A major argument for the fee rise has been the claim that graduates earn £100,000 more in their working life than non-graduates.
The question I posed to Mr Duncan Hames MP on 30th November:
Is this figure based on like for like students? That is students with similar 'A' level results who did, or did not, go to university, or is it based merely on population averages of those with or without a degree?
Mr David Willets MP reply of 3rd February
'the analysis compares like for like students as far as possible since it compares life time earnings of first degree graduates to the life time earnings of those with two or more A levels as their highest qualification (who could have gone to university but did not) and it also controls for other characteristics which may influence earnings;'
I believe as a 'like for like' sample this seems highly suspect if not useless. There is likely to be a highly significant difference between these two groups both academically and also in motivation levels. It is standardized neither for the number, nor grades, of the A levels. Many graduates will have 3, if not 4 A levels, and a significant number will have 'A' and 'B' grades. One group chose to go to university and carry on learning, the other did not.
At a subsequent meeting with Mr Hames we discussed this figure as he was using it to justify the fees. When I said as a figure it was meaningless he replied
'I did not agree with everything in the Brown report'
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I also asked in reference to the later entry into the job market of graduates:
Does this figure take into account later entrance to the housing market due to inability to build a deposit, and also the lack of private pension contributions, increasingly more important in retirement?
Mr. Willets MP reply of 3rd February:
It does not include other non-earnings benefits and costs, such as housing assets and pensions
These two points combine make this average 'lifetime gain' far from accurate.
In addition, Mr Hames has confirmed that the supposed £100,000 lifetime increase in earnings as quoted by the Browne report is net of tax, but as far as can be made out from the information provided to me by the government, it is calculated before taking into account the cost of any student loan repayments. After this £100,000 is subjected to the 9p/£ loan repayment, its net value would be nearer £90,000.
Beyond this, whatever the true average figure might be, the range of individual figures which go towards it will be very wide.
Figures produced by Price Waterhouse Cooper for Universities UK give graduate premiums for a variety of degrees. See below:
Arts | £35,000 |
Humanities | £51,000 |
Linguistics | £72,000 |
Agricultural Sciences | £82,000 |
The existence of a £100,000 premium for graduates was at the heart of the arguments being made for increasing fees so substantially.
The 'unlike for like' statistic, lack of inclusion of non-earnings benefits and costs, the 9p/£ repayment and the wide range of individual premiums combine to make the £100,000 premium figure ridiculous.
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