Value for Money Versus Lifetime Return on Investment

People in higher education are using the term ‘value for money’ more than ever before. But everyone would do well to heed Simon Sinek’s comment that, ‘Value is not determined by those who set the price. Value is determined by those who choose to pay it’. That’s one reason that institutions interested in attracting the best students are using data to demonstrate graduate outcomes and a ‘lifetime return on investment’.

What’s Wrong With Value for Money?

Offering ‘value for money’ should be a given for any university interested in doing its best for students but is often used as a signal for tactical promotions based solely on the period of study. The cost of studying at the university becomes the measure of ‘value’ and institutions attempt to distinguish themselves on this basis rather than on quality and longer-term outcomes. The most obvious manifestation is where institutions highlight specific discounts on their courses but there’s also plenty of messaging about comparative fees, low-cost accommodation and even ‘cheap’ student cities.

For many involved in international student recruitment the ‘value’ focus has been driven by predictions that the economic growth and demographics of India[1], Nigeria and Vietnam[2] will deliver the next wave of international student mobility. Stated simply, there is a view that these students are more price conscious and will select their institution solely on the cost of studying there. This is a simplistic model that is not in the interests of the student or the university.      

It is a misconception to think that ‘value for money’ is only relevant to decision making by potential students from lower income nations. Evidence suggests that seeking ‘value’ is a key consideration for students from all countries[3] and they are sophisticated enough to understand that it’s not just about their time at the university. They are also able to scan their choices around the world at the touch of a button to review their study options and will, increasingly, be able to gain insights into the long-term return on their investment in higher education.      

Even if there are some students for who the short-term, lowest price of study is the main driver it is self-evident that when graduates return home it becomes obvious which universities are equipping them to build lives and careers. Growing numbers of internationally educated students mean employers have a wider choice and will be seeking graduates who have made wise choices based on quality, relevance and reputation.

Focus On Lifetime Return On Investment          

Delivering powerful and coherent messages on ‘lifetime return on investment’ is more difficult than simply finding ways to give money away through cutting prices. But it does offer a route to differentiation, long-term relationships with graduates and better access to employers around the globe. For institutions interested in building their global reputation and a sustainable model for growth it is a strategic play built on confidence and insight about what makes them and their students special.

Students from emerging and growing source countries are looking for the UK, as a quality higher education destination, to provide quality, fulfil aspirations and build a better future for themselves. They will make a substantial investment of time, money and effort if they have confidence that their faith will be rewarded with opportunities to develop their careers and contribute effectively to their home country’s economy. Their successes will also help establish the UK as a preferred choice in an increasingly competitive global market.

One key is working with robust international student graduate outcomes data that provides a sound basis for calculating the ‘lifetime return on investment’ of a UK degree when the student returns to their home country. With over 90% of international graduates studying in the UK returning home, this is also compelling evidence that the institution cares about the lives and careers of its students.  That is why Asia Careers Group gathers data on the “First Destinations” of returning students but also tracks a graduate’s career progression over time to provide longitudinal data on the value of a UK degree.

 As the dataset increases year by year the findings are developing new levels of depth and offering unique insights into the progress of UK graduates around the world. It already demonstrates that a UK degree provides a ‘return on investment’ in a relatively short space of time and establishes a pattern for the rest of the graduate’s life.    With a sample size of over 40,000 Australian and UK graduates in key international and emerging Asian markets broadly reflects the dataset also provides individual institutions with robust comparative data on their performance and strengths. 

Evidence Base For Optimism In UK Higher Education

Initial analysis of the UK data was presented in partnership with the Department of Trade, Foreign and Commonwealth Office and UK Visas at the recent UUK IHEF 2019[4]. Some highlights of the analysis were:

• Most international students pay back the cost of their degree within four years.
• Graduates from Hong Kong and Singapore pay back the cost of their degrees more quickly, due to higher graduate salaries.
• Indian and emerging ASEAN nations tend to take longer to pay back the cost of their UK degree. Indian students take around seven years to pay back the cost but, having paid back their loan, their degree makes them better off due to the lower costs of living in India.

Asia Careers Group is working directly with partner universities in the UK to use the data in ways which differentiate the institution from other providers. This has become a way of substantiating the mission of the university and the material impact it has on the graduate outcomes. It has also led to enhanced engagement with influential alumni and developing opportunities to build employer networks overseas.

The messaging from those universities is increasingly about purpose, outcomes and employability underpinned by quality and a world class, lifetime return on investment. This is a world removed from bland, tired and increasingly desperate marketing based on price, or, as a recent campaign claimed, that the UK is the ‘land of fish and chips’. Even more importantly, universities who understand their graduate outcomes are better able to respond effectively to developing markets and opportunities.

Louise Nicol is director of Asia Careers Group SDN BHD, a company based in Kuala Lumpur, Malaysia, which provides longitudinal graduate outcomes and average salary data to both the UK and ASEAN governments and UK higher education institutions. Contact - [email protected]

[1]https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F08%2F24&entity=Ar00120&sk=13554DFB&mode=text&fbclid=IwAR3EtbxFa-m4t8ms03iQCBOvAiqfN4ro9TbdJ_nEzJuF5smugSB2QntR81k#

[2] https://www.studyinternational.com/news/indian-students-future/

[3] https://www.hepi.ac.uk/2017/11/29/universities-must-listen-international-students-think-value-money/

[4] https://www.slideshare.net/slideshow/embed_code/key/KUtvIHOvtcdKQv