It is a crucial time for the sector, with recent reports stating that nearly half of all HEIs in England are in serious financial jeopardy. The Office for Students (OfS), the higher education regulator, recently revealed some rather shocking news. As of the end of July, 117 of 270 universities—43%—are on track to end the year in the red. This shocking development represents the third straight year of deteriorating fiscal conditions for most colleges and universities. A decrease in international student enrollments is the main factor behind this drop.
The University and College Union (UCU), representing academic staff, has reported rising industrial disputes over potential job losses at universities across various cities. Jo Grady, the union’s general secretary, said this has all contributed to an unprecedented financial crisis our universities are in right now.
Grady said, “COVID-19 has put our universities in an unprecedented economic crisis. We need a laser-like focus to defend higher education, our most successful remaining global industries.”
So dire are the financial challenges that Universities UK (UUK), the body representing 141 institutions, was moved to survey them. Our findings indicate that almost half of the universities that responded have had to shut down courses. On top of that, they’ve cut access for students just in the last three years. Continuing down this trend, we risk limiting educational opportunity and harming the quality of higher education broadly.
Susan Lapworth, chief executive of the OfS, noted that the organization is “constantly thinking” about when students may need to be informed about the financial situations at institutions expecting deficits. She focused on the real consequences that the drop in international students is having on university budgets. Applications have clearly decreased from countries including Nigeria, Pakistan and Sri Lanka because of upcoming visa restrictions scheduled to start in January 2024.
In Q3 of last year, the international student number was nearly 16% lower than they had originally expected, according to the OfS report. That’s why university leaders are understandably alarmed by this steep, sudden decline. The additional revenue brought in by much higher fees paid by international students helped shore up university finances, after domestic tuition fees were frozen.
Vivienne Stern, chief executive of UUK, described the prospect as “deeply sobering.” She said, while bad, this is not surprising given the lack of domestic tuition fee increases and research grants being frozen. To be sure, she stressed the task is huge. She introduced a sense of urgency, saying that absent federal engagement, none of this will be enough.
Meanwhile the UK government is on a “sieve” of university education and funding. This review is supposed to file its report by this summer, leaving more uncertainty in its wake. Fees will increase this fall to £9,535 for students from England. The future of these fee structures is very much up in the air.
Just last month, the OfS raised concerns over the need for universities to stop submitting overly optimistic financial plans. These plans forecast that over 50% of their growth in tuition fee income by 2028 will come from international students. To put it bluntly, Education Secretary Bridget Phillipson has called BS on these boogeymen. She called for more reforms to cement the underpinnings of higher education, holding universities accountable for better financial stewardship.
Despite these pressures, Lapworth reassured stakeholders that the OfS does not currently expect any large or medium institutions to fail within the next twelve months. Anxiety is cresting, too, among leaders at America’s research universities. They’re already looking to the government’s forthcoming, long-awaited draft plan for controlling immigration, which could introduce even more limits on student visas.
Our higher education sector is in serious trouble financially. Educators and administrators are urging lawmakers to act right now to fix these problems.
“Fund Higher Education Now” – Branwen Jeffreys & Hazel Shearing (UCU sign)
“Another Academia is possible” – Branwen Jeffreys & Hazel Shearing (handwritten sign)
