UK universities suffer drop in overseas students after record number of deferrals

Britain's higher learning institutions face Covid-related losses of £19bn

UN Secretary General Antonio Guterres after receiving an honorary degree at Cambridge University, in November 2021.
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British universities are struggling to overcome a double blow caused by the Covid-19 pandemic after a record number of deferrals in 2020 and a sharp drop in 2021 applications from international students.

Universities UK International told The National that international undergraduate deferrals almost doubled in 2020, to 5,690 from 3,275, and latest figures show that 2021 deferrals were up 29 per cent from 2019, to 4,230.

Almost 37,000 students, from the UK and overseas combined, deferred their places in the UK last year – the highest figure in a decade and a 17 per cent increase to 36,790 from 30,325 in 2019 - according to the latest figures from UCAS, the admissions service.

The number that successfully applied from abroad to study in the UK in 2021 fell by 8 per cent from 2019, to 70,055 from 76,905, as the number of EU students almost halved from 31,765 to 16,025.

The total number of international applications received by the October 2021 deadline for people wanting to commence study in the UK in autumn this year was 21,820, compared with 22,730 the previous year, a further drop of 4 per cent.

UCAS said many who deferred in 2020 came to the UK in September 2021 to commence their studies, providing some relief for the sector.

With the Omicron variant raging across the globe, universities are once again bracing themselves for more Covid upheaval, with record numbers of students deferring places.

Many institutions internationally have started 2022 with some remote learning in a bid to ride the latest pandemic wave, but despite efforts to return to a form of normality some are still facing spiralling financial black holes.

In Britain, the Institute for Fiscal Studies (IFS) said UK universities are facing up to £19 billion ($25.8bn) in long-term losses from Covid-related trends.

A report last year by London Economics, commissioned by the Higher Education Policy Institute (HEPI) think tank, revealed that in 2018/19 the gross benefit from international students to the UK economy was £28.8bn, with fee revenue of £15bn.

The IFS believes higher-ranking institutes will be hardest hit by the loss of income.

Durham University offered some students a cash incentive to defer their places.

“The total size of the university sector’s losses from the Covid-19 pandemic is highly uncertain: we estimate that long-run losses could come in anywhere between £3 billion and £19 billion, or between 7.5 per cent and nearly half of the sector’s overall income in one year,” the IFS said.

“Our central estimate of the total long-run losses for the university sector is £11 billion, or more than a quarter of income in one year.

“More than half of these losses come from a combination of falls in international student enrolments this year and an increase in balance sheet provisions relating to pension deficits.

“Large sector-level losses mask substantial differences between institutions. In general, institutions with a large share of international students and those with substantial pension obligations will face the biggest falls in income or increases in costs. These tend to be higher-ranking universities, postgraduate-only institutions or prestigious arts schools.”

Some of Britain’s top Russell Group universities were forced to offer candidates financial incentives to defer their places as spaces on courses ran out.

Exeter and Bristol offered generous incentives to students on some oversubscribed courses who agreed to defer — including, in some cases, up to £10,000 and free accommodation in their first year.

Durham offered some prospective students £5,000 to defer their studies until this year.

“The pandemic has created challenges around the world so it is a testament to the quality and reputation of the UK university sector that international student numbers have remained competitive, with a rise in applicants placed from non-EU countries,” a Russell Group representative told The National.

“Our universities are working hard to provide a range of support to students, including those from overseas, to help them continue to thrive in their studies.”

UK saw record numbers of student deferrals in 2021

The latest figures released by UCAS show 21,820 international students had applied for 2022 study by the October 2021 deadline, compared with 22,730 in 2021.

“Universities recognise the disruption students have faced due to the pandemic and admissions teams will continue to ensure admissions processes are fair and transparent,” a representative for Universities UK told The National.

The number of UAE students rose to 1,465 in 2021 from 1,255 in 2019. In a two-year time frame the numbers of successful applicants from Saudi Arabia and Oman were also higher.

The UK is hoping to attract more international students with the launch last summer of its Graduate Route.

It will allow eligible students to stay in the UK to work, or look for work, for two years (three years if studying at PhD level) after they have completed their degree.

UCAS has also launched its free Myriad app for international students exploring postgraduate opportunities in the UK.

While interest from abroad can be expected to help the sector's recovery, the Covid-19 fallout is such that the IFS still fears some universities may face insolvency.

“With around £45 billion in reserves and an annual surplus of around £2 billion before the crisis, the university sector as a whole should be able to cope with substantial Covid-related losses,” Ben Waltmann, a Research Economist at IFS, said.

“However, some universities were already in a weak financial position before the crisis hit. For around a dozen of these institutions, insolvency is likely to become a very real prospect without a government bailout.”

Top 10 UK places international students are worth the most to the local economy per year

  • Sheffield Central — £290m
  • Nottingham South — £261m
  • Holborn and St Pancras — £243m
  • Newcastle upon Tyne East — £240m
  • East Ham — £217m
  • Cambridge — £214m
  • West Ham — £212m
  • Manchester Central — £211m
  • Oxford East — £211m
  • Liverpool, Riverside — £203m
Updated: January 13, 2022, 12:36 PM