More than four in ten universities across England expect to be hit with financial challenges by the summer, a new report from the Office for Students (OfS), which regulates higher education providers, has found.
Universities, it said, were closing courses and selling buildings in order to cut costs. But “significant reform and efficiencies” would be needed to turn their fortunes around. It cited a drop in international students coming to the UK as being the main reason for these financial challenges.
Universities UK (UUK) described the report as “deeply sobering” and the education secretary said it highlighted the need to raise tuition fees in England.
117 of the 270 higher education institutions (43%) registered with the OfS expect to be in deficit by the end of July. This is even after course closures, job axes, and assets being sold off. It marks the third consecutive year of worsening finances, mainly due to a fall in international student numbers, especially after visa changes in January 2024, the OfS said.
There have been 16% fewer international students last year compared with what was previously expected, the report said. Universities are increasingly relying on higher fees from international students as tuition fees from UK students are not keeping up with inflation. The financial plans predict that over half of the growth in income up to 2028 would come from international students, but the OfS warns that this is optimistic.
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