UK Universities are More Dependent on International Enrolment

The degree to which UK higher education institutions rely on the tuition of international students to maintain their financial stability is concerning, according to a recent analysis by the global consulting firm PwC. Over fifty percent of learning institutions in England and Northern Ireland may experience deficits in 2025–2026 if international enrollment in UK higher education drops from its current level, according to the firm's modelling. The report comes at a time when student deposits and acceptances to UK universities via the Enroly platform have decreased by over a third from the previous year.

Prior to delving into the PwC analysis, it is crucial to take note of recent data from Enroly that indicates that deposits are down 37% and Confirmation of Acceptance for Studies (CAS) distribution is down 36% for the January 2024 intake for international students arriving in the UK compared to January 2023. Nigeria is the market that is most concerning because it has contributed significantly to the expansion in recent years. Indian student deposits have decreased by 37.5% year over year, while Nigerian student deposits have decreased by 72%. India and Nigeria, which grew significantly faster than the top market.

Due to limitations on their revenue-generating capacity, rising investment needs, and an expanding cost base, universities are under a lot of strain. Concerns about overreliance have grown as a result of these straining margins and increasing reliance on cross-subsidization, especially from foreign student fee income. Declining income from domestic student enrollments is contributing to that over-reliance. National cost of tuition has been set at £9,250 annually since 2017, and the number of domestic students enrolled in higher education decreased in2022–2023.

According to PwC's analysis, institutions across all provider segments believed that future growth in international fees would help them strengthen their economical position; in 2021–2022, 25% of them experienced a deficit. International tuition (accounting) for among 33–66% of all course fee revenue by 2026-2027(in contrast to a range of 24–64% in 2021-2022) is the foundation of their optimism. However, those presumptions could easily be thrown off by downward pressures on demand from international students; even a 5% decline in international enrollment could result in twice as many providers in deficit. PwC cautions that the institutional sample's operating deficit percentage may rise by:

●    There is a chance that 27% of institutions may be in deficit by 2025-2026 if permanent international student enrollments stagnate by eight percent from 2024-2025onwards

●    51%of institutions may be in deficit by 2025-2026 if they decrease by 5% from 2024-2025onwards

●    80%of institutions may be in deficit by 2025-2026 if they fall by 20% from 2024-2025onwards

Providers are increasingly cross-subsidizing local student educational and research endeavors with a greater number of non-fee-capped students from abroad due to cost pressures and income generation constraints. Taking advantage of the recent surge in international student enrollment, this approach has occasionally resulted in over-reliance and exposed certain providers to uncontrollable global demand or geopolitical shocks.