Around one-third of students worry their university could go bust and one-half expect the Government to take over if it does

There is considerable speculation about the financial difficulties facing universities, with 40% of higher education institutions thought to be in deficit in 2023/24. One or even a small handful of institutions could soon be insolvent. Despite this, there was no new support contained in the recent Budget.

In response to the concerns about institutional instability, the Higher Education Policy Institute (HEPI) have worked with the polling company Savanta to ask students about the possibility of their own higher education institution failing – and what they think should happen if this were to occur.

• Almost one-third of students are worried their higher education institution could go bust, made up of 5% who are ‘very worried’ and 26% who are ‘quite worried’.
• Male students are more worried about this than female students – four-in-10 men are either ‘very worried’ (4%) or ‘quite worried’ (37%) compared to only one-quarter of women (7% ‘very worried’ and 17% ‘quite worried’).

• Students at Russell Group universities are less worried than others: 46% of students at Russell Group universities are ‘not worried at all’ about their institution going bust, compared to 20% of students at post-1992 universities.

• When presented with a list of 10 options for what could happen if their own higher education institution were to fall over financially, the most popular response among students is a takeover ‘by public authorities, such as the Government’. This has the support of half of all students (49%).
• The next most popular options, chosen by around one-third of students each, are:
  • the cancellation of student loans (33%);
  • university closure, with support for students to transfer to another institution (31%); and
  • an enforced merger with another institution (30%). 
• Lower levels of support were expressed for internal changes aimed at saving money, such as:
  • cancelling long-term goals, such as any net-zero targets (22%);
  • shutting courses, selling buildings and staff redundancies (17%); and
  • closing counselling services, sports facilities and careers offices (14%).
• The least popular responses among students in the event of their university going bust are:
  • increasing fees to stabilise the financial position (8%); and
  • a takeover by a foreign company (8%) – which is significantly less popular than a takeover by a UK company (23%). 

• When asked to rank their top three options from the list of 10 for what should happen were their own university to go bust, the order was similar:
  • the top choice of 25% of students was ‘The university should be taken over by public authorities, such as the Government, to ensure that it survives’;
  • the top choice of 16% of students was ‘Students at the university should have their student loans cancelled to recognise their education has not worked out as planned’; and
  • the top choice of 15% of students was ‘The university should be forced to merge with another higher education institution, even if this costs the Government / taxpayers money’.

• The final question focused on levels of confidence in the likely response, with:
  • around four-in-10 students saying they are either ‘very confident’ (8%) or ‘quite confident’ (30%) that ‘public authorities, such as the Government, will behave quickly and sensibly if and when a university goes bust’; and 
  • another four-in-10 are not confident, with 30% saying they are ‘quite unconfident’ and 9% ‘very unconfident’. 
• Men are significantly more confident that public authorities will behave quickly and sensibly in the event of a university failure than women: 12% of men are ‘very confident’ of this, compared to just 4% of women, and a further 42% of men are ‘quite confident’ of this, compared to 20% of women. In other words, more than half of men have confidence in the authorities’ likely response, compared to one one-quarter of women.

Nick Hillman, Director of the Higher Education Policy Institute, said:

‘The number one issue facing higher education institutions at the moment is financial sustainability. Yet no one knows what students think should happen if their own university were to topple over because no one has thought to ask them. We have now done this – and students’ clear answers suggest we should listen to what they say.

‘Half of all students think the government should step in, if and when an institution fails. But other options that could prove similarly costly to government have considerable support too – including the cancellation of student loans and forcing a failed institution to merge with another.

‘It was disappointing that there was no new support for either students or institutions in last week’s Budget. But as regulators and policymakers continue to consider the future of our university sector, they should ensure the views of students are taken into account alongside those of staff and others directly affected.’

Notes for Editors

1. HEPI polled 1,003 full time undergraduate students (44% male and 56% female) through Savanta student panel between 18 and 25 October 2024. Respondents received an average incentive of 65p. Quotas were set on gender, course year and university type to ensure a representative sample and weighting was applied.
2. According to the Office for Students, ‘In 2022-23, 43 providers (16 per cent of the sector) reported surpluses that exceeded 10 per cent of income, whereas 93 providers (35 per cent of the sector) reported deficits. Providers have forecast this to increase to 108 providers (40 per cent of the sector) in 2023-24, with 43 of these expecting to report a deficit for three consecutive years’.
3. HEPI was founded in 2002 to influence the higher education debate with evidence. We are UK-wide, independent and non-partisan. We are funded by organisations and higher education institutions that wish to support vibrant policy discussions, as well as through our own events.