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Graduates earn a third more – but is that enough?

Students and parents have been celebrating this week, after the Government U-turned on its decision to downgrade A-level results. Yet the decision to use teachers’ assessments and to remove the cap on student numbers will have some unintended consequences for both the housing and jobs markets.
University towns are key areas of investment for landlords and, while it is still unclear how exactly the changes will affect student numbers, it is likely that Russell Group universities will end up taking many more than they anticipated, as school leavers grab places at their first choice campuses.
Many lower-ranked universities on the other hand will face a huge gap in student numbers. The former will have problems housing their large intakes, pushing up rental prices for everyone, while landlords in the latter may struggle to fill homes.
A glut of new graduates will also create problems for the jobs market. Even pre-pandemic, university leavers struggled to find jobs that matched their skills – with one in three overqualified for their job.
Many school leavers see this as one of the most important financial decisions of their young lives: do they take on more than 50,000 of debt or plough straight into the world of employment with no degree? New research suggests they may not be getting good value for their money.
Graduating in Britain does not boost earnings as much as other nations despite students paying the highest amount of fees among western developed countries. Recent graduates in Britain typically earned 33pc more than the national average but those in America and Spain managed to boost their pay by 65pc and 53pc respectively. Some degrees, such as communications and creative arts, actually leave British graduates earning less than someone who never went to university.
Even so, anyone who decides to pass on their university place should not take the decision lightly. A degree is all the more important during recessions and tough jobs markets, as the earnings gap between graduates and non-graduates increases in these periods.
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In our comments section, Mo Bass said of Fears grow for self-employed workers left high and dry by second emergency grant: "One of our tenants hasn't paid rent for four months as he became self-employed through a limited company less than a year ago. He applied for Universal Credit but was refused and he and his wife are now deeply in debt through no fault of their own. As their landlords, we are also negatively affected. Teachers who refuse to go back to work are paid 100pc of their salaries. Yet the self-employed, desperate to get back to work to support their families, are penalised."
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