Leader: Students must be convinced of a degree's value

November 29, 2002

What is a degree worth financially? The question is central to the government's justification for charging more for higher education. Ministers claim the lifetime premium is £400,000; the opponents of higher fees insist it is impossible to predict how much graduates will earn.

The critics are entitled to challenge the government's figures. Anything can happen over the course of a career, and the premium must surely decline to some extent as the proportion of the population with a degree increases. But the fact that higher education can confer a substantial boost to future earnings is not the invention of Department for Education and Skills statisticians.

In recent months, the Higher Education Careers Services Unit has suggested that £400,000 is an underestimate, and the Organisation for Economic Cooperation and Development has identified the British degree as the most valuable of all. In the US, where participation rates are much higher, the premium is put at $1 million (£646,500).

The extent of the salary boost depends on what is included in the equation. There is an argument for limiting the comparison to those who have A levels and there are imponderables in the impact of family background. The Council for Industry and Higher Education turned the case for top-up fees on its head this week by suggesting that new universities may confer a higher earnings premium than their older counterparts because so many of their graduates come from homes with otherwise unpromising career prospects.

While the debate is all about fees, it may not matter how large the earnings premium will be. Parental income, rather than graduate prospects, determines whether and at what level charges are levied. But the head of steam behind some form of graduate-contribution scheme switches the focus and demands greater precision.

Many in higher education will argue that the value of a degree should not be measured in financial terms. Yet students must be convinced of the rewards if expansion is to continue while charges rise. The 50 per cent participation rate in the US among students from poor homes shows that it can be done.

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