How much do graduates really earn?

The case for transparency

In my Times column today I look at a category of students seldom discussed: those with mediocre grades who thinking of not going to uni at all . They’ll be urged to apply. Told that a ‘graduate premium’ exists for salaries - £100,000 a year according to the government - and that if you invest in skills it will pay off. In a great many cases, this is a lie. The truth can be shared, I argue, by opening up the LEO database which shows just how much graduates from every course at every university earn.

This is a techy column - using a Saturday OpEd slot to advocate for database to be opened up - but I have come to believe this would make a fundamental difference to a demographic often overlooked by broadsheets. It could potentially save working-class kids tens of thousands in loans and wasted years. I also think it would help end the demeaning of trade or vocational training and replace the luxury-belief advocacy of universities.

But first, my personal priors. I studied history and politics at Glasgow University and ended up in its (once) famed Institute of Soviet Studies: home to Alec Nove, Stephen White etc. My point: mine was not a vocational degree. I studied it because I loved the subject (and still do). I went to uni because it was uni: no one in my family had been to uni before. The Sovietology was not a terribly practical skill but I found the student newspaper at Glasgow and, with it, what I wanted to do with my life. Uni was worth it, for me, for what I discovered on the fringes of those four often-meandering years.

But there were no fees then: you could afford flights of fancy. Now there are 144 universities, and the edited LEO data shows is what graduates earn five years on. It varies from £57,000 (LSE) to £20,000 (Grwp Llandrillo Menai). The IFS, who have a license to access the whole dataset, looked at this (in terms of money paid in taxes or loans) by subject and it showed a stunning variation. Non-graduates are in red.

The above is the kind of info I had no idea about when applying to uni. History compares quite well: or, at least, did seven years ago when the study was published. Updated figures exist in the form of a redacted LEO database, published but almost impossible to read. That shows (or seems to show) salaries of £30k for Glasgow history graduates after five years (!) the second-lowest after Liverpool and far behind history grads from LSE: almost at £50k.

The LEO dataset can tell you what graduates are earning aged 30, 35 even 40. The IFS looked into it eight years ago:-

It could and should be updated every year, with the breakdown given by institution. Even this can be broken down by school attainment and POLAR deprivation quintile. The data is rich, powerful - and secret. It could easily be anonymised, thrown open - and then tools would be developed to share this information with graduates before the borrow £50k.

And why the £9,535 fee is too low

LEO would not only expose the lowest-return courses but also show what absurdly good value the best courses are. It would, I suspect, underline my unpopular view that the £9,535 fee is too low. Those on these courses (computing, medicine, economics, law at good unis) are virtually guaranteed a return on their investment. Why subsidise families who can absolutely afford to pay the cost of their degree? Especially if that degree opens the job to stellar salaries?

UK universities now lose money on every Brit they teach which is why they max out on foreign students: up from 10pc to 25pc of the total. This narrows options for Brits. Look at clearing this weekend: Engineering at Bath. History at Edinburgh. Economics at Exeter. Great courses, but Brits need not apply. Universities cannot afford to take on any more of us. Here’s what you see for one of my 1991 UCAS entries: Aerospace Engineering degree at the University of Bath. A great course with superb prospects: in clearing! But look who is (and isn’t) allowed to apply.

Brits may want to get on this course and pay £20,000 a year. But they’re not allowed to. It makes no sense. The market is supposed to mean the best courses expand. But they won’t, if unis lose money on every Brit they teach. So the opportunities are now expanding for foreign students but not, really, for natives. The uni market is badly broken.

Making LEO open to all would put the grad earning figures in the public domain and kick-start a much-needed debate about the university funding crisis. LEO would help strength the best, and stop sending teenagers blindfold into the worst. If ministers want to level-up opportunity they should make LEO open in a way that every sixth-former could understand. Given the debt they’re about to take on, it’s the least that they deserve.