New HEPI and Ellucian Policy Note ‘Risk and Resilience: What UK higher education can learn from the United States’

Financial pressure does not become a crisis because of one bad year or one isolated problem. A new Policy Note from HEPI, partnered with Ellucian, draws on lessons from the United States to show how interconnected problems can push universities into decline, and what UK institutions can learn about spotting and reversing those trends.

In Risk and Resilience: What UK higher education can learn from the United States (Policy Note 76), Dan Greenstein (former Chancellor of the Pennsylvania State System of Higher Education) identifies seven lessons for UK higher education from the experience of American institutions. Central to the analysis is an unusual feature of the English system: universities depend heavily on student fees, leaving them exposed when demand falls, but have limited control over the price they can charge. Greenstein argues that this leaves institutions carrying ‘private-sector exposure at public-sector speed’, while headline sector averages can obscure the financial trajectories of individual universities.

The Policy Note argues that institutions rarely run into serious difficulty because of a single problem. Falling recruitment, weaker retention, declining revenue, reduced cash generation and an inability to invest can instead reinforce one another. Drawing on examples of recovery in the US, Greenstein argues that cost-cutting alone cannot reverse this trajectory: institutions that successfully recovered acted on revenue as well as costs. The paper also explores the importance of student retention, international recruitment and shared services, while highlighting the particularly limited financial levers available to universities in Scotland and Northern Ireland.

With universities across the UK confronting difficult decisions about their financial futures, the paper offers lessons from institutions that have already faced similar pressures, and considers what successful recovery looks like in practice. Click here to read the press release and find a download link to the full report.