EU fees change could cost English universities £7 million a year

But THE analysis also suggests windfall for institutions if fall in student recruitment is modest 

May 9, 2019
Source: istock

Some English universities could lose up to £7 million each year if undergraduates from the European Union are charged the same fees as those from outside the bloc after Brexit, a Times Higher Education analysis suggests.

If the feared drop in EU student enrolment materialises, the loss of fee income would be high enough to push four institutions into deficit and worsen shortfalls at many others, according to the figures.

However, the data also suggest that, if institutions kept the fall in student numbers well below 40 per cent, then they would actually increase fee income because of the extra amount that they would be able to charge such undergraduates.

The analysis comes after it emerged that the government may scrap the home fee status of EU citizens studying at universities in England from 2021-22. This would likely mean such students being charged the same as those from outside the EU and losing access to public loans.

THE looked at the effect such a change might have on undergraduate fee income for English universities, assuming that each “lost” student cost £9,250 (the current maximum annual fee) and that universities charged those remaining an extra £6,000 a year (based on the latest figures for average overseas fees compiled by the Complete University Guide).

Using data on 2017-18 student numbers from the Higher Education Statistics Agency, the analysis suggests that if English institutions lost 57 per cent of their full-time EU undergraduates, the total annual drop in income for the sector could be about £185 million. A 57 per cent drop is the average sector change in EU enrolments predicted in a study on the impact of such a policy carried out by London Economics for the Higher Education Policy Institute in 2017.

The THE analysis shows the drop in income would be £2 million or more at 35 institutions, more than a quarter of the English sector, with this rising to more than £7 million for institutions with large cohorts of EU students. The figures are also likely to be an underestimate as sub-degree undergraduates, part-time students and postgraduates were not included.

Such a fall in income would inevitably hit universities with the heaviest reliance on EU students the hardest. For 32 universities, it would amount to at least 1 per cent of their total income from all sources.

More than a quarter of English universities failed to record a surplus in 2017-18 of more than 1 per cent of total income and the analysis suggests four institutions would be pushed into deficit by the EU fee change.

However, the results become very different when a lower drop in EU undergraduate numbers is applied across the board: any fall lower than 39 per cent would lead to universities increasing their income overall and if the drop was limited to 30 per cent then 50 institutions would get at least £1 million a year more.

The London Economics analysis split different types of universities into clusters and suggested the fall could be nearer 40 per cent at some institutions. It also showed how a fall in the value of the pound would make the UK even more attractive as a place to study and lead to universities making even bigger net gains.

Nick Hillman, director of Hepi, said some of the opposition to the potential EU fee rise reflected “a basic misunderstanding” of the actual dynamics of such a change.

“If universities were certain they could do well financially from EU students after Brexit, they would presumably spend more money on searching for potential students the way they do in countries outside Europe,” he said.

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Reader's comments (5)

Perhaps universities should band together and take matters into their own hands, rather than sit around waiting for what the government might do. Perhaps set up their own student loan fund for those students unable to access public funds? It's unlikely a single university could do that, but by working together the sector as a whole could manage it. It is obvious that the UK government is not interested in education at any level, so we need to make our own arrangements in the face of their indifference to our needs.
The one thing that most commentators seem to miss is that EU students are currently eligible to take out loans (repayment of which is a different matter...). Under any new regime those students would not have access to loans and thus the ability to raise £45,000 plus living costs without a loan will prevent a lot of EU students from coming to the UK (even if they had an interest in it)
This is right. We're not looking at the difference of a student finding £15520 instead of £9250, but rather finding £15520 instead of £0. Plus, we're expecting EU students to need to be sponsored through tier 4. So a student who can currently come with enough to cover a proportion of the living costs and work to make up the difference, will now have to prove they have both that £15k fee and £11k for living costs in the bank (for 28 days)
Raising 3 year worth of international fees plus visa fees plus living costs upfront and with no access to loans is a hard task, preventing many international students from accessing UK HE. But is it not remarkable how little was it spoken about it when only it concerned only non-EU students? Why do we care less about a student from China, Thailand or Russia than a fellow student from Italy, France or Poland? Can the reasons be traced back to UK colonial history, or to more recent `hostile environment' policies?
One factor often omitted is that the change in fees would be reciprocal. In many EU countries, HE fees are much lower than UK fees and UK students until now can benefit from this. In recent years several mainland-Europe universities have also provided courses in English, attracting more students as a result. Living costs can also be substantially lower, depending on where the student studies, of course. With the increase in EU student fees, the UK pretty much becomes one of the most expensive European country to study in, especially undergraduate degrees. In essence, international students will still come to the UK, but EU students are more likely to 'shop around' and look for better options, also considering that they will still have access to 27 countries without any need for a sponsor or a Visa. There are many top world ranking institutions on the continent and several are also substantially cheaper that even a low ranking UK university. It really is not rocket science...

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