The financial landscape of UK universities has been massively impacted by a dramatic decline in deposits from international students, particularly those from Nigeria and India.
According to a report by the Financial Times of London, payments made by Nigerian students for the new academic session beginning in September have decreased by 65% compared to the previous year. Similarly, deposits from Indian students have plummeted by 44% since August 2023.
This downturn is attributed to the economic hardships faced by these countries, which are among the top three contributors to the league of international students in the UK.
The data from Enroly, an online platform used by one in every three international students for enrolment management, indicates a 35% overall decline in deposits for places on UK university courses this month compared to August 2023.
Paul Kett, senior education and skills adviser at PwC UK, remarked, "This is still going to be a challenging and critical recruitment round for many. The impact on individual institutions will be highly diverse, based on their relative attractiveness and primary target markets."
He further noted that some universities might need to take "additional considerable action to ensure their financial sustainability."
Despite a minor improvement this month, the number of overseas students applying to UK universities remains significantly lower than in previous years, leaving several institutions in financial distress.
Bridget Phillipson, Education Secretary, stated last month that the new Labour government wishes to welcome international students and condemned the previous Conservative administration’s hostile tone towards migration.
The Office for Students (OfS), the regulator, has already begun preparing for a potential wave of university insolvencies by advertising a contract worth up to £4 million for professional services firms to conduct restructuring initiatives.
This decision follows financial reports revealing overly optimistic projections regarding the expansion of international recruitment in the coming years.
Harry Anderson, Deputy Director of Institutions UK International, highlighted the competitive issues posed by the Labour government's continuation of the Conservatives’ ban on most graduate students bringing family members.
He emphasized, "Most of our competitor destinations allow students to bring family members, and the most of the growth in recent years has been in postgraduate taught courses, where students are often older and have families."
The current economic situation in the UK, marked by a 0.7% GDP growth in Q1 2024, contrasts sharply with the financial struggles of its higher education sector. The reliance on international students, who pay significantly higher tuition fees compared to domestic students, has left many universities vulnerable.
The 65% drop in deposits from Nigerian students, combined with a 44% decline from Indian students, represents a substantial financial hit. Many universities, especially those less prestigious and more reliant on international tuition, could face budget cuts, layoffs, and even potential closures if the trend continues.
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