Lowering student numbers 'costs economy billions'

The study says that going to university remains a
"good bet" for individuals and the government

A drop of 30,000 students starting in higher education this year would cost the economy £6.6bn in the long term, according to a Million+ group study.

The study suggested university brought on average a 27% "earnings premium" above non-graduates with two A-levels - with higher gains for women than men.

A degree brings graduates an extra £115,000 over their working life, and a master's degree adds a further £59,000.

And for the Treasury there is a net gain of £94,000 per graduate, it says.

This represents a return of 10.8% for the Treasury on the cost of financing an undergraduate degree, the research, carried out by London Economics, indicates.

Although a recession brings scrutiny of whether it is worth going to university, the study says the value of higher education is greater in a tougher jobs market, offering greater protection against unemployment.

And despite the rise in student loans to cover higher tuition fees, there are still "very high rates of return".

Million+ chairman Patrick McGhee said going to university "remains a remarkably good bet".

A major study in the United States last week also examined the issue of the current value of going to university - and also found that despite worries about debt, a degree provided a strong advantage in the jobs market.

The Million+ study on UK universities calculates the value of a cohort of students entering higher education - and based on 2011-12 it says that "the total value of these qualifications to those new entrants stands at approximately £36bn in today's money terms".

- BBC.co.uk