Why UK Universities are Going Bankrupt

This video was brought to you by Ground News. Universities are one of the few things the UK still does well. British

universities

such as Oxford and Cambridge are considered some of the best in the world and hundreds of thousands of young people come from all over the world. study in the UK every year, unfortunately like basically everything else, UK

universities

are running out of money and many universities are borrowing significant sums just to stay afloat and industry experts have recently started to warn about the risk of outright

bankrupt

cies at some of the UK's largest universities. universities, so in this video we're

going

to take a look at the emerging university crisis in the UK, how the government's controversial immigration policies have apparently made things worse and why the UK really needs to sort this out before we start, yeah You haven't done it yet, please.

Please consider subscribing and ringing the bell to stay informed and receive notifications when we post new videos. Simply put, the fundamental problem for UK universities is that they simply are not receiving as much money as before for three reasons: first, the loss of EU funding after Brexit, when the UK was part of the EU, UK universities received approximately €800 million a year in financial support, unsurprisingly, since Brexit that figure has fallen to virtually zero, the government has promised to replace these funds with a combination of loans and grants, including The so-called Shared Prosperity Fund and the recent announcement that the UK would rejoin the EU's Horizon funding scheme should relieve some of the pressure, but universities have complained that the allocation of funds is unpredictable and the amounts totals involved are not always equal. add a second inflation for those of you who don't know, in England accredited universities and colleges can charge a maximum tuition fee of 9250 per year for full time university courses, which is basically what everyone charges now, this might sound like a a lot of money and it may seem that way when you are paying off your student loans but this number has barely changed since 2012 when tuition fees were first introduced at £99,000, they rose by £250 in 2017 but this is obviously a long way behind of inflation. and analysis by H data suggests that the 9,000 fee originally introduced in 2012 would now be more than £12,000 if it had risen in line with consumer prices.

This has also forced universities to spend essentially less money on tuition, with actual spending having fallen by almost 20%. in recent years, thirdly, the lack of foreign students because tuition fees have not increased with inflation. Nowadays, UK universities are basically making losses for British students. A recent analysis by the Russell group, for example, found that teaching the average student costs around £11,750 meaning universities lose around £2,500 per student, which is expected to rise to almost £5,000 for 2030, as inflation continues to erode the real value of tuition fees so far, although universities have been able to offset this loss. growing deficit by attracting more and more international students who generally pay around double that of British students or approximately £20,000 each, the fraction of total income held by non-EU international students has now increased from less than 5% in the 1990s to around 20% today and in 2022, the last year for which the government published data, there were almost 700,000 international students studying in the UK;

However, this strategy has become increasingly difficult for a couple of reasons, first in an attempt to attract more international students than certain universities have. began to reduce entry requirements for international but non-British students, the University of York, for example, now admits international students with the equivalent of B BC at A level, while it normally requires 3 A's from British students. This has become politically controversial and upset some British students who feel that we are losing university places just because the UK higher education model is not working, but secondly, and perhaps more pertinently, international students have become involved in the government's efforts to reduce net immigration to the UK, which reached an unprecedented high of 745,000 in 2022. of this was due to student visas in 2022, the Home Office issued almost 500,000 study visas and a further 140,000 visas for dependents, that is, students, partners and children, an eight-fold increase compared to 2019 in an attempt to reduce these figures at the beginning of the year.

Last year the government banned students from bringing dependency to the UK, although this policy is defensible after all, that eight-fold increase suggests that the system is being gamed that it was an improvised explosive device using language quite aggressive that was widely reported in the international press. and has apparently scared off some international students. Data from enoli, for example, a platform many foreign students use to apply to the UK, suggests a 37% year-on-year drop in foreign postgraduate students, with the steepest decline coming from South Asian countries and Nigeria similarly. Data from ucast suggests that overall non-EU applications grew at their lowest rate for six years, so unsurprisingly this has put university finances at real risk.

Analysis by PWC suggests that without a significant increase in international students around 50% of all UK universities will lose money by 2025 and that figure could rise to 80% if there is a significant decline in the number of overseas students. There have already been some rumors in the industry that a handful of universities are now at risk of

bankrupt

cy if a large university goes bankrupt. Universities are supposed to have contingency plans to merge with each other in the event of bankruptcy, but whether this would actually be politically or practically feasible for a large university is still unknown, and the government would certainly come under pressure to bail them out.

So you get the idea that universities are running out of money in the UK and this is particularly bad news because, well, universities are one of the few things the UK still does well. Global rankings consistently show that the UK has more top-rated tertiary education institutions than the rest. of the EU along with Oxford, Cambridge and Imperial reliably appear in the top 10, unfortunately there is no obvious answer, neither political party wants to significantly increase public spending and it is difficult to imagine the electorate tolerating higher taxes to finance a sector that many voters see as an overly politicized industry designed for out-of-touch elites.

Raising tuition fees is also not a great solution given that the government already estimates that around 40% of students will never fully repay their loan and are similarly moving towards a system where prices better reflect the real value of different loans. Titles. It makes economic sense, but it could price poorer students out of more prestigious courses. However, it is imperative that this government or the incoming Labor movement gets this right, given that universities are one of the UK's major exports and an effective vehicle for British soft power, now to see if Labor actually succeeds. In this, you'll need to keep up to date with policy developments here in the UK and, lucky for you, our sponsor Ground News is your ultimate tool for easily navigating news coverage.

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