Will universities go bust if fees are cut? Watch

Poll: What should happen to tuition fees?
Cut them (26)
49.06%
Abolish them (15)
28.3%
Leave them alone (12)
22.64%
candokoala
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From the BBC article about a possible reduction in English tuition fees: "The first figure floated, £6,500, seems to have drifted up to £7,500 after complaints from universities - but that would still be significantly less than the current maximum of £9,250.

"With some universities already facing precarious finances - with borrowing, recruitment problems and emergency bailouts - there are claims that institutions will be at risk of collapsing.

"Shadow education secretary Angela Rayner says the government needs to 'get real about the consequences of a university going bust'."

On the other hand: "A switch from fees to direct funding, without an overall loss of budget, could give universities a more stable income, less vulnerable to unpredictable levels of recruitment.

"But if fees are lowered, perhaps for autumn 2020 or later, there are are fears about a sudden drop in university cash flow, as students would be likely to postpone starting."

Read the BBC story here.

What do you think - in light of everything, could uni fees being lowered mean unis would go bust? What else could it mean?
Last edited by candokoala; 3 weeks ago
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Hannah Farbon
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Tuitions fees should definitely be cut to at least £6.5k a year. I’m on a 3 year LLB course and will come out of uni with a debt in excess of £27k (maintenance loan not included) and more fees after that for further study. I can appreciate that Universities require this money to fund the courses, pay the staff and build brand new buildings but my subject’s building is a run down concrete block whilst the Vice Chancellor is chauffeured around in his Bentley. Not forgetting the fact that students across the UK last February suffered from no tuition for an 8 week period during the industrial strike action WHICH WILL NOT BE REFUNDED. Scandalous.
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reb2500
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It’s not the fees that are the problem but the astronomical 6.3% interest that is charged even before graduating. It should be 0% until after graduation and then much lower if raised after that.
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999tigger
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Isnt this either stating the obvious or all a bit confused?
1. If overall Uni income is cut , then the uni will have to deal with that drop in income or go out of business. It cant really raise fees, so it has cost cutting and borrowing as an option, but such a large cut may not be sustainable.
2.If a cut in fees is replaced equally by other funding then it remains the same.

Its likely both parties will have considered this and the obvious consequences..
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Blue_Cow
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The larger, well established universities with plenty of capital, investment and endowment certainly won't. No doubt they can absorb the shock and can restructure accordingly.

The smaller ones that are already ****ed (i.e. the ones on the verge of bankruptcy)... well....

Again, it depends what other funding is available as well as tuition fees.
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Retired_Messiah
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7.5k over 3 years is about as unpayable as 9k when you add 3 years of maintenance loan on top. All lowering the cost arbitrarily will do is cut uni's income. You'd have to make it hella cheap (3k-ish maybes) or make it totally free for students to really feel the difference.

TL;DR if you're not making it free don't bloody touch it 'cause you'll **** it up.
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Pinkisk
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(Original post by Hannah Farbon)
Tuitions fees should definitely be cut to at least £6.5k a year. I’m on a 3 year LLB course and will come out of uni with a debt in excess of £27k (maintenance loan not included) and more fees after that for further study. I can appreciate that Universities require this money to fund the courses, pay the staff and build brand new buildings but my subject’s building is a run down concrete block whilst the Vice Chancellor is chauffeured around in his Bentley. Not forgetting the fact that students across the UK last February suffered from no tuition for an 8 week period during the industrial strike action WHICH WILL NOT BE REFUNDED. Scandalous.
I agree Hannah.

The universities can easily compensate for the cut in tuition fees by cutting the salaries of the vice chancellors. I recently read an article that said that 30% of university spending in the UK goes on salaries and bonuses for the vice chancellors. This is beyond ridiculous. Universities need more regulation. the government needs to directly be involved in all decision making processes for all universities. Salaries should be directly decided by the government, not the university. The tax payer is subsidising these institutes. We should have more say over where our money goes. At the moment they have total freedom over spending and when you find out that 30% of their spending goes on the salaries of vice chancellors that tells you instantly that they are abusing this freedom to further their own interests as apposed to the interests of the public.

The Vice Chancellor for the Bath Spa University received £800, 000 in 2017, that's what? the tuition fees for around 100 students? The tuition fees for 100 students at the Bath Spa University are going to pay the vice chancellor...Her salary is like 5 times the salary of the prime minister of this country...That is just ridiculous.

https://www.bbc.com/news/uk-england-bristol-42260090
Last edited by Pinkisk; 3 weeks ago
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username4316350
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'Let them fail. They probably offer rubbish courses anyway, and the people attending will be better off with the institution going bust than staying there for the duration of their course.'

yeah true words
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999tigger
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Its quasi debt. More like a tax than a loan. Most of you are never going to pay it off.
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squeakysquirrel
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(Original post by candokoala)
From the BBC article about a possible reduction in English tuition fees: "The first figure floated, £6,500, seems to have drifted up to £7,500 after complaints from universities - but that would still be significantly less than the current maximum of £9,250.

"With some universities already facing precarious finances - with borrowing, recruitment problems and emergency bailouts - there are claims that institutions will be at risk of collapsing.

"Shadow education secretary Angela Rayner says the government needs to 'get real about the consequences of a university going bust'."

On the other hand: "A switch from fees to direct funding, without an overall loss of budget, could give universities a more stable income, less vulnerable to unpredictable levels of recruitment.

"But if fees are lowered, perhaps for autumn 2020 or later, there are are fears about a sudden drop in university cash flow, as students would be likely to postpone starting."

Read the BBC story here.

What do you think - in light of everything, could uni fees being lowered mean unis would go bust? What else could it mean?
Yes some universities will go bust and about time. The university system is bloated and over inflated. There are too many courses and this obsession that 50% must go to university is just a nonsense. The attrition rate for some courses is so high it is obscene. ( I spoke with a nursing student and he said that 70% of the starters had gone.... what!)

Some of the vice chancellors are also on silly money - over £400k - that is not right. We need a return to technical colleges and polytechnics where people learn a trade not some useless media degree.
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Retired_Messiah
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(Original post by 999tigger)
Its quasi debt. More like a tax than a loan. Most of you are never going to pay it off.
People on this site that and they never actually listen to that. Apparently tuition fees are terrible and we're all going to be a crippled debt ridden mess for the entirety of our adult lives because we took 3 years out to learn about English Lit.
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travelcollegeguy
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i hope it wont happen to my uni
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Kian Stevens
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It's a difficult topic to discuss, as there are different arguments for different points. Should tuition fees be reduced? It depends.
There are far too many people who use the 'but I'll be in £x amount of debt when I graduate' argument as to why they should be reduced.

I loathe this argument for three reasons:
  • Firstly, the UK's university system is far better than others such as the USA's, for the simple reason that graduates aren't in actual debt. It's not an amount which must be paid back by a certain date. It's repaid in the same way tax and NI is paid. There are salary thresholds which protect you from if it all doesn't go to plan. And, you'll probably never pay the full amount of your tuition off, as after 30 years, the taxpayer wipes the slate clean.
  • Secondly, the amount of undergraduate tuition fee which is repaid is *just* 9% of how much your salary is over the threshold, even less for a postgraduate. Monthly tuition fee repayments, let's say for a salary of £30k, will be in the ballpark of a monthly phone contract. People complain about how much they'll have to repay for their tuition, yet a phone contract is rarely a problem; I know which I'd consider the most important.
  • Thirdly, why do people complain about the fees when it was, or still is, their choice to be in that position? You go to university, study, and pay for your tuition at the end of it. A rational person would do this because they regard the benefits of having a degree outweigh the tuition fees that will be repaid. Deciding to go to university and complaining about paying for the tuition is as nonsensical as doing something like punching yourself in the face and complaining it hurts.

In my opinion, university should always be a privilege, not an entitlement; hence, in an ideal world university should have high tuition fees and definitely should not be free. Increasing tuition fees gives universities that extra money, but may put off genuine students who are looking for a career. Decreasing them may make university seem like a much more reasonable decision, but will a university's costs be covered, and could they stay afloat? Making tuition free is the worst idea, as this will put the burden onto the taxpayer which ultimately may increase taxation and potentiate austerity; furthermore, free university will exhibit itself as an entitlement to people who simply have the 'right grades', which is a lenient and even shady process now, as people are getting into university when they're nowhere near the entry requirements.

However, the privilege value of university seems to have deteriorated massively. This links with everything squeakysquirrel mentioned, which I fully agree with.
There are far too many students simply going to university because they feel like they 'have to', and this bloats universities since they only want the money from the students; in other words, they're hesitant to remove the students which shouldn't really be there, as income will reduce. Not to mention, some of these students simply don't care and don't try - some simply drop out after a while on their own accord - as they're only there for the university life 'experience'. Hence, the point of keeping them on courses is minimal.
There are also far too many students that are, and I hate to say it, doing relatively pointless courses which are a surplus in universities and this consequently bloats them further. These courses require further investment, albeit from the students themselves, and the job prospects are relatively poor; these courses can be blamed for the graduate unemployment misconception, as there are no jobs actually available at the end of receiving said degrees, and this tarnishes the genuine employment which occurs at the end of other degrees.

Hence, my thoughts are that universities won't go bust per se, but would definitely struggle. I don't think we should return to polytechnics, but instead simplify universities and offer a limited set of 'proper' degrees which have definite employment potential. Keep tuition fees high, but not like they are currently. Additionally, students simply need guidance on whether university really is for them, as there's too much of a climate that students must go to university when it's quite clear that some of these students don't belong in higher education.
Last edited by Kian Stevens; 3 weeks ago
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04MR17
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The current industry is an entirely marketised system. Except it's taken several years to this point for some institutions to go bust, and some of them are taking their time doing that.

A market has to have winners and losers, but we seem to find institutions losing as shocking and something that shouldn't happen because society's attitude to education has always understood it to be something that is there and can be accessed and can't or shouldn't be taken away in any form. Including when a university is set up and is successful, it seems wrong for it to have financial difficulties and be forced to close because it's an educational establishment. Whereas from the funding perspective, a university is a business and should be treated as such.

So the answer to the question is universities were always meant to go bust, that's how neo-liberalism works. And we shouldn't be shocked about that.
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04MR17
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(Original post by Hannah Farbon)
Not forgetting the fact that students across the UK last February suffered from no tuition for an 8 week period during the industrial strike action WHICH WILL NOT BE REFUNDED. Scandalous.
Because you don't pay solely for tuition in your "tuition fee" so if the university paid the proportion of tuition time lost in those weeks for the hours missed converted into pounds they'd be paying a hell of a lot more than what the staff weren't paid, the university would make a huge loss from that policy and would likely have to sack staff in many institutions. It's totally unreasonable to expect a refund when your money is also spent on cleaning the buildings, maintaining accommodation, keeping the lights on, funding teams for welfare, student services, careers. You pay for a degree, which includes a wider university experience. You don't just pay for lectures. When you sign the enrolment forms you sign nothing about how many hours of tuition you'll be getting, there's nothing scandalous about it.
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04MR17
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(Original post by Pinkisk)
I agree Hannah.

The universities can easily compensate for the cut in tuition fees by cutting the salaries of the vice chancellors. I recently read an article that said that 30% of university spending in the UK goes on salaries and bonuses for the vice chancellors. This is beyond ridiculous. Universities need more regulation. the government needs to directly be involved in all decision making process for all universities. Salaries should be directly decided by the government, not the university. The tax payer is subsidising these institutes. We should have more say over where our money goes. At the moment they have total freedom over spending and when you find out that 30% of their spending goes on the salaries of vice chancellors that tells you instantly that they are abusing this freedom to further their own interests.

Vice Chancellor for the Bath Spa University receiving £800, 000 in 2017, that's what? the tuition fees for around 100 students? The tuition fees for 100 students at the Bath Spa University are going to pay the vice chancellor..That is just ridiculous.

https://www.bbc.com/news/uk-england-bristol-42260090
Let's take your example.

Bath Spa has 5 915 students.

If they all pay £9 250 per year, that's £54 713 750 student revenue for the institution.

If they all pay £7 500 per year (as suggested in OP) that's £44 362 500.

That is a shortfall of £10.5 million. And you think the £800k that goes to the VC is going to cover that £10.5 million hole? I know that you suggest a little more than that by including other management positions and bonuses, but you're still way off, and that's at the university with the highest VC salary. Let alone my own university where the salary is a quarter of the size at Bath Spa and we have close to double the number of students.


You propose to have greater government control, and that's all well and good but that requires a debt not to be placed on students if the government are going to be responsible for the education rather than the consumer in a market-based system.
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学生の父
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I suspect there will be some universities which fail in the next few years due to financial constraints. This will happen whether or not HM Government reduces the fee cap.

In the short term, I suspect that a neighbouring institution would take over a failing uni, and restructure it. Since they have royal charters, it would be in the public interest to ensure that the interests of existing students are secured until the end of their degree programmes.

Now, personally I think it's ridiculous that a less than prestigious uni can charge £9,250 for 6 contact hours a week in a course which will leave graduates ill-equipped for the job market. It's a waste of everybody's money. These institutions have become bloated and have lost their original purpose, and it's time for some pruning.

I would prefer the pruning to happen in a planned way at a political level, but my suspicion is that the laws of natural selection will apply. This could well be haphazard, unfortunately.

The Blairite mantra of 50% HE participation does not serve the British social economy well. I'm not suggesting we go back to the 1950s, but we seriously have to ask ourselves if having so many graduates adds sufficient value to our society to justify the size of the HE sector?
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999tigger
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(Original post by 04MR17)
Let's take your example.

Bath Spa has 5 915 students.

If they all pay £9 250 per year, that's £54 713 750 student revenue for the institution.

If they all pay £7 500 per year (as suggested in OP) that's £44 362 500.

That is a shortfall of £10.5 million. And you think the £800k that goes to the VC is going to cover that £10.5 million hole? I know that you suggest a little more than that by including other management positions and bonuses, but you're still way off, and that's at the university with the highest VC salary. Let alone my own university where the salary is a quarter of the size at Bath Spa and we have close to double the number of students.


You propose to have greater government control, and that's all well and good but that requires a debt not to be placed on students if the government are going to be responsible for the education rather than the consumer in a market-based system.
Bath gets £120m a year from fees and has a £243m income.
Next VC will be in £266k
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Notoriety
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No idea, don't work in uni finances.
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Ragboi
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The Unis on the verge of bankruptcy should be named and shamed so that potential students will understand the risk of attending that university.
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