Universities at risk of going bust before freshers graduate

Students have been warned that “their university, department, or course might not exist in three years” amid growing sector-wide financial pressures on UK universities. 

The i Paper reports that “at least six” UK universities are at risk of collapse before freshers joining in the academic year 2025/26 will have time to finish their degrees. 

In December last year, the Office for Students (OfS) began to assess universities’ financial situations and assigned accountants to the “most at-risk institutions”. At the time, some universities were judged to be mere “weeks away from potential collapse”. 

75% of higher education institutions may be in financial deficit by 2025/26

The financial crisis confronting UK universities has not improved since. Tuition fees have not kept up with inflation and tighter visa regulations have limited income from international students. Job cuts have become commonplace throughout UK higher education institutions in an attempt to balance the books.  

Analysis by the OfS suggests that 75% of higher education institutions may be in financial deficit by 2025/26. 

Nick Hillman, Director of the Higher Education Policy Institute think-tank, has voiced concerns that a few universities ‘going under’ may have negative knock-on effects for other institutions.  

Hillman, along with Iain Mansfield, Head of Education at the Policy Exchange think-tank, is however doubtful that Russell Group institutions such as Warwick are vulnerable to financial collapse.   

Despite this, Jonathan Simons, Head of Education at political strategy firm Public First and former No. 10 Strategy Unit Head of Education, warns that Russell Group students should not be complacent.  

In the case of institutional closure, [the OfS is] hoping to work with UCAS to develop ‘a bespoke clearing system’, which will act as a ‘lifeboat’ for students

He says: “[Russell Group institutions] have very, very expensive research bases, which post-1992 universities don’t tend to have. They are, in general, equally at risk.” 

To combat the risk of disrupted education for students who may not complete their degree before their place of study shuts down, the OfS have put strategies in place.  

In their Business Plan 25-26, the OfS pledge to “oversee cases where there is a significant risk of institutional closure, using a risk-based approach”. In the case of institutional closure, they are hoping to work with UCAS to develop “a bespoke clearing system”, which will act as a “lifeboat” for students. 

Although no details have been released about the system, it is thought to be similar to the clearing system “used by school-leavers to find university places.”