Recent years have brought a steady and relentless criticism of the value of a university education that deliberately aims to deter would-be students and direct them toward skills-based technical education. This continued from the last government into the new administration last year. Those making the criticism are mostly older people who graduated with no loans to repay. They are effectively pulling up the ladder behind them. Recent criticism of the ‘graduate premium’ in pay is a crude approach designed to sap confidence. It amounts to dismantling the ladder and setting fire to it.
The danger is that university education becomes even more socially biased as deterrence mostly affects the least well-resourced. The financial barriers to surviving at university are considerable and rising. This alone might make employment an easier option. But the evidence so far is that university applications have held up with more students taking on part-time jobs. However, if the number of students in part-time jobs and the hours worked starts to fall it will be the first indication that the least well-off are recognising the burden they face and are not taking the risk.
With the spending review due out tomorrow, it is fair to say that students and universities are not expecting much to come their way. An exception is research spending, already announced as a total of £86 billion up to 2029/30. This comes as good news for the most research-active universities. However, it is not as good as it looks. It is an uplift from the current £20.4 billion in 2025/26 to £22.5 billion per year by 2029/30. This means the budget is protected but not substantially increased.
Meanwhile, students can expect the burden of fees to fall entirely on them through loan repayments with fees rising with inflation over the next two years. Universities are already cutting back their operations in light of falling income in real terms. Most are protecting their support for students as a priority, but the warning is there that this may not continue. In May, Universities UK concluded in ‘Universities grip financial crisis – but at what cost to the nation?’
“Universities are trying to protect investment in student hardship and bursary funding, this being the area least likely to have faced cuts so far. However, almost half say they may need to consider this in the next three years.”
Uncertainty is the refuge of hope.
The decision by a student to tackle a university degree lies largely in the hope they can seek a better life. This is most acute for those climbing out of low-income backgrounds. However, the uncertainty for them is greater since they are unlikely to have a family safety net to fall back on. Any information that sows the seeds of doubt or undermines their confidence in success is likely to act as a deterrent. This is where the idea of poor value and ‘micky mouse’ degrees comes into play. The current government has continued this trend with a focus on skills and apprenticeships and the alternative T-level route. Countering this is the hope that a degree will yield a ‘graduate premium’ in lifetime earnings. This is where the last government focussed when trying to deter students and direct them into technical careers outside of university. The aim now seems to force universities to expand their technical offering too.
Does university pay?
Many students will proceed on the basis that a degree will come with a ‘graduate premium’. Certainly, this has been delivered over many years. But there are detractors who question this and also seek a low cap on university student numbers. Many seem to be determined to pull up the ladder of opportunity with the effect felt most by less advantaged students. Indeed some are dismantling the ladder and setting fire to it.
One of the most vocal has been Paul Wiltshire, who is an accountant with a degree in maths and statistics. He is currently adding petrol to the fire. Last week he excelled himself with ‘So now it’s official. The ‘graduate premium’ is a myth’ in the Telegraph, citing concerns by the Office for Statistics Regulation. The university system is accused of,
“Misleading the public on the benefits of higher education is a gross exercise in mass exploitation”.
If ever there was a statement designed to spread uncertainties among students and their families, this is it.
“Until now, these inadequate statistics have allowed the sector to hijack the official figures and mislead the public and Government regarding the benefits of higher education, claiming that ‘everybody’ will be able to benefit from the supposed average premium.”
This is on the back of an earlier Telegraph article ‘Public misled on value of university, says government watchdog’
A strong rebuttal by the watchdog concerned, the Office for Statistics Regulation, asserts that the graduate premium,
“should not be used to compare the outcomes of graduates and non-graduates in isolation from prior academic attainment”
and
“More widely, OSR is not in a position to comment on the public discussion about the financial benefits, or otherwise, of higher education. In reviewing your case we did not find any recent examples of official statistics being misused by government to influence the debate”.
The uncertainty this debate fosters must be undermining confidence in government, universities and the data. Instead, school attainment, class of degree and subject studied are the main key factors to be considered. Students are doing precisely this. So the big question is……
Has the uncertainty deterred students?
Various measures will tell us that students are not opting for university; particularly those from less advantaged backgrounds. One of the best is the number of applicants each year. Generally, this has translated into over 80% successfully getting a university place. Figure 1 and Table 1 show the UCAS application rates (2025 cycle applicant figures – 29 January deadline -released in February) for this academic year.
The number of students has risen with the increase in the population of eighteen-year-olds, however, the proportion applying has declined by a small amount. Looking across the Indices of Multiple Deprivation quintiles (with quintile 1 being the most deprived), it seems the decline affects all but the least deprived. The most advantaged Quintile 5 proportion remains stable. One might expect this, but the overall conclusion is that students achieving suitable qualifications are not generally deterred to a great extent.
Indeed, in contrast, students are being encouraged at school to proceed further with their education. Those from more disadvantaged areas are enticed with contextual qualification requirements and an increasing number of bursaries.
Is finance a barrier?
This must be a big consideration when deciding to go to university. In England, the only support is a maintenance loan that has declined in value to the point that it can’t cover the cost of accommodation away from home. The House of Commons Library reviewed the situation in March with ‘The value of student maintenance support’ (pdf) and concluded,
“The real level of household income level at which support starts to be reduced has fallen over time. This means that the maximum support package is only available at lower real household income levels. It also means that in higher income households parents of dependent students need to make larger contributions to bring support levels up to the maximum. Parental contributions are not made explicit in student finance material and there is a fear that this means that some students do not receive the support they need”
The situation varies across the UK, as noted by another review in April, ‘Student support for undergraduates across the UK’. However, the provision in England illustrates the dilemma faced by many middle-income families. This is illustrated in Figure 2 from that report which shows the impact of household income on maintenance loan provision. The full loan is only available for household incomes below £25,000 per year. This is to be increased by an inflation-linked 3.1% later this year.
However, many students are from households with incomes much greater than £25,000 per year. Their families are expected to make up the costs somehow. Students from these middle-income families are likely to be under the greatest stress. Strangely, data that shows the proportion of students in receipt of a full maintenance loan is not reported. However, hiding in the government statistics there is the 2024 released data from 2021/22 ‘Higher education undergraduate student loan outlay by Household Residual Income’. Extrapolating from the residual income figures, it can be expected that between 30% and 40% of students are eligible for a maximum maintenance loan.
Indicators that less advantaged students may be deterred.
The casualties of this financial stress attrition are most likely to be those who commute from home and/or work long hours to make ends meet.
While the overall number and proportion of students applying for and entering university remain stable, there is a possibility that those under the most financial pressure are deterred. Perversely, the least advantaged may have more money available than many from middle-income families who can’t afford to support them. To date, this has been offset by commuting from home to lower accommodation costs (although the maintenance loan is lower) and/or taking on a part-time job. These numbers have been rising steadily in the UK over recent years.
Last year, the Advance HE/HEPI student experience survey 2024 revealed that the proportion of students who held down part-time jobs had risen to 56%, with many working hours well above the recommended limit of 15 hours per week or so (see TEFS ‘Student employment and finances: running out of time’).
The 2025 survey results will be revealed later this week. If those students are not opting to go to university to avoid the stress of less time to study and longer hours at work, then one might expect their numbers to stabilise or decline this year. If so, it will represent a culling of the least advantaged. If more are taking on jobs at the expense of study time, then they are on the wrong end of a two-tier system with less chance of achieving a higher class of degree.
There is an irony here of ‘Social Mobility Day 2025’ also falling this week on the 12th of June.
Other evidence of change.
The Office for National Statistics Labour Force Survey indicates that the number of full-time students aged 18 to 24 in employment and full-time education has remained steady for several years up to this March. This offers some indication of students carrying on with their studies despite employment burdens.
If it is expected that more students might drop out, the Student Loan Company data does not say this either. Across the UK, the total number of students withdrawing has been steady at around 17,000 (or 1.2%) for several years. This has not changed so far in 2025.
It seems the lure of a university education persists with students and families believing it is the main source of social mobility. They are right and universities will have to do more to offer degree programmes geared to success in a rapidly changing world. Hope and a determination to succeed will always win, but the path might be better paved with fewer potholes.
The author, Mike Larkin, retired from Queen’s University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics.