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England: non-EU tuition revenue likely to fall 10%

England’s higher education providers anticipate non-EU tuition fee income will fall to £5.4 billion in total for the 2020-21 academic year – a 10.4% decline from 2019-20, according to the Office for Students.

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"Financial forecasting is inherently more difficult in times of uncertainty"

However, English higher education is “in reasonable financial shape”, and the impacts of coronavirus on university finances are “not as severe as first feared”, the OfS outlined in a report.

England’s total non-EU student tuition hit £6.0 billion in 2019-20 – an increase of 16.4% compared with 2018-19 (£5.2 billion) – the OfS added.

“England continues to be a popular destination for international students”

Although total fee income (including from domestic students) will likely fall 1.7% in 2020-21, it would still be above 2018-19 levels when totals reached £17.2 billion.

Along with the fall in income from international students’ fees being less than feared, strong cash balances and “increased but sustainable borrowing including through government-backed loans” leaves the sector in a reasonably stable financial position, the report contended.

“At this stage, the effects of coronavirus on university finances are not as severe as was first feared, though there is significant variation between different universities,” chief executive of the Office for Students Nicola Dandridge said.

While students and higher education providers have faced significant disruption over the past nine months, “England continues to be a popular destination for international students”, she explained.

“There are a number of uncertainties which will continue to affect finances both now and into the future, not least the fact that it is still not clear what the overall impact of the pandemic will be,” Dandridge added.

The sector’s aggregate performance does not reflect the picture for individual providers, the OfS noted.

“Where universities have immediate concerns about their finances, they must let us know straight away,” Dandridge said.

“The OfS will work constructively with any university in financial difficulties, with our overarching priority being to protect the interests of students. At this point in time, though, we believe that the likelihood of significant numbers of universities or other higher education providers failing is low.”

The OfS said that the UK leaving the European Union adds further uncertain implications, as 2020-21 is the final year that EU students can enter English higher education providers on the same fee and financial support terms as UK students.

“Financial forecasting is inherently more difficult in times of uncertainty and, despite positive news recently on vaccinations for coronavirus, there remains uncertainty about the operating environment for higher education providers in 2021,” the report explained.

The research compiled using data returned to the OfS this October is the “first opportunity to analyse the impact of the pandemic on English higher education”, the OfS said.

 

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