UK Universities risk falling into financial deficit as number of foreign students from Africa and India falls, new report says

Friday, January 12, 2024 – Large numbers of UK universities are at risk of falling into financial deficit due to a sharp decline in number of international students coming into the country due to hostile rhetoric by Prime Minister Rishi Sunak’s government, the head of the sector’s main lobby group has warned.

Vivienne Stern, the chief executive of Universities UK, which represents more than 140 universities, said the sector was facing the prospect of a “serious overcorrection” thanks to immigration policies that deterred international students from coming to study in Britain.

“If they want to cool things down, that’s one thing, but it seems to me that through a combination of rhetoric, which is off-putting, and policy changes . . .[they have] really turned a whole bunch of people off that would otherwise have come to the UK,” Stern told the Financial Times.

Stern’s plea for policy change and rhetoric reversal comes as it emerged that some top universities including York, which is a member of the elite Russell Group, were being forced to soften their entry requirements in order to maintain numbers of overseas students.

“The government needs to be very careful: we could end up with, from a policy point of view, what I would consider a serious overcorrection,” she added.

With the £9,250 domestic tuition fee effectively frozen for the past decade, UK universities have become increasingly reliant on non-EU students to make ends meet, with fees from non-EU students now accounting for nearly 20 per cent of sector income.

Universities warn privately that numbers have softened sharply this year following a series of hostile policy moves by the government, with enrolments from key countries in Africa and India falling in recent years.

One senior university insider told the Financial Times that the sector as a whole had been “spooked” by data that showed the number of international students taking up places in January 2024 was “way below the bottom end of projections for everyone”.

In January, Sunak highlighted changes in government policy to stop international graduate students from bringing family members to the UK, adding the policy was “delivering for the British people”. 

Remember in December the UK government announced that it was reviewing the so-called “graduate route” enabling international students to work in the UK for two years after they graduate and announced a crackdown on “low-value courses”, even though only 3 per cent are failing to meet criteria set out by the regulator.

Also reports by FT show that data from Enroly, a web platform used by one in three international students for managing university enrolment, showed that deposit payments were down 37 per cent compared to last year.

New analysis for UUK by consultants PwC found that the combination of falling international student numbers, frozen tuition fees, rising staff wage bills and a softening in UK student numbers was leaving the sector facing a perfect storm.

“You take those things together, and you’ve got a big problem,” Stern said, warning that the government needed to wake up to the risk posed to a sector that contributes £71bn to the UK economy every year.