Does it pay off in career terms by going to university?
Quick takes from content below:
- The ‘graduate premium’ exists meaning that graduates can earn more money than non-graduates
- STEM subjects can attract a higher premium, also subjects such as Law and Economics
- Some subjects or degree classifications below 2:1 attract a lower premium
- About 4 out of 10 graduates in a 2023 all-age survey were working in roles that did not require a degree
- It can take time and persistence to get a job directly related to the degree you studied. Also, new graduates might not see the graduate premium hit their payslip for a number of years.
- Many graduates develop careers unrelated to their degrees
- The student loan pay-off period for a graduate is now 40 years
Services provided by Career Lift-Off www.careerliftoff.co.uk focus on UK sixth-form and FE college leavers who may have doubts about committing to a three-year university degree studied full-time and funded through tuition fee loans.
So, if you are a young person in this position will university pay off for you? Alternatively, if you are parent of a young person and you are keen for them to attend university, is it likely to pay off for them? After all, isn’t getting a university degree meant to lead to higher earnings and a better career?
Higher earnings as a result of going to university
Here’s what is in the mix
- The ‘graduate premium’
- The type of degree
- Classification of degree
- What career sector you aspire to get into
A 2024 research report by the Intergenerational Foundation The State of the graduate premium – Intergenerational Foundation highlights for us key data and interpretations of that data on all of the above points.
Yes, there is a so-called ‘graduate premium.’ You could end up earning 30% more as a graduate than as a non-graduate, though this figure reduces to 11% for young graduates (age-range undefined in the report).
There is a big BUT!
If you have not graduated in a STEM or LFG (Law, finance, management) degree the above figure goes down to 20% – but this not to scoffed at, of course. It’s also vital that you achieve at least a 2:1 class of degree because the data shows that those who don’t get this tend to benefit from a lower ‘graduate premium’ whatever the degree.
A better career through going to university
If the university degree leads to a profession, it will require a specific degree and then it becomes a no-brainer; going to university to study this degree will lead on to professional status and secure you professional pay levels. Examples are evident: medicine*, dentistry*, architecture, engineering, social work, veterinary science, law*. There are more.
NB *there is the possibility of graduate entry to these professions and that away from the above degrees, for example in media and games design, it is now becoming increasingly common for employers to require university degrees.
It is no plain sailing though – there will likely be further training and/or supervision involved after graduating and professional examinations to take for all professions.
As for the ‘graduate premium,’ well, it’s there in these professions (though some public-sector pay scales might not suggest this). However, it needs to be compared with, for example, the possibility of a non-graduate having reached a senior position in their career where the same level of remuneration has been achieved, for example in large corporate business roles.
A better career despite being a graduate from university
Well, it can happen this way but will take time. The data from a 2023 report from Staffing Industry Analysts (New report shows that many UK graduates are in jobs that do not require a degree) is rather stark when it highlights that 43% of university educated employees at the time of the research were working in a job that does not require a degree.
So, is that necessarily bad news? Well, yes certainly in the sense that the’ graduate premium’ will not be there in the short to medium term and the practicalities of being in a mismatched role in relation to qualification level might lead to frustration and dissatisfaction. The issue of mismatch of graduates to jobs which don’t require degree qualifications has been a continuing phenomenon since it was initially identified by 2015 research by the Chartered Institute of Personnel Development (see 1234-over-qualification-and-skills-mismatch-graduate-labour-market_tcm18-10231.pdf). The CIPD also spotted at that point that the supply of graduate level jobs was not keeping up with the then two decade rise in the number of graduates from UK universities.
So, no immediate graduate premium then but what about a better job? It becomes a matter of effectively being persistent by performing in a job for a time whilst continuing to seek graduate opportunities in one’s early to mid-twenties. It might otherwise mean starting over; performing well in the job which you are over-qualified for and working your way up in the business to higher roles which commend higher status and salary. Future learning or professional courses might well be involved. This exemplifies the take-away point at beginning that many graduates develop careers unrelated to their degrees.
Michael Stockwell, Career Lift-Off, 2025
