Unis could go bust if coronavirus keeps international students away, experts warn
Some unis rely on international tuition fees for over a quarter of their income
Unis face going out of business with international student numbers dropping by as much as 20 per cent even in best-case coronavirus scenarios, experts have warned.
A handful of Russell Group unis rely on international students for over a quarter of their income, analysis by The Tab can reveal, including Durham, Warwick, and Birmingham.
As worst-case scenarios predict unis being hit with an 80 per cent drop in international students due to coronavirus, unis are ferociously competing to attract UK students to plug a gap which “could be the difference between being viable and going bust” for unis.
Newly-released HESA data on the financial health of universities, analysed by The Tab, shows over 20 universities of all kinds where non-UK tuition fees make up over a quarter of the uni’s overall income.
Although the largest percentages are at specialist institutions, such as UAL and London Business School, there are a number of Russell Group universities and smaller unis with a heavy reliance on international students.
LSE, Queen Mary, Warwick, Birmingham, and Durham all depend on international fees for over a quarter of their income.
“My sense is that the numbers will fall but not by as much as some of the worst predictions, which are north of 80 per cent,” Nick Hillman, director of the Higher Education Policy Institute, told The Tab in response to the findings.
“I suspect universities are modelling pretty much every outcome between a 20 per cent drop and an 80 per cent drop.
“A big drop in demand among international students to study in the UK would be very very bad news. For some institutions, it could be the difference between being viable and going bust.”
As the coronavirus crisis took hold, universities rushed to snag A-Level students with unconditional offers. This lead to a ban on unconditional offers, and the threat of a fine from the Office for Students. Even UCAS polling suggests 14 per cent of UK students aren’t planning on continuing as normal with their uni admissions.
Martine Garland, a lecturer in Marketing at Aberystwyth University, says unis will be forced to turn to getting in more and more UK-based students to make up the numbers – especially given it takes three domestic students to plug the gap left by one international student.
“The pre-1992 and Russell Group universities will find this easier to do than the newer institutions just by virtue of the ‘brand’,” Garland told The Tab. “This is why a cap on numbers is a good thing – to try and protect the post-1992 universities who are very dependent on student numbers/tuition fee income.
“Universities will also look to third stream income opportunities to try and plug any gap, the research intensive universities have more resources to leverage in this way.”
Universities may also be hostages to fortune, says Hillman, with visa rules and the spread of COVID-19 itself dictating the severity of the crisis. However, “there are things that universities can do to try and limit the reduction too, such as communicating clearly with applicants and getting ready to teach the first term of 2020 remotely if necessary.”
Beyond unis going bust, the drying-up of resources if international students stay away “is a problem for the whole country,” Hillman says. “Less R&D means fewer medical breakthroughs, less technological development and, in time, fewer successful British companies.”