Today we’re at Advance HE’s Student as Governor event and we’re liveblogging the sessions.
The event opened with a stark admission from former NUS President and now Associate Director (Governance) Aaron Porter that should concentrate minds across every university boardroom in the country. Seventy-five per cent of higher education institutions in England are expected to make a loss this year.
Three-quarters of our universities – the supposed engines of economic growth, the guardians of knowledge, the places we trust with our young people’s futures – are heading into deficit. And for many, this isn’t their first year in the red.
“Making a loss in one year, for most places is sustainable,” Aaron told the assembled student governors at Woburn House. “Making a loss for 2, 3, 4, 5 years starts to become unsustainable. You start to run out of cash, and that starts to become very serious.”
The awakening
The room is full of almost 100 new and returning student governors, drawn primarily from English institutions with scattered representation from Wales and Scotland. What struck Porter – and should strike anyone paying attention to university governance – was a notable improvement in one key metric: over half had already met their institution’s chair of governors.
“I have to say, I’ve been asking that question for the last 10 years, and it used to be really, really low at this point in the year,” Porter observed. This matters more than it might appear. The relationship between student governors and board chairs often determines whether student voices penetrate the governance apparatus or remain tokenistic window-dressing.
But the encouraging news pretty much ended there.
The complexity of higher education governance immediately emerged as Porter navigated terminology that varies bewilderingly across institutions. “Governing body. University Council. Board of Governors. Board of Trustees” are all different labels for what should be the same supreme authority – the body that sets budgets, carries legal obligations, hires and fires vice-chancellors, and makes the decisions that determine institutional survival.
“The key point here, it is the governing body,” Porter emphasised. “It is the supreme authority in your institution. It makes the most significant decisions.”
When student governors understand they’re entering the one space where their vice-chancellor is actually accountable rather than in control, the governance dynamic shifts fundamentally.
The policy landscape: a masterclass in managed decline
Next up, Mack from Wonkhe delivered a controlled demolition of any lingering optimism about higher education’s trajectory. His presentation, characteristically direct and data-heavy, laid bare the interconnected crises facing universities and students alike.
“Is everybody locked in because we’re going to do 30 minutes of what the hell is going on, why is it happening, and what we’re going to do next?” Marshall began, setting the tone for a session that pulled no punches.
The big questions he posed for governors cut to the heart of institutional responsibility:
What’s the plan on finances – and is it credible? What will the impacts be on students? Does the governing body understand the wider policy environment for universities? More crucially, does it understand the policy environment affecting students?
The mechanics of higher education’s financial crisis deserve close examination because they reveal a system that looks like it’s designed to fail. Universities face fixed PFI costs that prevent contraction, rocketing energy bills, staff pay rising above inflation, estate modernisation demands, and regulatory costs that multiply without corresponding funding.
But the real killer is the fundamental arithmetic of home student recruitment.
Tuition fees have been frozen at £9,000 since 2017. Through inflation, that £9,000 is now worth approximately £6,000 in real terms. Universities lose money on every single domestic undergraduate they recruit – the gap has to be filled somehow.
So they turned to international students – particularly postgraduate taught courses where fees could be set at market rates. “In doing so, they kind of top up that difference for a little while,” Marshall explained. “Unfortunately, this led to what you would call an over-reliance on international student income.”
Then the government changed visa rules in January 2023, preventing postgraduate taught students from bringing dependents, and international applications collapsed. The government’s response? A modest fee increase to £9,535, immediately offset by National Insurance hikes that wiped out any benefit.
Shrinkflation comes to higher education
One of Marshall’s most memorable illustrations involved chocolate oranges and Pringles. In 2012, a Chocolate Orange weighed 175 grams and cost about a pound. Today, it weighs 157 grams and costs £1.50. Same product, smaller size, higher price.
“We’re seeing shrinkflation,” he said, “so whilst you might have been advertised in the past, you know, the world class teaching and learning experience, you know you can be taught by these amazing professors, and you’re going to get all these module choices. All of a sudden, 10 module choices become seven, and your library that’s open 24 hours is now open 12.”
The terminology matters. When Marshall referenced university responses to financial pressure, he was describing strategies that directly impact student experience while hoping students won’t notice the degradation.
The implications for student protection are sobering. Half the universities surveyed have been forced to close courses to reduce costs – double the previous year. Course consolidations jumped to 55 per cent. Optional modules have been cut too.
In England, Student protection plans exist as regulatory requirements, but Marshall’s assessment was withering: “vague” and “not detailed enough to navigate a closure.” When an actual course closure occurs, “it’s an absolute mess.”
“You might have to have a student protection plan for regulatory reasons. You might have approved it very quickly… But that doesn’t mean that when it actually comes to closing a course, that it’s practical, and then it actually works in practice.”
The borrowing costs problem
Arguably the most damning element of Marshall’s analysis concerned the economics of student loan funding. The government borrows money on gilt markets at around 4 per cent interest to lend to students at RPI inflation rates (currently around 3.2 per cent).
“So basically the interest rates on government debt is about 4 per cent… that’s 1.6 per cent higher than what the government is charging on student loans,” Marshall explained. “So basically they’re not getting that money back because the loan interest is higher than what they… they’re not getting the money back that they’re actually loaning out.”
The human cost emerges in Marshall’s analysis of student finances. Two-thirds of students now work during term time. Ninety-six per cent of international students and 84 per cent of home students expect to work.
But this isn’t supplementary income for social activities. “Work is about survival, it’s a necessity, not a choice,” Marshall said. “We’ve switched… 10 years ago, work was, you know, an extra night out, to buy some new clothes. Whatever. Work is about survival.”
Maintenance loan increases haven’t kept pace with inflation, and food inflation – what students spend most of their money on – runs significantly higher than general inflation.
Marshall’s cost-of-living model showed three categories: students with “endless choices” in the blue zone, those in an “ideal” orange buffer zone, and those in the red “danger zone” making decisions about “heating and eating.” The arrow pointed downward.
What should be on governors’ minds
Marshall concluded with policy issues that governing bodies often ignore despite their direct impact on institutional sustainability:
- The delayed Higher Education Skills White Paper.
- Industrial action becoming easier to organise.
- Consumer protection strengthening.
- Immigration levy implementation.
- Renters’ Rights Act chaos in student housing markets.
“All of you will want to keep up with higher education policy in your roles anyway, but as governors, you want to be on top of this even more, because it’s not guaranteed that the people in those rooms are reading the papers,” Marshall warned.
Student governors may find themselves the most informed people in governance meetings about policies directly affecting their institutions. That’s both an opportunity and a responsibility.
