New HEPI Debate Paper ‘A degree of regulation: Building a more financially sustainable and resilient higher education sector’

A new HEPI Debate Paper warns that rising financial pressures are pushing some universities into increasingly risky behaviour, with consequences not just for individual institutions, but for the stability and reputation of the sector as a whole.

In A degree of regulation: Building a more financially sustainable and resilient higher education sector (HEPI Debate Paper 45), former adviser to ministers in the Department for Education, Tom Richmond argues that rapid expansion, heavy reliance on international students, growing franchising arrangements and high levels of borrowing are creating systemic vulnerabilities that can no longer be ignored.

The report sets out how these risks are already affecting students, from overstretched teaching capacity and accommodation shortages, to concerns about grade inflation and the long-term value of degrees. It argues that, while many institutions act responsibly, a minority pursuing aggressive growth and revenue strategies are exposing the entire sector to reputational and financial harm. The findings raise questions about whether current regulatory frameworks are sufficient to safeguard both students and the public interest.

To address these challenges, the paper proposes a detailed ‘toolkit’ of eight separate measures that could be taken to prevent excessive risk-taking without affecting the autonomy of providers that have acted appropriately. These recommendations are deliberately bold, reflecting the urgency of the situation. To read the press release and download the full report click here.