Completing a part-time degree in your late 30s can bring an increase in lifetime earnings of up to £377,000 in cash terms, a new study shows.
An analysis of the earning potential for part-time students in England qualifying at the age of 37 – the average age of an Open University graduate – underlines the benefits not just for the individual but also for the public purse. The study, commissioned by the OU from specialist consultancy London Economics, estimates that such an increase in earnings would lead to someone paying £191,000 more in tax over their working life.
Extra Government support would bring economic benefits
The Open University has called for the UK Government to provide financial support to part-time students in England to reduce the cost of study and help reverse the dramatic fall in numbers studying in England since the funding changes of 2012.
Mary Kellett, Acting Vice-Chancellor of The Open University, said:
“There are big potential returns for both students and taxpayers that can be unlocked by studying a part-time degree as a mature student. This research shows that supporting people to study part-time is a smart investment for the UK Government to make.”
“I doubled my salary”
Ryan Peddie studied with the OU in his 30s and has gone on to double his salary and change his career path. The company he was working for was facing financial difficulties, and Ryan decided to change track from working in IT to moving into finance. He transferred to his company’s finance office and used his new knowledge to make an impact. The company’s position improved to the point where they now have a £7million turnover – and Ryan is the finance director.
You can read Ryan’s story in full about how he changed his career – and his prospects.
Delivering the skills our country needs
Professor Mary Kellett continued: “It provides further evidence of the large costs to society of the collapse in part-time higher education in England caused by the 2012 funding reforms. The UK Government needs to provide financial support to part-time students in England either through a tuition fee grant or through maintenance grants for part-time students.
“This will help deliver the skills our country needs by encouraging those already in work to ‘earn and learn’ and give real study choices to people of all ages and backgrounds. One option for providing this financial support is by introducing maintenance grants for part-time students as is happening in Wales following recommendations from the independent Diamond Review.”
Substantial lifetime benefits of part time learning
In its report, London Economics used the same methodology employed by the UK Government to develop a sophisticated model which looked at the earning potential of two types of part-time graduate – those whose previous qualifications included two A-levels and those who had only GCSEs when they began their studies (around a third of OU degree students).
The report found that getting a part-time degree was associated with lifetime earnings on average £238,000 higher in cash terms for a man graduating at the age of 37 who began their studies with two A-levels. It was associated with lifetime earnings on average £377,000 higher in cash terms for a similar student who previously had only GCSEs.
The additional tax paid by such an increase in earnings would lead to a male graduate paying between £123,000 and £191,000 more tax over their lifetime in cash terms.
The report concludes:
“The analysis illustrates that there are substantial lifetime benefits to graduates and the Exchequer associated with Open University part-time degrees.”