A university education no longer pays the way it once did in Scotland, with workers possessing degrees having seen their relative salaries nosedive over the past decade, new research has shown.
It comes as a drive to encourage more Scots youngsters into higher and further education is unveiled today with publication of a proposed overhaul of student funding.
But the educational “wage premium” is not what it was for graduates, MSPs on Holyrood’s economy committee have been told.
The number of workers north of the Border with a university degree has jumped from fewer than a quarter of the workforce a decade ago to more than a third today. But whereas a decade ago, workers could be expect a 13.3 per cent hike in their salaries for every year in higher education, today that has halved to about 7.7 per cent.
“Qualifications are not rewarded as well as they used to be ten years ago,” a submission by Dr Alexandros Zangelidis, and Prof Keith Bender of Aberdeen University states.
“Individuals with university degree or above had on average 37.8 per cent higher wages compared to people with no qualifications. This premium has reduced by 11 percentage points in 2016.”
Similar reductions can be seen among all workers with qualifications to a lesser extent.
It comes as plans to give Scottish students a minimum income of £8,100 a year are be unveiled today as a an independent review chaired by Virgn Money chief executive Jayne-Anne Gadhia is published. It is likely to recommend enhanced loan terms and an increased loan repayment threshold.
The proposals are similar to the system in Wales and makes student loans available in further education with debt write-offs for those who shift from colleges to university.
The current minimum income of £7,250 is in place, through a mixture of loans and grants, for students who come from families with a total household income of less than £17,000. The proposals today would take that up to £8,100 for all students. University students can currently borrow up to £5,750 to help pay for their living costs. Support for colleges is lower.
The central recommendation for today’s report will mean a cost of £16 million a year to taxpayers.
A source close to the review told the Sunday Times that a minimum student income will be a “huge step forward.”
Scots-domiciled students are already exempt from tuition fees which can add up to more £9,000 a year for students south of the Border.
But the prospect of more loans being afforded to students will meet with a frosty reception from opposition parties after figures earlier this year showed debt levels among those leaving higher education has risen by 13 per cent. Statistics from the Student Loans Company show the average loan balance for Scots who began repaying at the end of 2016-17 was £11,740, up from £10,360 for the previous year. This has almost doubled over the past decade, with the figure closer to £6,000 when the SNP came to power in 2007.
While on the increase, the figure is lower than in other parts of the UK, with students in England saddled with £32,220 of debt, those in Northern Ireland facing £20,990, and graduates in Wales £19,280.