Government study confirms graduates are getting poorer
A new government study shows graduate salaries haven’t increased since 2008, despite the rise in cost of living. Graduates really are getting poorer every year!Disappointed to find you're still having to count your pennies since landing your graduate job? According to a new study released by the Department for Business Innovation and Skills, this is because graduate salaries have been frozen at the same level for nearly a decade!
Not only does this mean that students are moving on to earn the same salary on average as someone who graduated ten years ago, but as the general costs of living in the UK continue to increase each year, this also means that as a result graduates really are getting poorer with each year that passes.
How does that work out?
As everything naturally gets more expensive due to inflation, graduate salaries simply aren’t growing to reflect this: Your rent goes up, the price of food increases, and they decide to triple the cost of tuition fees (although, as we've explained previously, students are actually better off since the rise in tuition fees but it's the principal of it, right?).
Similarly, we’ve found in our annual student money surveys that a similar problem has been happening for current students concerning student maintenance loans, which have been frozen for years and are no longer enough to survive on.
The good news is that maintenance loans will be increasing for 2016/2017 students, but the bad news is they'll rise by a pretty measly amount, and the maintenance grants have now been scrapped completely!
So is uni really worth it?
The study did find that employment levels have picked up since the recession, and that graduates are still earning more on average than non-graduates (although, apparently this is not always the case with lower-ranking universities).
Graduates are also much less likely to find themselves unemployed after uni. Well, that’s a relief!
However, there has been a decline in high skilled employment amongst graduates, as it's become more common for students to take on non-graduate or lower-skilled work in order to secure a job after graduation.
The BIS also found that grades really do count – those graduating with a first class degree were found to earn on average £3,000 more per year than those who got a 2:1.
Those who got a 2:1 were also found to be earning £2,500 more than those who graduated with a 2:2 or third class degree.
Postgraduate employment rates are still higher and do lead to higher salaries. From August 2016, you’ll also be able to apply for a government loan to cover tuition fees for postgraduate study – find out everything you need to know about the loan in our complete guide.