Former Conservative Chief of Staff Describes Tuition Fees As a Ponzi Scheme
18th Aug 2017
There are many things that you receive when graduating from university - a gown, a cap, a fancy certificate, and unfortunately, £40,000 worth of debt. But which universities - and which subjects - are likely to give you the best return for your money?
A new report from salary research company Emolument.com shows a huge variation in graduate earnings, with graduates from the London Business School, for example, earning nearly 75% more than those from the University of Nottingham five years after graduation. The results also show that graduates from Warwick Business School outperform those from Cambridge and Edinburgh.
So who else is in the alumni rich list? Somewhat unsurprisingly, Oxford and Cambridge University appear in the top 5, earning an average of £54,000 and £52,000 respectively, but graduates from London Business School will still earn on average £16,000 per year more than Oxbridge students.
Having said this, a two-year MBA course at London Business School costs an eye-watering £67,750, meaning it would take two years for a graduate to pay back the cost of their course if their entire after-tax salary went on repayments. Oxbridge graduates may earn a little less, but they are more likely to have since secured a high-paid career at a fraction of the cost.
Gordon Chesterman, Director of the Careers Service at Cambridge, also claims that 'high salaries are not a main driver amongst our students.' He points out that 'intellectual challenge, contribution to society, and peer groups and colleagues' all rate higher as attributes sought out in careers by Cambridge students.
However, it is interesting that universities that demand the highest entry grades are not necessarily those that deliver the highest post-university earnings. For example, Durham is ranked fifth in the UK by the Complete University Guide, but its graduates appear in twelfth place in the Rich List, averaging salaries of around £45,000. In contrast, Sheffield, which ranks as low as twenty-sixth in the university league tables, appears seventh on the Alumni Rich List, earning an average of over £49,000 five years on.
In order, the top twenty graduate salaries by university are:
1. London Business School: £69,000
2. Oxford University: £54,000
3. Warwick Business School: £53,000
4. Cambridge University: £52,500
5. Cass Business School: £50,500
6. LSE London School of Economics: £50,000
7. University of Sheffield: £49,000
8. Edinburgh University: £48,500
9. Imperial College London: £47,000
10. University of Birmingham: £46,500
11. University of London: £45,500 12. Durham University: £45,000
13. University of Bath: £43,500
14. Aston University: £43,000
15. Warwick University: £42,500
16. Bristol University: £41,000
17. UCL University College London: £40,500
18. Loughborough University: £40,500
19. University of Leeds: £40,500
20. University of Nottingham: £40,000
Nonetheless, it is not just the university that you go to that affects your earnings - your subject can be just as influential too. Figures from the Sutton Trust show a large salary premium for graduates from medicine, engineering, technology, economics and computer science courses. Six months after graduation you can expect to be on starting salaries that average £8,'800 (55%) more than design and creative arts graduates.
According to the Sutton Trust, the lowest earning subjects were psychology; English; design and creative arts; biological sciences; history and philosophy. For example, medicine and dentistry graduates were found to earn starting salaries £8,000 per year (48%) higher than English and psychology graduates. If we therefore combine the two sets of data, looking at both the university and the course, we can assume that a science or engineering graduate form Oxford is likely to be on a starting salary of £11,800 higher than a graduate in an arts of humanities subject from a post-1992 university.
According to Sutton Trust research fellow Dr Robert de Vries, the large differences in earnings revealed in the report were persistent even after accounting for factors such as a student's background, academic history and attainment. Yet chairman Sir Peter Lampl points out that 'your chances of going to a top university are nearly 10 times higher if you come from a rich rather than a poor neighbourhood', and there is still evidence to suggest that private school students have much higher salary prospects.
However, what about the universities that don't make the top twenty? The Higher Education Statistics Agency (HESA) goes as far as suggesting that for some, university appears to confer no career advantage at all. For example, out of those who graduated in 2013, more than 18'000 were unemployed six months on, with thousands more working in low paid, low skill jobs.
Whilst three quarters of those who studied science subjects at university were in 'professional' jobs, this figure was just 55% for those that took creative arts degrees, 52% for those that studied languages and 51% for those who had studied history and philosophy. Similarly, while just 5.1% of science students were working in factories and other 'elementary occupations', this was the case for more than one in 10 creative arts, history and philosophy graduates.
Marcus Williams from recruitment consultancy Morgan Mckinley argued that 'core subjects are more valuable than the university itself. Our clients look for degrees in key subjects like maths, economics or English.' However, he conceded that a top university would increase the likelihood of 'face time' with managers at a top company, a key factor in getting your foot in the door.
Sir Lampl concluded the report by saying that 'we need to look honestly at the extent to which some young people may be better earning and learning on good apprenticeships than on a degree course with poor prospects.' Sixth formers should be encouraged to see higher education as a business decision rather than a social one - university can be an incredibly profitable investment, but some may still need to consider whether the risk is always worth the reward.
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