Reply to: State of the Market

[jamesbrown]

I'm more trying to work out why they went from a situation of no tuition fees and a relatively low number of foreign students (so up to the late 1990s) to the current situation. The fees were supposed to be flexible, dominated by market forces. So a not so good university would cost less than a better one. What actually happened was all universities maxed out the fees. I suppose demand proved such.

Tuition fees were introduced in the late 1990s (1998, IIRC), but universities were still centrally funded by gov't through 2012, when the fee income was allowed to increase and central gov't funding stopped. The reason universities maxed out the fees was because they lost central gov't funding and the fees alone were not enough to make up the shortfall, especially as those fees were eroded by inflation. In other words, fees were a mechanism to reduce tax-payer funding of universities, but the fee income is still capped by gov't, rather than an arms-length body, and the gov't has a vested political interest in not increasing student fees too much. In short, it's just another gov't tulipfest

( And I wouldn't worry about this thread going off-topic - it happens about every 10 posts. There isn't really a "market" and it doesn't have a "state" )

[edison]

They are loss-making as they are incredibly badly run with huge pension liabilities, they need to be allowed to go bankrupt so they can merge and force real change through the whole sector. Interestingly some of the more professionally run places are creating mini-teaching centres in other cities which will drive out the weaker universities e.g. https://www.ucb.ac.uk/

The chase for the foreign more profitable student is a matter of survival for many of them but they should also be more efficient in what they do.

Think this has been happening for a while now with some courses like MBAs.

I can see a few going belly up in the next couple of years.

[The_Equalizer]

Confirmation that paperwork is on its way for another 6 month extension. Very relieved given the grim reading on here, when the posts are actually about 'state of the market', and the time of year.

Excellent and good point. Sorry for drifting off.

[The_Equalizer]

Almost like leaving things to market forces does not improve quality/standards, but just increases prices - and who'd have thought that after how well it works with utilities and transport.

For broadband, mobile contracts, clothes and food it does seem to work.

[The_Equalizer]

I don't think students pay £10k a year to use the NHS. A student visa holder pays about £600 p.a. currently.

It depends on where you go in the UK; some regions charge less in fees (NI caught my eye at £36K plus £10K 'mandatory clinical placement levy') others just the straight £46K (Imperial for example). The bottom line appears to be £40K/year plus now for medical students from overseas which ever way you cut it. Wonder if most home medical students realise this?

[WTFH]

...The fees were supposed to be flexible, dominated by market forces. So a not so good university would cost less than a better one. What actually happened was all universities maxed out the fees. I suppose demand proved such.

Almost like leaving things to market forces does not improve quality/standards, but just increases prices - and who'd have thought that after how well it works with utilities and transport.

[The_Equalizer]

They are loss-making as they are incredibly badly run with huge pension liabilities, they need to be allowed to go bankrupt so they can merge and force real change through the whole sector. Interestingly some of the more professionally run places are creating mini-teaching centres in other cities which will drive out the weaker universities e.g. https://www.ucb.ac.uk/

The chase for the foreign more profitable student is a matter of survival for many of them but they should also be more efficient in what they do.

I thought the USS, the pension scheme which covers pre-92 universities, is now in surplus. Some mad turn round, although the previous valuation was March 2000 when the markets were completely on their arse with Covid.

Drifted slightly off topic so I will add that the market still looks bad. I haven't been felt up by a pimp in a while.

[The_Equalizer]

I'm not advocating for anything, I am simply pointing out that you seem to have a weak grasp of the funding situation of UK universities. If you freeze home tuition fees for many years while costs increase at inflation, then you arrive at the situation where educating home students is a net loss of around £4k per student. Meanwhile, as overseas fees are allowed to increase, it is **blindingly obvious** what universities will do to make up the funding shortfall. Oh look, they did.

I'm more trying to work out why they went from a situation of no tuition fees and a relatively low number of foreign students (so up to the late 1990s) to the current situation. The fees were supposed to be flexible, dominated by market forces. So a not so good university would cost less than a better one. What actually happened was all universities maxed out the fees. I suppose demand proved such.

[BlueSharp]

UK students are loss-making for many universities/courses as home fees have not increased since 2017. You can only cross-subsidise expensive with cheaper degrees to a certain extent. In other words, recruiting from overseas is a matter of survival.

They are loss-making as they are incredibly badly run with huge pension liabilities, they need to be allowed to go bankrupt so they can merge and force real change through the whole sector. Interestingly some of the more professionally run places are creating mini-teaching centres in other cities which will drive out the weaker universities e.g. https://www.ucb.ac.uk/

The chase for the foreign more profitable student is a matter of survival for many of them but they should also be more efficient in what they do.

[oliverson]

Confirmation that paperwork is on its way for another 6 month extension. Very relieved given the grim reading on here, when the posts are actually about 'state of the market', and the time of year.

[edison]

Yes, foreign students are purely a cash cow for universities. At £46billon one if the figures are to be believed. For example, medicine is £30K plus £10K to use the NHS facilities. That's per year. What on earth has happened that universities need foreign student income to survive? My suspicion is the amount of cash a lot of them have been throwing serious money at new buildings including new student accommodation. Oh and university attendance for home students has gone from something like 1 in 50 roughly 100 years ago to 1 in 2. You'll see in a few (permie) job specs that the degree must be from a Russell Group.

I don't think students pay £10k a year to use the NHS. A student visa holder pays about £600 p.a. currently.

[jamesbrown]

Russell Group unis focus on research and post grad work far more than under graduate teaching

They actually focus on all of these things because they can't afford not to. This is reflected in the various HE rankings across all factors. The reality is that, on the whole, academics at the cutting edge of research also deliver better teaching and students appreciate research-led teaching. On the whole.

[jamesbrown]

Okay, so the huge expansion of university places meant the old system (1 in 10 in the dying days of zero course fees) would never work and universities now all have to self fund. Dare I say 1 in 2 is nuts and devalues a degree, or at least means there are large numbers with degrees that won't be of financial benefit. It seemed it was heading that way for quite a while. Basically M.Sc is now the old B.Sc. (or equivalent).

I'm not advocating for anything, I am simply pointing out that you seem to have a weak grasp of the funding situation of UK universities. If you freeze home tuition fees for many years while costs increase at inflation, then you arrive at the situation where educating home students is a net loss of around £4k per student. Meanwhile, as overseas fees are allowed to increase, it is **blindingly obvious** what universities will do to make up the funding shortfall. Oh look, they did.

[The_Equalizer]

UK students are loss-making for many universities/courses as home fees have not increased since 2017. You can only cross-subsidise expensive with cheaper degrees to a certain extent. In other words, recruiting from overseas is a matter of survival.

Okay, so the huge expansion of university places meant the old system (1 in 10 in the dying days of zero course fees) would never work and universities now all have to self fund. Dare I say 1 in 2 is nuts and devalues a degree, or at least means there are large numbers with degrees that won't be of financial benefit. It seemed it was heading that way for quite a while. Basically M.Sc is now the old B.Sc. (or equivalent).

[dsc]

[...] My suspicion is the amount of cash a lot of them have been throwing serious money at new buildings including new student accommodation. [...]

They need to stay attractive otherwise people study elsewhere. UK infrastructure is already tulipe as is, if unis were to follow that trend, you'd see no foreign students as no one would want to both live and study in a tuliphole paying a fair bit of money.