University degrees: how should we assess their value?

Evaluating university degrees on the basis of the job prospects they provide for graduates has led to some being seen as ‘low value’ or ‘low quality’. But, in reality, their worth is hard to measure. Closing such courses is likely to have a negative effect on social mobility.

The Conservative party recently announced plans to crack down on ‘rip off degrees’. It proposes introducing new legislation that would allow the Office for Students to close the lowest-quality courses.

The Conservatives claim that the savings from this new scheme – an estimated £910 million by 2030 – would allow the government to invest in 100,000 more apprenticeships per year.

In reality, this is not as straightforward as the party would like to think.

First, it is very hard to establish what constitutes a ‘low quality’ degree course.

The Conservatives have mentioned dropout rates as a potential measure of course quality. But it is not obvious that the UK has a particular problem with this. Dropout rates are actually very low in the UK compared with the rest of the world.

The non-continuation rate was just 5.3% in 2019/20, according to the most recent Higher Education Statistics Agency figures (HESA, 2024). This is strikingly low in comparison with the United States, for example, where as many as 25% of first time bachelors students do not complete their degree.

It may therefore be hard to choose the right threshold at which a degree would be considered low quality on this basis.

Job prospects – measured, for example, by earnings – have also been touted as a possible measure of quality. This would be relatively easy to measure but closing a course down on the basis of its graduates’ earnings would be highly controversial. Further, decisions would have to be made about how far out of a degree a student would need to be for an adequate earnings measure.

The difficulty with using this metric is the lack of evidence of a causal link between course quality and student labour market outcomes. There may be many reasons why students go on to earn less after studying a course, some of which are not directly to do with the course itself.

For example, those who enrol in lower-earning courses may earn less simply because they had lower entry qualifications to begin with, or because they come from poorer backgrounds.

Students may also choose to go into socially valuable, but lower-paid jobs, such as teaching or nursing. Similarly, they may live in, or move to, areas with high unemployment after their degrees.

Some high-quality evidence that does take these observable differences in earnings into account still finds a link between course quality and earnings, though unobservable differences (such as students’ motivation) are much harder to control for and may be driving some of the effect.

It is also not clear how the proposal to close down degree courses would fund 100,000 apprenticeships per year, as has been suggested.

Although students themselves now cover a significant proportion of the cost of their degrees through tuition fees, there is still a considerable cost to the government for each student. This cost is covering any unpaid student loans, as well as providing universities with teaching income. So cutting student numbers could save costs.

But closing certain courses would not guarantee that young people would enrol on apprenticeships instead. There are no numbers caps on degree courses, so universities are free to expand courses as much as they want. Axing some degree courses would be likely to result in students just choosing other degrees instead, meaning that they would still require government funding.

A further concern is that this policy is likely to have a greater impact on low socio-economic status students. Work by the Centre for Education Policy and Equalising Opportunities (CEPEO) shows that they are more likely to take ‘low-quality’ degrees – when quality is measured by academic attainment or earnings prospects – than their more advantaged counterparts, even when they have the same entry grades.

Closing down routes favoured by low socio-economic status students could squeeze them out of university altogether, which would be highly concerning for social mobility.

If the next government really wanted to give more young people apprenticeship opportunities, it may be preferable to do so by reforming the current apprenticeship levy rules. The current system creates incentives for employers to offer apprenticeships to existing employees in place of other types of internally-provided training, rather than to young people leaving full-time education.

Fixing this issue – for example by ringfencing some of the levy for young people, as we argue in our policy priorities – would be a more effective solution. The CEPEO policy priorities offer evidence-led, practical steps to move towards a society of more equal opportunities.