k of debt (these figures are my own loose, commonsense estimates, of course). Of course, many students do part-time work while at university and there are other variables involved.
And yet, it seems that where an 18 year old with modest A-Level results has a choice of a job-offer or a place on a course with relatively low A-Level requirements, choosing the job could make them £100k better-off by the age of 22.
I’d be interested to see figures from institutions demanding lower-grades that either contradict me or show how that the £100k will be made up over the rest of their graduates’ lifetimes.
As a constituency MP, I’ve always been struck by the huge and measurable benefits 18 year olds can acquire through programmes where colleges act in partnership with employers (like this one between Forth Valley College and large local employer, Ineos). These partnerships involve real jobs, as against loose claims by some higher-education establishments about the financial benefits provided by their ‘vocational’ degrees.
There’s a lot to be unpacked in all of this. But we should be doing that with more gusto. Professor Walker’s research certainly helps in that respect. Encouraging 18 year olds to attend university on the basis of future financial benefit need to be much more carefully evidenced – too often now it’s simply a cheap PR stunt.