The Return on Investment (ROI) in terms of university education is the measure of the financial gain or loss that results from investing in a degree. In simple terms, you can calculate this by comparing the cost of attending a university with your potential future wages as a graduate.  

With the average student loan on leaving university said to be around £45,000 in 2020 according to the Higher Education Policy Institute, the ROI feels more relevant than ever when making educational choices.  

Career choices

The impact of a chosen subject on future earning potential varies depending on several factors.  For example, some degrees have potentially lower lifetime earnings, some can lead to more lucrative careers and others, while not likely to attract high salaries are in demand and thus more likely to lead to immediate job success on graduating.  

Unfortunately, other factors can also come into play such as gender bias. For example, recently found that men will be £130,000 better off on average by going to university after taxes, student loan repayments and foregone earnings are taken into account. For women, this figure is £100,000. 

Gaining specialised skills can make a graduate more employable and increase their earning potential. Specialised skills that are transferrable across different contexts such as critical thinking, collaboration and communication will also help graduates succeed and adapt in an ever-changing job market. 

Industries and job markets

A study by the Higher Education Regulator in 2018-19 showed that the UK had nearly a million graduate-level jobs without qualified staff to fill them. This was particularly true for computing, engineering, teaching and education, and health.  

Studies have also been tracking the potential scale of worker displacement due to technological advances such as automation and augmentation. While these areas bring new opportunities in themselves, there is potential for a change in skill demand which could make certain degrees less relevant.  

Degree level and geographical location

As well as thinking about industries and job markets, your qualification level and location may also determine your ROI.  

For example, according to the average income of graduates with an undergraduate degree in England was £28,000 five years after graduating. For graduates with a master’s, it was £34,000 and with a PhD, £40,000 per year. Obviously further study would also incur further cost.   

According to a report by the there are significant differences in productivity and income across different regions in the UK which could in turn affect your ROI. In 2018 areas with above average income were mostly in Southern England and parts of Scotland. Areas experiencing below average levels of income included Wales, Norfolk, Cornwall, Lincolnshire and Northumberland.  

How to get the best return for your investment

A report by the Institute of Student Employers (ISE) found that the legal, digital and IT, finance & professional services, health and pharmaceuticals, and energy, engineering and industry sectors offer some of the highest median salaries for graduates and therefore a potentially high ROI.  

Some emerging fields that also have the potential for strong financial rewards include financial coaching, data science, cloud computing and cybersecurity.  

Highest paying industries for graduates

While many influences come into play around graduate salaries such as location and gender, our table of average graduate salaries, based on Higher Education Statistics Agency (HESA) data, give a good indication of higher paying industries. Jobs in artificial intelligence, engineering, dentistry, economics and medicine have some of the top graduate salaries. Creative industries such as fashion, photography, music, writing and acting tend to be at the lower end of the scale.  

The current average graduate salary in the UK is just over £24,000 according to HESA.  

Things to consider

Although it’s useful to predict your ROI when thinking about university and your career, it’s not an exact science. There are various considerations that might change when calculating how much it will cost to go to university such as the impact of the cost of living. Your potential future earnings might also vary depending on the stability of the industry you want to go into along with the opportunities that arise in the specific organisation you’re employed by, its size, location and its inclusive or non-inclusive culture.  

Money shouldn’t be the only factor to consider when choosing your degree and future career. Personal fulfillment is also hugely important. If you find a career you enjoy, you’re more likely to be motivated to continue to develop your professional skills and fulfill your career ambitions.  

When estimating your return on investment consider all the costs of going to university including the student loan repayments and the wages you might have earned instead of being a student. Think about the versatility of your degree in securing a career, earning potential of roles within that industry and both the sectors longevity and your long-term career goals.  

Would you be motivated by higher salaries to move location, study for a postgraduate qualification, or use some of your transferrable skills to adapt your career in an ever-changing jobs market?