Is university a waste of money? HALF of graduates earn below the average wage five years after leaving amid warnings over ‘debt trap degrees’
Half of all graduates are earning less than the median national wage five years after leaving university, a damning new report warns.
The findings mean more than 150,000 graduates a year struggled to even reach the median full-time worker’s salary of £35,000 in the UK.
Even more worryingly, 11 per cent of graduates landed a job that failed to earn them just £24,000 over the same period, according to the analysis by the Policy Exchange think tank.
In addition, it found only 57 per cent of graduates are in full-time work 15 months after leaving university.
It is the latest evidence of a ‘collapse’ in the so-called university premium – the additional lifetime income graduates earn compared to non-graduates.
Critics claim it is now time to stop ‘luring’ young people into ‘debt-trap degrees’, with the typical student amassing debts of £50,000 a year to study.
It comes as experts warn today that the jobs market is only going to get worse, with high costs imposed by Labour crushing growth.
And it follows a poll in which a third of Britons said going to university is no longer worth the time and cost – more than double the amount two decades ago.
Last night, Shadow Education Secretary Laura Trott said: ‘Too many young people have been pushed into courses that leave them with large debts, limited teaching time and poor employment prospects.
‘This report exposes just how unfair and demoralising the current system has become.
‘Many graduates do exactly what they were told would secure a better future, only to find themselves burdened with debts for qualifications that do not provide the opportunities they were promised.’
Suella Braverman, Reform’s Education spokesman, said the universities system is ‘rigged’.
She added: ‘Our young people have been sold a lie about university, wasting three years of their lives to get massively into debt, while we have a chronic shortage of nurses, builders and care workers.’
The report is based on the Government’s Longitudinal Education Outcomes (LEO) data, which tracks graduates’ earnings via tax, student loans and benefits.
Researchers examined earnings in the year 2022/23 for graduates who left university in 2017, covering around 300,000 individuals.
They found at least 50 per cent earned less than £35,000, which was the national median wage for full-time employees of all ages in 2023. This has now risen to £39,000 in 2026.
Half of all graduates are earning less than the median national wage five years after leaving university, a damning new report warns (file picture)
They also found at least 11 per cent – 33,000 – earned less than £24,000 in 2023. Three years later, that amount is now the Government’s National Living Wage for workers over 21.
Subjects with the lowest earnings included sociology, the creative arts, English, sports science, psychology and performing arts.
Meanwhile, at the other end of the scale, medicine, dentistry and economics had the highest-earning graduates.
Policy Exchange said the study showed a ‘wholesale collapse in outcomes, standards and the graduate premium’ following ‘mass expansion and marketisation’ of the sector.
Around a decade ago, the then Tory government removed student number caps, allowing universities to recruit as many students as they wanted.
Some over-recruited in subjects that were cheap to lay on so that they could rake in tuition fee income – and lowered academic standards to facilitate this.
The wide-ranging report also found the proportion of Firsts awarded in the UK has more than doubled over the last 18 years, from 13 per cent in 2006/07 to 30 per cent in 2024/25 – suggesting this top mark is being devalued.
| Best-earning subjects | Worst-earning subjects |
|---|---|
| 1. Medicine and dentistry: £53,300 | 1. Performing arts: £24,500 |
| 2. Economics: £50,400 | 2. Creative arts and design: £25,600 |
| 3. Physics and Astronomy: £42,000 | 3. Agriculture, food and related studies: £26,600 |
| 4. Mathematical Sciences: £41,600 | 4. Education and teaching: £27,400 |
| 5. Engineering: £41,600 | 5. Media, journalism and communications: £27,700 |
| Source: Median annual earnings 5 years after graduation from first degree, DfE LEO data 2022/23 | |
And rates for recent student debt are so high now that a typical graduate who took out a loan between 2012 and 2023 needs to earn £66,000 just to cover the interest.
In addition, at least a third of graduates are not in graduate jobs.
Neil O’Brien, Shadow Minister for Policy Renewal and Development, said: ‘Too many young people are being lured into debt-trap degrees that won’t help them get ahead.’
Baroness Deech, former Independent Adjudicator for Higher Education, said: ‘Successive governments increasingly supported the uncontrolled expansion of the sector, heedless of the impact on standards, on institutional stability and on student welfare.’
Labour life peer and author Lord Maurice Glasman added: ‘Mass expansion and marketisation have seen numbers soar, standards collapse and the proportion of Firsts go through the roof – while the construction and manufacturing industries have been starved of the skilled labour our country really needs.’
The report authors said the number of university places should be reduced by 30 per cent and there should be a cap on top marks awarded.
They also called for tougher entry standards, including a new national entry test for applicants who fail to get at least CCC at A-Level.
And they also called for a reduction in interest rates for student loans and for tuition fees – currently £9,790 a year – to be frozen.
The findings mean more than 150,000 graduates a year struggled to even reach the median full-time worker’s salary of £35,000 in the UK (pictured: Shadow Education Secretary Laura Trott, who called the system ‘demoralising’)
It comes as today the CBI releases a report predicting that unemployment will rise by 200,000 to hit 5.5 per cent this year as costs – which include tax and minimum wage hikes – result in private sector hiring seizing up.
The forecast downgrades the UK growth outlook for this year from 1.3 per cent to 1.1 per cent and for 2027 from 1.5 per cent to 0.9 per cent, after Donald Trump’s Iran war disrupted the global economy and pushed up energy costs.
Last month, former Labour cabinet minister Alan Milburn forecast the number of so-called Neets – those aged 16 to 24 who are not in education, employment or training – is on course to jump by a quarter to 1.25million in five years.
A Labour source said of the latest report: ‘Some of the endorsees of this report were heavily involved in university policy under the Conservative government. Their brass neck defies belief.
‘They spent years prosecuting endless culture wars in higher education rather than ensuring students were getting value for money and universities were financially sustainable.’
Meanwhile, Universities UK, which represents vice chancellors, said the report’s figures did not take into account that some graduates might be working part-time or going on to further study.
Vivienne Stern, its chief executive, said the analysis was ‘wrong-headed’ and pointed out that just 3 per cent of the graduate population are out of work compared to 6 per cent of the wider working age population.
She added: ‘The report might also note that only 8 per cent of graduates regret their decision to go to university, and that by the age of 31, graduate earnings are on average 37 per cent higher than for non-graduates.’
She pointed out the graduate premium has been eroded partly because of the increase in the national minimum wage.
And she said: ‘For those of us who enjoy watching television or live music or going to a show, we’re lucky that there are students who want to enter these fields for the love of it, even if they may not earn huge salaries.’
A Government spokesman said: ‘We’re cracking down on poor quality courses so that students can be confident they’re getting value for money from university degrees, while making the system fairer by reintroducing targeted maintenance grants and capping interest rates on student loans.
‘The problems we inherited are deep rooted and it’s why we’re bringing forward the biggest youth employment reforms in a generation. This includes £2.5 billion of funding, more apprenticeships, and business grants.’
