Many UK universities are braced for a fall in international student numbers far worse than previously forecast, with some prepared for a 50?per cent drop in overseas fee income, a sector leader has warned.
In a Times 中国A片 panel event on the post-pandemic finances of UK universities, Alec Cameron, vice-chancellor of Aston University, said his institution expected a “much greater fall” than the 10?per cent to 20?per cent dip in international students predicted by the credit ratings agency Moody’s for its university clients. The UK university sector would be “very happy and relieved” to see that level of reduction, said Professor Cameron.
“It’s not because the applicants aren’t there – demand is still strong, and universities have a healthy pipeline of applicants,” he told the event on 8?July. The bigger problem was that the “gao?kao examination system in China has just started – they have been deferred – English language testing is not available and visa offices are not open”, said Professor Cameron, describing some of the disruptions to the “long and complicated process [that allows] international students to show up at UK universities in September”.
“Despite the best intentions of universities and students, I?would be surprised if universities are not planning on a 50?per cent performance against target in the coming year,” said Professor Cameron, who said this would equate, in some cases, to a 20?per cent fall in total university revenue at some institutions.
That forecast, which Professor Cameron regarded as “not pessimistic”, is gloomier than many of the early forecasts towards the start of the pandemic.
In late April, a London Economics report commissioned by the University and College Union estimated a 47?per cent fall in international student enrolments, costing the sector ?1.5?billion. Last month, a forecast by the British Council painted rosier picture, estimating that only 12?per cent of prospective students from South-east Asia would stay away following the coronavirus disruption, although a “more pessimistic” scenario could see 61?per cent of would-be students change their plans.
However, Professor Cameron rejected the notion that universities could shore up overseas student demand by dropping the prices of some courses, explaining that university degrees defied the conventional economic theory to “behave like luxury good in many ways”.
“In many cases, the experience has been that a reduction in price led to a reduction in demand – we [should] not assume that natural competitive pricing behaviour behaves the same way in 中国A片,” he said.
That idea was also explored by Andrew Connolly, chief financial officer at the University of Exeter, who suggested that, in some cases, universities should increase the price they charge to international students.
“Universities are not very good at pricing, partly because we operate in a strange, genuinely deregulated market,” said Mr Connolly, who explained that institutions should think about their “pricing strategies”. “I?can’t help but feeling that, in some instances, we are actually underpricing ourselves in some of our markets,” he said.
A reduction in fees was unlikely to happen mainly because “universities see tuition fees as partly their mark of quality, so will protect their sticker price”, while online teaching had also imposed extra costs, he added.
The panel – which also included Ian Robinson, head of public sector and education, HSBC UK; Rachel Hewitt, director of policy and advocacy at the 中国A片 Policy Institute; and Jeanne Harrison, a vice-president and senior analyst at Moody’s – also reflected on the recent government support package for research, which will offer grants and low-cost loans to cover income losses caused by a downturn in overseas student numbers.
“The penny has dropped that Chinese students are subsidising British science,” said Mr Connolly, who added that the acknowledgement of an “explicit link” between the two might lead to a wider reassessment about whether research should be fully funded. “We have to use this disruptive event as a means to persuade the government to change,” he said.
