Universities in Crisis

Britain’s bloated university sector needs the current crisis.

British universities are in a perilous position. Declining student numbers and growing international competition has left many illustrious institutions facing financial ruin, with 35% now running a budget deficit. Last week, the Office for Students (OfS), the higher education regulator, announced measures to manage a potential wave of university insolvencies, estimating that 10 higher education institutions will fall into bankruptcy over the next four years.?

Like his predecessor, Sir Keir Starmer has shown little appetite to offer the sector a life raft, with legislation on universities notably absent from the recent King’s Speech. With the new education secretary also ruling out any kind of bailout, it is clear that universities will have to find a solution on their own.?

They will find little sympathy from students themselves. The simple truth is that the current crisis reflects a sustained failure to offer good value for money. Despite the 2017 tuition fee freeze, attending university remains prohibitively expensive for many. This, coupled with the proliferation of so-called ‘Mickey Mouse’ degrees has led to too many young people graduating with too much debt and too little in terms of meaningful qualifications. Student experiences during the pandemic were particularly dire, with universities inexplicably charging the same fees for courses taught entirely online.

As you would expect, this is disputed by universities themselves. They argue that graduates can expect to earn significantly more over the course of their careers than non-graduates, regardless of whether they have earned degrees in the arts, sciences, or something more ‘post-modern’. But this assessment gives too much credit to universities and overlooks the graft put in by graduates themselves, who are the ones who put in the hours once in employment.

So how should universities dig themselves out of this hole? Increasing fees for domestic students is not the answer. As it stands, the current system requires incoming students from the UK to commit to an average of ￡27,750 in tuition fee debt for a bachelor's degree. Raising fees and the resulting debt burden will simply deter students - especially those from the poorest backgrounds - from pursuing degrees.?

Nor will foreign students provide the solution. For too long, universities have gorged themselves on the revenues provided by international students, who pay up to ￡30,000 each year for their courses, far more than domestic students pay for the entirety of theirs. As a result, many universities have invested heavily in recruiting students from overseas. However, this has proven to be something of a false economy, as competition from universities across the world has seen numbers of foreign students steadily decline. Having got drunk off the riches gleaned from international undergraduates, with fewer now enrolling, the hangover is setting in.?

Instead, universities need to go back to first principles. Rather than viewing themselves as businesses intent on maximising students numbers and revenues, they need to view themselves once again as educators. The current funding crisis will inevitably mean some institutions do not survive. Yet one upside of this may be a reduction in low-value degree courses, and a reconcentration on teaching standards. A focus on quality, not quantity.?

Universities have always been a source of great national pride, acting as a catalyst for social mobility and socio-economic integration. But for too long, the ones that thrived were often not those that offered the best teaching or opened the most doors, but those that could enrol the most students and maximise their profits. Perhaps in the long run this moment of peril will lead to the betterment of the higher education sector. This reset is arguably long overdue, and may be for the best. After all, every crisis is an opportunity.