The Organisation for Economic Co-operation and Development (OECD) now puts the UK at 15th place in the number of graduates being produced compared to 4th place just 8 years ago.
According to the Telegraph that puts the UK behind Poland, Iceland, Portugal and Slovakia.
The OECD says that the UK has lost its 'competitive advantage' and that future university funding cuts will further damage our economy as graduate numbers are inevitably reduced.
The general secretary of the University and College Union, Sally Hunt, boarded the wagon and said "Today's report shows a worrying decline in the UK's standing in the world of education. We have plummeted down the graduate league table, going from a major player to a relegation candidate in less than a decade. The coalition Government's refusal to fund sufficient university places this summer will come back to haunt us. Other countries are preparing to play a leading role in the new knowledge economy while we risk consigning a generation to the scrapheap of inactivity and being left behind."
She was joined in battle by Dr Wendy Platt of the Russell Group (representing the top 20 universities) who said that Britain was risking its "competitive advantage which has made its universities the envy of the world".
The OECD says that a good education helps employability and that graduates earn more during their life so pay more taxes.
The Universities Minister David Willetts claims the coalition has taken action to increase student numbers so that "more people than ever are starting university this autumn" as well as funding an extra 50,000 apprenticeships.