Study finds UK economy gaining 10 times what it pays to educate students

UK graduates contribute to the economy almost 10 times what it costs the state to educate them to degree level, new research has revealed.

An IPPR think tank and UCU academics union report suggested that graduates bring in £180,000 more than those with A-levels over their working life.

The report found that currently an average degree costs Britian just under £18,800 per student

According to the research, the UK had the third highest number of graduates among advanced industrialised nations in the year 2000, but had fallen to the 15th position by 2008 because competitor nations had been investing at a faster rate.

"Recent research has suggested that the number of students graduating in the UK is likely to fall further following tighter restrictions on student numbers, with 15,000 fewer higher education places in September 2012 compared with the previous year and around 25,000 fewer places in English universities," the report said.

The reported added that India is planning 800 new higher education institutions by 2020.

"In India they are churning out hundreds of thousands of graduates and we are churning out a small number and that will restrict our ability to expand," it said.

The research claimed that recent UK reforms to the higher education system have led to reductions in courses available in key areas such as science, technology, engineering and mathematics (STEM) skills.

However, the study warned that reforms leading to fewer graduates will limit the UK's ability to compete globally and also cited that with the continuing economic slowdown, the country needed to develop measures, which will create a competitive advantage for the future.