Educational institutions in England reveal an alarming reliance on international students, perceived to be a compensatory measure for static tuition fees and rising costs, warns a report from a Lords committee. This dependence is not being sufficiently addressed by the government or the Office for Students (OfS), the official regulator of the situation, causing what the Industry and Regulators Committee terms as a “looming crisis.”
The report also expresses concerns about the perceived lack of independence and consequent lack of trust in the OfS among educational providers. The OfS, which became England’s official regulator for higher education in 2018, maintains oversight on 425 institutions, including universities and colleges. Its mission is to ensure balance, holding institutions accountable, and warranting value for money to the students.
The critique pivots around the insufficient attention paid by the OfS to the impending financial threat to a sector that is increasingly dependent on international and postgraduate students. This is due to a tuition fees cap for home students and the loss of European Union research funding.
In 2018, the government declared tuition fees for undergraduates to be fixed at £9,250 to promote better value for students. Subsequent to this policy, institutions have reportedly incurred a loss teaching domestic students and conducting research.
Former University of Hull vice-chancellor, Prof Susan Lea, shared with the committee that providers are diverting to the international market to compensate for the deficit in funding for domestic students. The number of international students in the UK has seen an upward trajectory, rising from 469,160 in 2017-18 to 679,970 in 2021-22, Higher Education Student Statistics reveal. A significant 22.3% of these students are Chinese, reports the OfS.
The report forewarns that geopolitical shifts could impact this increasing influx of student numbers. In response, the OfS has contacted 23 providers with high enrolment from China to ensure they have adequate action plans in case of a sudden decline in overseas students.
The committee urges the government to establish a stable, long-term funding model considering its control over principal income sources through the tuition fee cap and the influence of its immigration policy on international student recruitment. It also calls on the OfS to conduct thorough financial discussions with providers more regularly.
The severity of the situation is highlighted by Lord Hollick, chair of the committee, expressing that the OfS has failed to earn the trust or respect of providers or students. Apart from this, the perception of the OfS as an instrument of the government’s policy, rather than an independent regulator, is not aiding its cause.
The report also scrutinizes the damages resultant from this perception, strengthened by OfS chair Lord Wharton’s continued association with his party’s whip in the House of Lords. The committee suggests that serving politicians must terminate any party-political whip before chairing independent regulators.
However, Lord Wharton reassures that the OfS is aware of the considerable risks the sector faces, including the excessive reliance on international students. He promises that the OfS will persistently identify the risks and endeavor to protect student interests in the face of financial challenges with an institution.
The Department for Education reinforces these reassurances, asserting that the higher education sector remains financially sound overall, with international students accounting for just 15% of all undergraduate entrants at UK providers in 2021/22. The department stands by the OfS’s commitment to enhancing the quality of higher education by holding universities accountable and advocating for students’ interests. It pledges to fully consider all report recommendations and respond in due course.
