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WEEKEND READING: Students and Universities UK align over bailouts

  • 25 April 2020
  • By Rachel Hewitt

Prior to the Coronavirus pandemic, there were many factors already impacting the stability of university finances. Low numbers of 18-year olds in the population led to universities battling to recruit enough students. The potential risks of the Augar review leading to lower tuition fees had not been fully put to bed. There were hints from Government that a crackdown on ‘low-value’ courses was on its way. Research was continuing to be underfunded, despite commitments to increase spending. The impact of Brexit on the ability to recruit students from overseas was still uncertain.

It is already challenging to think back to these problems and compare them to the position we are in today. The Coronavirus crisis has changed so much of how the world operates and with that, has significantly impacted the UK higher education system. It has led to the cancellation of A-Level exams, shaking up the admissions system, and the move to online teaching for the remainder of this academic year and potentially at least some of the next. This has had a substantial impact on both students and applicants, with almost one-third less confident they will get into their chosen university.

Universities that were in a precarious financial state prior to the crisis will find themselves considerably worse off in the current circumstances, with some predicting up to an 80% drop in international student numbers. While the impact on higher education has been less immediate than in some other sectors, there is a risk that the threat to universities could be deeper and longer, coming into effect across multiple academic years. This has led to Universities UK calling for package of support measures from the Government, including:

Provide bridging loans and support for changes in lending terms for institutions suffering significant income losses who need either temporary support to maintain cashflow or need support until a recovery in student numbers and income in subsequent years.

It is yet to be seen how Government will respond to these proposals. As highlighted by Nick Hillman earlier this week, policy-making tends to be a slow, iterative process, for good reason. Rumours from Whitehall suggest Gavin Williamson is fighting universities’ corner with the Treasury. Emma Hardy, Shadow Minister for Universities, has written to the Universities Minister, calling on her to ensure no university goes bankrupt.

Whatever approach is taken by Government, it is essential that it works for universities and supports students, both those already in higher education and those about to enter. With this in mind, I have taken a look back at students’ expectations about what should happen if their university were to get into financial difficulty.

In March 2019, we published Students back bailouts: Students’ views on the financial health of universities, which gathered the views of students on the financial sustainability of universities. Back then, 83% of students believed their university was in good financial health. The polling demonstrated that students’ views align with Universities UK’s requests of Government, with over three-quarters (77%) of students surveyed believing the Government should step in to support universities in financial trouble. Over half (51%) also believed their fees should be refunded in such circumstances.

Perhaps even more important is students’ perspectives on Student Protection Plans, designed to provide students with information about what should happen if a university were to close. When we asked students about their knowledge of these plans, the overwhelming majority were unaware of them and hadn’t seen their universities own Student Protection Plan, despite the Office for Students guidance stating that they ‘must be easily available to current and prospective students.’ There is no clear evidence to suggest that this has changed much in the last year.

The polling also showed students are keen to have some level of awareness of their universities’ financial position. Almost all (97%) of students said they would want to be made aware if their university was in financial difficulty and 84% said they would have been less likely to apply to a university in financial difficulty.

The Covid-19 pandemic has created challenges for all stakeholders of higher education: for students and applicants who are entering or continuing in higher education during such uncertain times; for institutions in navigating the complex environment they find themselves in; and for the Government and regulators in how they support the system. While much remains unclear, it is clear that students and applicants need continued levels of transparency from their universities and that it is not only university leaders who are supportive of Government bailouts for universities at risk.

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