The postgrad cashpot

December 16, 2005

The best source of future income for universities lies in the recruitment of postgraduate students, according to a survey of senior university managers.

In what could signal a shift in the teaching priorities of staff across the sector, 57 per cent of managers identified postgraduate courses as providing "the greatest revenue potential in the future".

The survey, by the Euro RSCG Riley strategic consulting group, focused on postgraduates even though undergraduates will pay top-up fees of up to Pounds 3,000 from next year.

Only 20 per cent of managers said "established degree programmes" presented the greatest future source of income; 46 per cent said the biggest potential lay in developing new degree programmes.

Rosemary Stamp, director of Euro RSCG, said the focus on postgraduates represented confidence among managers that the top-up fee era would open the sector to wider market forces and would allow institutions to maximise their postgraduate fees on popular programmes as students accepted greater cost differentials between courses at all levels.

But she added that it was a high-risk strategy. "The market for postgraduate students is becoming more competitive and more eclectic as markets open up in other countries, such as the US, and with student mobility increasing in Europe," she said.

She said that in five to ten years, universities would not be able to rely on the "supply chain" of postgraduates from their own pool of undergraduates. "Top-up fees, with the national student survey (of satisfaction levels), could see students voting with their feet."

The survey of 97 managers across a range of UK higher education institutions was carried out from September to mid-October this year - as Oxford University released a strategic plan to focus on postgraduate recruitment at the expense of undergraduates.

It found that 28 per cent of managers said that the most important issue they faced was the "impact of tuition fees", followed by 25 per cent who thought the key issue was the "competitive nature of the higher education marketplace" and by 17 per cent who put branding as their top priority.

Staff recruitment was the least important issue, singled out by just 1 per cent of senior managers.

The report says that a focus on fees-related concerns could reflect short-termism.

"Many organisations in the UK are simply not well prepared for the longer term impact of the tuition fees-driven market. The overwhelming preoccupation with the here-and-now issue of bursaries and scholarships, for example, has, for some UK organisations, simply eclipsed any real attention to the future effects (over five to ten years) of the tuition fees imperative," it says.

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