§ Lord Cocks of Hartcliffeasked Her Majesty's Government:
Whether they are able to say, in terms of lifetime earnings, what benefits (i) individual graduates and (ii) taxpayers in general derive from higher education.
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§ Baroness BlatchEstimates of private and social rates of return were published in Annex D of the White PaperTop-Up Loans for Students (Cmnd. 520). This measures the benefits of a degree as the difference in lifetime earnings between graduates and persons whose highest qualification is A-level. The social rate takes differences in gross earnings plus employers' national insurance contributions and relates these to the public costs of a degree course. The private rate, the return to the individual graduate, takes differences in take home pay and relates these to the individuals' investment of forgone earnings during the course less the maintenance grant and vacation earnings.
The department's estimates in the White Paper were that for the period 1981–85 the social rate of return to a first degree for a male university graduate, averaged across all subjects, ranged from 5 per cent. to 8 per cent. depending on the precise assumptions used in the calculation. The private rate of return ranged from 22 per cent. to 27 per cent. There were significant differences in returns for individual subject groups but in all cases the private return was well in excess of the social rate.