Deficit-hit UK universities opening in India ‘deluded’

British universities hoping to solve their financial problems by opening campuses in India are “deluded”, a vice-chancellor has said. 

Adam Habib, vice-chancellor of SOAS University of London, said he worried about the commercial wisdom of opening overseas campuses, despite the government actively encouraging institutions to expand abroad.

“I was quite struck by the fact that of the 10 universities that have now moved in India, five of them are running at a deficit in the UK,” Habib told an event at Keele University. 

British universities already operating or planning to open campuses in India include Lancaster, Surrey, Southampton, York, Aberdeen, Bristol, Liverpool, Queen’s University Belfast and Coventry.

“If they think they’re going to make their money in India in the short term to cross-subsidise, I think they’re very, very deluded about the Indian marketplace,” Habib said. 

He criticised the government’s new international education strategy, arguing it encourages growing education as an export but says “don’t bring [students] here, try and keep them overseas”. 

“We’ve got to start asking whether that’s morally viable and commercially viable,” he continued. 

Former universities minister Jo Johnson said he believed transnational education was a “positive development” but agreed there is “over-optimism” among some institutions about “how easy they’re going to find it to compete in different markets around the world”.

“We’re on a very fast learning curve in that respect and we’ll see how well those who are rushing to set up in countries like India will fare in due course.” 

But Johnson hit back at claims that international students in the UK are being exploited by universities. 

Habib criticised the British higher education system for “overcharging international students”, including those from poorer countries, to “cross-subsidise middle-class students in the UK”.

He said the model is also becoming commercially problematic, with rising costs increasingly pricing international students out and political debates about migration hampering the ability of UK universities to recruit from overseas. 

Johnson, however, argued that international students have “access to plentiful information” and their “decisions are carefully weighed up, often years in advance”, 

“They have choice,” he said, adding that if students were being overcharged, “word of mouth would have ensured that international students didn’t want to apply in large numbers to the UK. That’s evidently not the case.” 

Vivienne Stern, chief executive of Universities UK, said that while the internationalisation of British higher education may not be purely “altruistic”, it can be a “win-win” situation, with students benefiting from the opportunity to study at diverse and high-quality institutions.

However, Stern added that universities have been driven “too far towards reliance on international fee income to subsidise domestic education and research”.

“Underfunding” domestic education is “an error at the grand national strategy level”, she continued. 

“We should not be overly exposed to the inevitable vulnerabilities that come from both contested domestic politics and geostrategic vulnerabilities – that’s unwise, and we need to find a way in the next decade or two to unwind that overdependence, as do many other systems.”

helen.packer@timeshighereducation.com