Students’ choice of degree subject has a hugely significant impact on their lifetime earnings, according to new research from the IFS.
Graduates earn on average around £100,000 more over their lifetime than someone of the same background and attainment who did not attend university, even after taxes and student loan repayments.
But the returns vary sharply by subject. Medicine and economics are the highest-earning degrees, and offer up to £400,000 in increased salary over a graduate’s lifetime, while other subjects can offer little to negative financial return, compared to what someone similar without a degree earns.
The government has this week outlined plans to draw up options for legislation to limit the growth of some courses at some providers, where there are consistently poor returns for students.
Drastic action to tackle poor-quality degrees and crackdown on the rapid expansion of franchised, and often poor-quality, provision is also ensuring the system prioritises student outcomes over volume or profits.
A new consultation in the Autumn will look at options for a minimum English language requirement for prospective under-grads to access student finance, to ensure students taking on debt to earn a degree are equipped to succeed in their studies.
Minister for Skills, Jacqui Smith said
Going to university and getting a degree is one of the most transformational things a young person can do. But it is not a universal guarantee of success and not all degrees are equal.
As well as the variation by subject, too many franchised and poor-quality courses do not offer a good deal to young people – selling the dream then leaving students in the lurch.
We’re making the system work better but my message to those thinking about university choose carefully. Don’t walk into a degree by default.
The data also comes as the government publishes its Pathways to Priority Occupations measure, highlighting that medicine, nursing, architecture and computing are among the top degree subjects to access jobs in the priority sectors in the UK’s Industrial Strategy, Construction, and Health and Social Care.
Collectively an estimated 1.8 million additional skilled workers will be needed in these sectors by 2035.
This measure provides a crucial first step in helping us identify which subjects will be eligible as part of our new targeted maintenance grant offer. It will be used alongside other data and stakeholder feedback to best assess how to target this funding for students in Academic Year 2028 to 2029.
The government is also working closely with UCAS to ensure earnings and employment outcomes from different courses are clear and accessible to prospective under-grads.
The government is also ensuring university is not the only choice for young people to succeed, with a record £3.3bn investment in apprenticeships this year, to help deliver the ambition of 50,000 more apprenticeship starts for young people by 2029.
This will start to reverse nearly half of the 40% decline in 16–24 apprenticeship starts over the past decade which has left young people locked out of the first rung on the career ladder.
This also builds on wider action through the government’s Youth Guarantee which will ensure every young person has the opportunity to earn and learn. This includes financial incentives for businesses to hire young people who have been out of work, providing guaranteed subsidised jobs — helping deliver up to 500,000 opportunities.