How Britain's higher education is evolving as a result of the financial crisis

British universities are facing an increasingly dire financial situation as a result of a sharp decline in the number of international students enrolled in several countries.

This trend is mostly the result of India, the UK's second-largest source of international students. The number of Indian students fell from 139,914 to 111,329 between 2022–2023 and 2023–2024, a 20.4% decrease, according to data from the UK Home Office.

According to the Office for Students, more than three-fourths of British universities could be in deficit by 2025, with one in four of the best universities already cutting staff and funding. The reputation of British universities, which are thought to be among the best in the world, is in danger because of these cuts.

British universities are facing an increasingly dire financial situation as a result of a sharp decline in the number of international students enrolled in several countries.

Reduced "home" tuition costs: The UK government regulates tuition fees for domestic students, so raising them has not gone over well politically. These were set at 9,250 pounds for nearly a decade until a small increase of 250 pounds was recently approved.

If inflation is taken into account, fees for each student should ideally be between 12,000 and 13,000 pounds, according to Professor Dame Sally Mapstone, vice-chancellor and principal of the University of St Andrews.

Universities' rising operating costs, staff salaries, and pension commitments are all contributing to the widening gap between tuition and the actual cost of education.

Professor Sir Peter Mathieson, the principal of the University of Edinburgh, stated to The Indian Express that "public universities in the UK are actually underfunded." "We don't have enough funding for our research. Research funders give us money for supplies, equipment, and some payroll costs, but they don't pay for everything. Furthermore, home (local) students might not get adequate funding.

Universities are compelled to rely on international students, who can contribute up to 26,000 pounds annually, to help finance their operations as a result of this systemic underfunding.

Professor Sasha Roseneil, the vice-chancellor of the University of Sussex, stated to The Indian Express that "I suppose any business is dependent on its markets." As a result, as the number of international students rose, institutions found themselves increasingly dependent on their employees.

Increased international competition and visa restrictions: The Tory government, led by Rishi Sunak, last year prohibited international students from bringing family members into the country and threatened to terminate the graduate visa program, which allows graduates to work in the UK for two years.

Even if the latter survived, the "unwelcoming" message caused a sharp decline in international enrollments. Due to the disproportionate revenue contribution from international students, Professor Mapstone notes that many institutions experienced steep declines, placing a significant financial burden on them.

Meanwhile, other places to learn English have become more attractive in recent years. "Australia and Canada's much fiercer competition for that taught student market has had a significant impact on that market,"

According to Professor Mapstone, a board member of Universities UK, which represents the interests of 141 universities, restrictions on dependent visas were the main cause of the 30–40% drop in international student enrollment that most universities experienced this past year.

Postgraduate taught courses are the most negatively impacted. Professor Roseneil explains this by saying that "mature students" who are pursuing postgraduate degrees often want to bring their families with them. The University of Sussex, which has 30–32% international students (India is the largest source, followed by China and Nigeria), saw a 40% drop in international enrollment in the fall of 2024 as a result of reports of visa restrictions.

"I think that women, who are international students who want to study in the UK, have been disproportionately affected."

However, the effects differ for each international profile. Restrictions on dependent visas have had little impact on St. Andrew's University, which has 10,000 international students, half of whom are from the US and Europe rather than South Asia.

What steps are academic institutions doing to alleviate the financial deficit?

Both short-term cost-cutting initiatives and longer-term strategic adjustments are being implemented by UK universities.

Reductions in staff: A lot of universities, including Cardiff University, have implemented voluntary layoff plans.

We currently have a voluntary program in place where anyone who wishes to leave is encouraged to apply. Additionally, we'll provide them with a substantial package," Sussex Professor Roseneil stated.

Surrey University plans to establish a branch in India. "It's part of the diversification strategy of any university," says Professor Lu, who views these initiatives as a way to promote long-term financial stability.

Exeter recently established a campus in Cairo. "We will be working with Ainshams University to offer both Exeter degrees and joint degrees," says Professor Lisa Roberts, the University of Exeter's president and vice-chancellor. Cardiff is investigating opportunities in Southeast Asia, China, Kazakhstan, India, and Saudi Arabia.

What prospects do UK universities have?

Several policy changes are being promoted by UK institutions in an effort to stabilize their finances.

"We are pushing the government to evaluate the equality implications of the reform in respect to dependents," says Professor Mapstone, implying that certain student groups might be disproportionately affected by visa restrictions. She goes on to say that in order to ensure that students are not impacted by migration control measures, they should not be included in the net migration estimates. Students generally don't want to come to the UK and stay there for good.

Professor Mapstone, who is also in favor of higher government spending, says, "We think there should be a rebalancing which permits the UK government to say yes the student should contribute to the cost of their education but it benefits the country as well as the individual."