Government Report Finds One in Four Graduates Financially Worse Off After University

A government-commissioned report estimates that one in four graduates will be financially worse off over their lifetimes because they attended university. Researchers compared people who took GCSEs in 2002 and later went to university with similar people who did not attend.

The study found university attendees earn about 40 percent more, or roughly £320,000 in today’s prices. After adjusting for background and school performance, the estimated benefit falls to £180,000. Much of that amount returns to the government through higher taxes and loan repayments, leaving graduates with an average net gain of about £100,000.

Returns differ widely by subject.

Medicine and economics graduates gain more than £400,000 on average, while philosophy and creative-arts graduates see smaller or negative returns. A performing-arts graduate can expect to be about £60,000 worse off. One in ten male graduates lose more than £90,000.

Under current tax and loan rules, six in ten degrees pay for themselves while the government loses money on four in ten. The report notes that 40 percent of men with low prior attainment end up financially worse off.

““While money certainly is not the whole story, our latest estimates suggest that university pays off (financially) for most of those who go.” — Natan Ornadel, Institute for Fiscal Studies A skills minister said university can be “transformational” but warned that “not all degrees are equal” and advised prospective students to “choose carefully.” The report states it is not possible to know whether today’s students will see the same returns, citing potential future changes such as those from AI.”