Most graduates come out financially ahead — but for around a quarter, the degree doesn't pay off in cash terms
Independent research for DfE puts the typical net financial gain at tens of thousands of pounds — with wide variation by subject, and an explicit warning against reading 'financially worth it' as the whole story.
IFS estimates the median net individual lifetime financial return to an undergraduate degree at £67,000 for women and £60,000 for men — after tax, loan repayments and a comparison against similar people who did not go to university.
Independent analysis, not an official statistic
This page reports IFS’s own research, commissioned by DfE but produced independently. It is labelled as independent analysis throughout, not presented as a government statistic.
The headline figures
£67,000
Median net lifetime return, women
Mean is higher, £90,000 — skewed by high earners
£60,000
Median net lifetime return, men
Mean is higher, £109,000 — skewed by high earners
24%
Have a negative net return
19% of women, 31% of men
An estimated 24% of graduates have a negative net individual lifetime financial return — 19% of women, 31% of men.
The mean is well above the median for both sexes — pulled up by a minority of very high earners (medicine and economics graduates in particular). The median is the more representative figure for a typical graduate.
What “net return” actually means
IFS's "net individual lifetime return" = (the increase in pre-tax lifetime earnings from having attended HE, estimated against a counterfactual of similar people who did not) − (the extra income tax and employee National Insurance paid on those higher earnings) + (maintenance loan receipts) − (student loan repayments actually made). The counterfactual is not a simple graduate-vs-non-graduate comparison: IFS uses a regression model with rich prior-attainment and background data to predict what the same individual would likely have earned without a degree, and explains roughly half of the raw graduate/non-graduate earnings gap through prior differences that exist before anyone starts a degree.
The comparison is a counterfactual, not raw graduates vs non-graduates
Roughly half of the raw pre-tax earnings gap between graduates and non-graduates is explained by differences that already existed before they started a degree (prior attainment, background) — not by the degree itself. The net return figures above are calculated from the smaller, adjusted gap, not the raw one.
The variation by subject
Medicine
Individual net returns above £400,000 for women, around £500,000 for men — the highest of any subject.
Economics
Individual net returns above £300,000 for women; a high mean for men (over £650,000) driven by a small number of very high earners, with a lower median (around £450,000).
Creative arts and performing arts
Close to zero average return for women; strongly negative average return for men.
Languages and philosophy
Close to zero average return for women.
Social care
Negative average return for men.
An average is not a prediction for any one student
IFS is explicit that a low or negative AVERAGE return for a subject does not mean every student in it has a negative return — the variation within a subject is large, and some graduates of every subject in this list do well financially. These are averages across a whole subject, not a prediction for any individual.
What the taxpayer gets — a different question
A separate measure — the return to the taxpayer, not the graduate — averages £75,000 per degree, but the median is only £24,000, and the Exchequer makes a loss on around 40% of degrees overall.
A separate measure from the individual returns above: what the government gains, on average, in extra tax paid minus loan subsidy cost, per graduate. The median is far below the mean, and the Exchequer makes a loss (spends more subsidising the loan than it recovers in extra tax) on around 40% of degrees overall — a different question from whether the degree pays off for the graduate.
Private return is not the same as social value
IFS's own warning, in its own words
IFS's own words, not this site's paraphrase: "Estimates of the individual and exchequer returns to HE as a result of impacts on lifetime earnings and employment do not provide a complete picture as to the impacts of HE that individuals – or policymakers – might be interested in… if attaining a degree yields private returns by signalling something to employers… without making individuals more productive, the private return may exceed the social return, since signalling does not generate productivity gains for the wider economy… we do not consider potential non-financial impacts such as on marriage, fertility, social networks, health, happiness or job satisfaction, which may constitute an important part of the private return to HE, nor any potential spillovers to others of having a more educated population… All of these factors mean that our estimates are not sufficient to determine the socially optimal level of participation or investment (public or private) in HE."
A nursing or social work degree can carry a modest or negative private financial return by this measure while producing real value the model does not price — a functioning health and care system, for one. A low or negative earnings return is evidence about earnings, not evidence that a subject is “useless”.
How government framed this research, compared with how IFS framed it
DfE's own press release covering this research focuses on the earnings figures and quotes the Minister for Skills: "Going to university and getting a degree is one of the most transformational things a young person can do. But it is not a universal guarantee of success and not all degrees are equal." That framing does not repeat IFS's own caveat about signalling, social value, or non-financial impacts above — a real gap between how the independent study hedges its own findings and how government commentary presents them, worth being explicit about rather than picking one framing as "the" official view.
What this does not show
A causal effect of choosing a degree
IFS itself: this Yes — uses National Pupil Database Key Stage 2, 4 and 5 attainment plus socio-economic and demographic background as controls in the counterfactual, though the authors note this is not a fully causal estimate and some bias may remain in either direction.
A stable prediction for a student choosing today
2002 GCSE cohort (England-domiciled, born mid-1980s), with actual earnings observed via tax data to age 37 (up to the 2023/24 tax year) and simulated beyond that to age 67. Applying the results to someone starting a degree now assumes gross returns and the earnings trajectory haven't changed materially — the authors are explicit that structural shifts (including AI-driven changes to graduate labour markets) are not modelled.
One "true" number, independent of the discount rate chosen
Highly sensitive to the discount rate used: with a 0% real discount rate (adjusting only for inflation), net individual returns rise to roughly £260,000 (women) and £371,000 (men) — several times the headline figures above.
Why this edition's figures are lower than an earlier one you may have seen
This edition's headline figures are roughly 30% lower than the 2020 edition of the same study, on the same underlying cohort — not a new, worse cohort. About a third of the fall is attributed to policy changes since 2020 (less generous maintenance loans, changed loan terms, frozen tax thresholds, which shifted returns from individuals toward the Exchequer); about two-thirds is that graduates' actual earnings growth since 2020 came in weaker than the 2020 report's own projections assumed.
Last verified 2026-08-31. Data: IFS, "New estimates of the impact of undergraduate degrees on lifetime earnings" (independent, commissioned by DfE).
Related pages
- In this sectionThe price of a degreeThe rest of this chapter.
- In this sectionDegrees: what happens next?LEO employment and earnings by subject, without the counterfactual modelling this page adds.
- In this sectionWhat was the qualification worth?The same discipline, applied to attainment earlier in school.
- In this sectionEducationThe other chapters, and how this section is built.
Scope and definitions
England, not the UK
Education is devolved. Every figure on this page is England only. Scotland, Wales and Northern Ireland operate different frameworks with different legal definitions, and their figures are not directly comparable.
Independent research, cited by DfE, produced by neither
This page draws on an IFS study commissioned and published by DfE. IFS is an independent research institute; the analysis, methodology and conclusions are IFS’s own, not a DfE-produced statistic.