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: Q  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 are employed today, compared to 93.4% in Q

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 part- justification for the cost.

Useful resources 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. 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.

References  Loan repayments:  Postgraduate premium:  Graduate premium: new-report/ article  Graduate premiums by subject: the-professional-premium/  Factors in earnings: impact-of-university-degrees-on-the-lifecycle-of-earnings-further-analysis.pdf  Degree result and earnings: grade-guarantees-you-a-good-or-bad-salary.html  Improving graduate jobs market for 2014: hire-18percent-more-graduates-2014  Potential rise in importance of vocational qualifications over academic pathways:  Graduate verses non-graduate employment now: employment-figures-from-the-labour-force-survey-january-to-march-2014