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Are there any financial benefits of going to university?

Are there any financial benefits of going to university?

Going to university can broaden your child's horizons and instil an appetite for life-long learning. It can be an opportunity to develop new life and work related skills and forge friendships with people from all over the world. It can also promote social mobility and opportunity enabling students from disadvantaged backgrounds to get into a range of high earning careers such as law and medicine.

However, going to study away from home at a university means for most students taking out a student loan to pay their tuition fees and living costs for the duration of the course. With the average student debt in the UK at £45,800 (for those starting their degrees in 2021/2022) - many parents and young people are wondering whether university makes financial sense?

Well the answer depends on a variety of things, including

  • what degree you do
  • where you go to university
  • what employability skills you gain whilst at university
  • what career you choose to go into [can affect your salary in the short and long term]

Let's look at the latest information:

The Department for Education latest report in June 2022 that said that in the year 2021 graduates on average earned £10,000 per year more than those that don't go to university, this is based on all graduates and non graduates aged 16-64 excluding post graduates [although women and people from an ethnic minority background earnt less].

In terms of job prospects, 65.2% of working-age graduates were in high-skilled employment, compared to 77.4% of postgraduates and 24.3% of non-graduates.

So which graduate jobs earn the most?

High Fliers 2023 report shows that the most generous salaries in 2023 are those on offer from the investment banks (avg. £55,000 per annum), law firms (avg. £50,000 per annum), consulting firms (avg. £47,500 per annum), banking (avg. £40,000) retailing (avg. £37,000) and oil & energy companies and accounting and professional services both (avg. £35,000 per annum). 

The report's headlines include the number of graduates recruited in 2022 jumped by 14.5%, compared with graduate recruitment in 2021, the biggest-ever annual increase in graduate vacancies, taking graduate recruitment to its highest level yet.  And the latest recruitment targets for the country’s leading employers show that the number of graduate jobs available in 2023 is expected to increase by a further 6.3%.

It is worth knowing that some employers target graduates from specific universities for their recruitment and overall the number of applications they are receiving on average have increased by 8% year-on-year. Prospects has up to date information about the average graduate salary by job sector, so this would be worth investigating.

The degree subject you study can affect your chances of getting a graduate job and the salary you will earn. The Complete University Guide has a guide to the top degree subjects for employability and salaries which include: dentistry, medicine, and veterinary science and pharmacology/ pharmacy. At the moment the only route into these careers is to go to university and do a relevant  degree - although they are discussing bringing in apprenticeship routes. 

Other subjects that also do well financially are all the variety of engineering degrees, computer science, maths and economics.

Many public sector roles benefit from stability in terms of graduate jobs, such as careers in teaching and the NHS. These jobs may start with lower salaries but then offer the opportunity for financial progression over time. For example, the starting salary for teaching is £28,00 for 2022/22 academic year.

To find out if the degree your son or daughter is interested in studying is likely to lead to a graduate job and what sorts of careers  it could lead to, check out What do Graduates Do? - there is a big variation between one degree subject and another (in terms of earning and career potential).

Other Routes

The other things to consider is whether the skills and the degree level qualification could also be gained either through a different route such as Higher Education at a local college, Open University (which may have cheaper fees and involve studying from home) or getting paid whilst studying through a Higher or Degree apprenticeship.

To find out more about these routes, go to Careerpilot.

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