Skills Minister Jacqui Smith said it was important that prospective graduates “choose carefully”.
“Don’t move toward a degree by default,” she says.
“Going to university and getting a degree is one of the most transformational things a young person can do. But it is not a universal guarantee of success and not all degrees are equal.
“Along with variation depending on the subject, a lot of franchised and poor quality courses do not give a good deal to the youth, thereby selling out the dream and then leaving the students in limbo.”
Responding to the IFS report, Nick Harrison, chief executive of the Sutton Trust, a social mobility charity, said that although university is not a guarantee of “financial success”, it remains “the most reliable route to upward mobility”.
He added: “Most graduates continue to see large financial gains over their lifetime, and these gains are often largest for young people from low-income backgrounds.”
However, he said the report raised an “uncomfortable question” regarding the career options available to young people.
“If we’re telling young people not to go to university, what are we really asking them to do? There’s no shortage of criticism of so-called low-value degrees, but there is a persistent lack of high-quality alternatives.
“Apprenticeships and technical pathways can offer great potential for progression and success, but there are not enough of them available to be a viable option for many young people.”
Vivienne Stern, chief executive of Universities UK, said it was important to highlight that some degree options, such as arts, “were not motivated by money”.
“We must recognize that these disciplines also feed the creative industries, which are a huge economic driver for the UK.
“In the age of AI, we will value understanding how humans think and act in the future, not less.”