How Much Higher Education Adds To The Economy
Universities Bring Big Money into Cities
I attended a university graduation the other day, my second one in three (3) years.
It has been many years since I graduated university, and much has changed, and much has stayed the same.
The words spoken, the processions, the graduates standing outside with the proud families taking photos. It is indeed a proud moment, and a time for reflection and moving onwards.
Myself, when I graduated university, I was a bit lost. All those years know what was next, classes, studies, writing….you just took what had to be done and the time for granted.
Then you graduate, and you need to go out into the real world.
Just like being born, some of us graduated university crying, kicking and screaming…only much older.
As I watched all the graduates, the promising future of academia and the business and possible political world walk up and receive their accolades, it dawned on me.
Hey, uni isn’t cheap.
All these students, hundreds of them, have paid thousands and thousands for tuition, and all the other expenses associated with going to university just for this day.
I started running some numbers in my head.
Hey, this is what I do.
I tried counting the number of students who were graduating that day. I got up to a few hundred and decided I may as well just to a guesstimate and say there were 500 students that were graduation.
University fees are now £9,000 a year as tuitions were raised to this back in 2012. So for a three year degree from uni, the tuition alone is £27,000. So if 500 students graduate, and each has a three year degree, that’s £27,000 multiplied by 500 or £13.5 million! And that was just one university’s graduation that day. Across the country there could be many more.
And some want the university fees to be raised even higher to keep up with inflation, and also be able to hire better instructors and professors.
The Vice-President of Universities UK, Janet Beer said that tuition fees were “being eroded considerably by inflation”.
“Allowing the value of the fee to be maintained in real terms is essential to allow universities to continue to deliver a high-quality learning experience for students”.
“Financial support for students’ living costs needs to be improved.”
She added, “that students were more concerned about the lack of support when they were studying than the debt being built up to be repaid later.”
“These changes should be made now to ensure universities can continue to provide high quality education that meets the needs of students.”
What this got me to thinking was how much these universities and the students, contribute to the economy. In my city there are three major universities, and it is a major source of revenue to the local economy, and not just through the university fees, but housing, food, and many other day-to-day expenses the students have.
Some estimate this figure higher to £95 billion!
Students expenditures supports over 830,000 jobs across the UK.
This is a large contribution to the UK’s over all economy.
As the city I live in has three (3) universities, combined with the public administration sector, they make-up 40% of the city’s workforce.
With all this in mind, I decided to do a little deeper research, and “take it to the street” as they say.
Housing: Just a quick search for student accommodations proves to show there are plenty of places advertised as student housing. And walking around the city centre, you can see they are still building more and more places for students to live.
The builders and letting agents do make it easy on the students as many places are all bills included. This includes Wifi and makes it easy for students to plan their finances.
I took a walk over to a popular area where students live and just looked around. On one street alone there were 10 houses advertised as student accommodations, and each house had anywhere from five (5) to up to 10 bedrooms.
In inquiring at one of the houses I was informed the average rent per room was £350 a month, including all bills.
A house with 10 bedrooms would generate £3,500 per month in rental income. In adding up the properties I saw on just the one street, I figured on average maybe 70 bedrooms, and if we average £350 a month per bedroom, that’s £24,500 a month in rent, and that is just for one street! And just the houses I saw letting rooms.
It’s easy to see that the universities bring big money to town.
Food: I next decided to get a grasp on how much money students may be spending on fast food, burgers, pizzas, and fast food in general.
Just around the corner form the houses is a major roadway leading into the city centre. I found dozens of fast food places, and kebab shops.
In speaking with the manager there I inquired as to who his customers were, and he stated 90% students. He stated that when the universities close for breaks, business drops off massively.
And that was just one food shop.
Nearby there is a large Asda supermarket. I wandered through looking at the people that were shopping there, you guessed it mostly students.
Then you need to consider the financial impact the students have on the pubs, clubs, bars and off licenses.
With so many universities across the country, and some cities having multiple universities, it’s easy to see how it can add billions to the economy.
The then President of Universities UK, Professor Sir Christopher Snowden in 2014 stated, “It is clear that universities are making an increasingly significant contribution to the UK economy, both in terms of contribution to GDP and creating jobs. The sector also attracts significant investment from overseas.”
“While the study looked at only one aspect of economic impact, we should not forget also the major contribution to the wider economy from producing skilled graduates and generating ground-breaking research. Universities also produce significant non-economic benefits. They improve the life chances of individuals and also provide a social and cultural boost to communities through access to art, music, sports and other facilities.”
“With the 2015 general election on the horizon, this report serves as a timely reminder to policymakers of universities’ growing impact on local communities, jobs and the wider economy.”
Higher education isn’t all about learning, it also is about contributing to the economy.