One in five graduates in England would have been better off financially had they not gone to university, while nearly half will receive a net government subsidy for their degree, new research suggests.

A study from the Institute for Fiscal Studies (IFS), commissioned by the Department for Education, estimated that the average net lifetime return of an undergraduate degree is ?130,000 for men and ?100,000 for women, when taking into account taxes, student loan repayments and foregone earnings during study. For both men and women, this represents a gain in average net lifetime earnings of about 20 per cent. The 10 per cent of graduates with the highest returns gain approximately ?500,000 on average.

However, it calculated that about one in five English students ¨C or about 70,000 every year ¨C makes a net financial loss from attending university.

Most of the variation is explained by the subject studied at university. Graduates who studied medicine and law, for example, achieve very high returns on average, while few of those studying creative arts gain financially from their degree. Several STEM courses, including biosciences, also offer low returns for women.

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Men?generally gain larger returns if they attended a Russell Group university, but women see little difference in average returns across institution types.

The study drew on the Longitudinal Education Outcomes (LEO) dataset and controlled for students¡¯ prior attainment and family background when comparing those who undertook undergraduate degrees with those?who did not. Previous IFS research has examined the?impact of undergraduate degrees on earnings at age 29, but the new study uses newly linked additional LEO data on earlier cohorts to consider the impact of earnings over an individual¡¯s whole working life.

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The estimates are based on the earnings of individuals who were born in the mid-1980s and went to university in the mid-2000s, with the analysis simulating earnings and employment trajectories up until retirement age. The study did?not take into account any non-financial benefits of higher education.

The report,?The Impact of Undergraduate Degrees on Lifetime Earnings,?also estimated the benefit of degrees to the taxpayer, taking into account the government cost of providing student loans and changes in tax payments.

The expected gain to the exchequer of an individual enrolling in an undergraduate course is about ?110,000 per student for men and ?30,000 per student for women ¨C but these rewards are driven mainly by the highest-earning graduates. The government makes a loss on financing the degrees of around 40 per cent of male graduates and half of female graduates, according to the study.

Jack Britton, co-author of the report and an associate director at the IFS, said that the findings ¡°raise questions about the value¡± of degrees for individuals and taxpayers, adding that it would be ¡°a bit of a concern¡± if there were degrees that either party was not aware would probably result in a financial loss.

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ellie.bothwell@timeshighereducation.com