All universities are equal, but some universities are more equal than others.

All universities are equal, but some universities are more equal than others.

We spend a lot of our time talking about social mobility, educational culture and aspiration. In my experience, this can be summed up best by a single example. I was in year 12 applying for University after making a mess of my GCSEs due to a mixture of laziness, mental health and more laziness. I wanted to aim higher. The advice given to me by my school “don’t worry about where you go for university, they are all pretty much the same”. In an attempt not to be seen as elitist, my school, in one sentence of advice, both killed aspiration and promoted the misunderstanding of university culture.

Where you go to university matters; for some careers, like Finance, it matters more than what you study. A good rule of thumb is that the more technical your role, the less university prestige matters. The less technical your role, the more it matters. University prestige acts as a great filter from the standard graduate employers and opportunities, and the opportunities that make the University almost instantly “worth it”. University is the foundation of your professional network, and different universities have different connections to industry, research and employment sectors. Even if we argue that university is simply a “stamp of approval” where you get that stamp can massively impact your outcomes.

Breaking down university prestige:

Prestige isn’t necessarily correlated with ranking, although often highly prestigious universities in the UK do end up performing very well in ranking tables. Instead, prestige is best measured in “who in my university works where”. The alumni network of your university is a map to all the hidden paths no one sat you down during in freshers and told you about. Alumni in these industries prove that there is a space for you there with the same university connection. Most of these prestigious universities are in proximity to London, there are more opportunities in London, and a majority of graduate schemes are found in London.

You have your typical schools too, Oxbridge (Oxford and Cambridge), St Andrews and Warwick. Older universities tend to have more prestige; they have deeper connections and have had more social proof in getting students into life-changing opportunities. Often, this social proof starts to compound on itself. What happens when we don’t recognise this difference in university performance and value? We create students who are under-informed about the opportunities in front of them.

Early into CMD Careers, we visited some schools in Corby, and one lad's question sticks with me. He was a maths A-level student with an offer to do maths at Warwick. “Will I get a job with maths at Warwick?” I appreciate that the graduate market is a bit funky right now, but Warwick is one of the best universities for maths in the UK, and the UK is one of the best countries to study in (even still). Warwick, if taken full advantage of, will fundamentally change this student’s life. From investment banking to strategy consulting, some careers are almost completely locked off to undergrads who don’t understand university prestige and the role it plays in many of the most lucrative jobs.

The RG and Oxbridge premium:

So, what actually is this premium created via prestige? Is it something we can put a number on, and if so, is that number worth having to deal with class struggle, homesickness and working harder at A-level to begin with? It’s hard to track this down, but in 202,4 it was estimated that the Oxbridge premium is on average £15,000, going up to double what a non-Oxbridge student would be looking to make equally far into their career (Corfe, 2024). These salary differences can be even more significant using data from Cherwell, the average earnings for a graduate from Oxford five years after graduating is £46,000 (Cohen, 2024), the average graduate salary in the UK is closer to the £32,000 mark.

The article goes on to show how stark these differences can be. Law Graduates, on average, from Oxford make £64,600 five years after graduating and creative arts as the lowest paid degree, makes £26,300. When we compare this to the neighbouring Oxford Brookes, we see serious pay disparity and the clear indication of an Oxbridge premium. The highest earning Brookes graduates made £45,300, and the lowest earning made £19,700. Career selection explains differences between university degree earnings, but it doesn’t hold up as well to explain inter-university earning differences for the same degree.

The Oxbridge premium is shrinking as graduate salaries fall, but relative to market, there is still a significant advantage to attendance at a prestigious university. The elite premium drops significantly with RG at around £3500 more than the national average. However, averages hide a very real selection bias towards prestigious universities.

All universities have world-class teaching and resources, but very few have the social proof, networks and student community to make good on these opportunities. For example, not all universities have a consulting society or investment club. These are major resources for breaking into these sectors, and sure, you could start your own, but the average student wants to walk a path, not carve their own.

This premium is the start of the difference:

More money is nice, and a fancy job is cool, but the prestige premium doesn’t end with this analysis; it starts with it. The UK job market is becoming more stratified. This means the same amount of opportunity is being pushed into more and more selective boxes. There is a world of difference between entering strategy consulting or investment banking at 23 and making your way there at 32. If you are an Oxford graduate starting on £45,000, there are two ways we can analyse the full advantage of this position relative to less prestigious universities.

First of all, your salary reported by the University is a base salary. It doesn’t include bonuses often seen in professional and financial services on £45,000 base salary typical bonuses could include pension contributions matched by your firm for example an easy 10% tax free bonus to salary right there already taking the full earning power to £49,000 throw in some modest bonuses and stock options and even at a middling firm a salary of £45,000 alone could earn you up to £55,000 once all the company perks and investments are applied. Bankers and Lawyers especially, will push bonuses that take an average of £45,000 and make it look like half the story.

Second of all, this is a starting salary. If you spend 5 years earning conservatively 42,000 a year with the competitive nature of pay rises at these firms, stock options and bonuses, you won’t stay at 42,000 for long. Many graduate schemes, especially in actuary, consulting and law, pay graduates significant pay increases per year or per examination. Starting salaries in your first few years of employment can change dramatically in a short amount of time, and the earlier you earn those salaries, the sooner you can leverage investment, savings and tax efficiencies.

So yes, all universities are equal, but some universities are more equal than others. 

Should we tell students about these premiums within the market, or is it more important that students enjoy what they study and where they go? In my opinion, student choice must come first, but only once they are actually informed of what their choice means. Telling students all universities are equal is cute, but it does nothing for a graduate cohort angry and confused at where they stand in an increasingly stratified market.