Will recruiting more home students be enough to help providers who will lose out internationally?

Within broader international student numbers and financial data we can see some providers that are particularly dependent on student fee income from students in Asia. Martine Garland shows us who they are.

You may recall, back in February, a piece on the importance of income diversification.

In other words, universities should not be overly reliant on any one source of income – to mitigate against the vagaries of market forces and public policy. My analysis showed that by virtue of being institutions of learning, tuition fees will naturally form the largest source of income, however the diversified income portfolios revealed a strategy focused on growing research funding, third-stream income, donations and investments.

The article highlighted institutions like Imperial, UCL and Oxford, whose income portfolios (illustrated in table 1) are the most balanced in the sector and thus less vulnerable to ‘shocks’ should any one particular income source become compromised.

The limits of concentration

Table 1: Examples of diversified income portfolios 2018-19

HE ProviderCore tuition fees as a % of total incomeFunding body income as a % of total incomeCore research income as a % of total incomeCore other income as a % of total incomeInvest & donate income as a % of total incomeThird stream income as a % of total income
Imperial College London29%15%20%13%7.80%15.80%
University College London37%14%21%10%3.30%13.80%
The University of Oxford13%8%17%40%8.90%12.50%

Well, now the time has come for one income stream is about to become severely challenged – but fortunately for some, tuition fees do not make up the majority of their income. I’m not saying that for them it will be a walk in the park -other sources of income will also be affected – but they may be feeling less uncomfortable than those post-1992 universities who have more concentrated income portfolios such as Suffolk, De Montfort, and Sunderland as shown in table 2.

Table 2: Examples of concentrated income portfolios 2018-19

HE ProviderCore tuition fees as a % of total incomeFunding body income as a % of total incomeCore research income as a % of total incomeCore other income as a % of total incomeInvest & donate income as a % of total incomeThird stream income as a % of total income
University of Suffolk87%5%0%3%0.20%3.70%
De Montfort University85%7%0%4%0.60%3.50%
The University of Sunderland84%7%0%3%1.40%4.40%

Internationally speaking

However, things start to balance out a bit more when we consider the balance between domestic and international students. Fortunately, the institutions most reliant on tuition fees, are less reliant on international student numbers (illustrated in table 3).

Table 3: Higher dependence on tuition fee income but lower proportions of international students

HE ProviderTotal non-UK domicile studentsNon-UK as % of total student populationCore tuition fees as a % of total income
De Montfort University5,29020%85%
The University of Sunderland2,77519%84%
University of Suffolk6258%87%

Whereas although the Russell Group and pre-1992 universities are less reliant on tuition fees, they are more reliant on international students (see table 4).

Table 4: Lower dependency on tuition fee income but higher proportions of international students

HE ProviderTotal non-UK domicile studentsNon-UK as % of total student populationCore tuition fees as a % of total income
Imperial College London10,07553%29%
University College London19,63548%37%
The University of Oxford8,50033%13%

Can recruiting more home students compensate?

To answer this question we need to get a feel for what international student fees look like. Table 5 provides a quick snapshot of a degree common to many universities.

Table 5: International fees for BSc and MSc in Computing or related 2020-21

HE ProviderInternational Undergrad (46% of total)International PostGrad (54% of total)
Imperial College London£31,750 £33,250
University College London£31,270 £30,400
King's College London£26,700 £26,550
Falmouth University£16,000 £16,000
De Montfort University£14,250 £15,600
The University of Sunderland£12,000 £13,500

What becomes clear, is the potential loss of an international student leaves a hole in your finances that is not easily plugged by a domestic student (or even three domestic students in some cases!). So you may not be so dependent on tuition fees in your balanced income portfolio, but in terms of student numbers, you may now be needing more students to maintain the financial status quo.

Some of the current debate is whether it will be just international student recruitment that suffers, or whether it will be domestic numbers also. Only time will tell on that one, research shows in times of recession demand can increase, also remember many UK students go abroad to study, I’m guessing now this is much less likely. Another interesting factor to consider in our new reality is whether the big London universities feel less appealing? Will more students start to seek out university towns like Aberystwyth?

Plugging the gaps?

Whatever happens with domestic demand we should brace ourselves for toilet-roll scale competition, particularly when we consider how many students the Russell Group universities are going to need to plug their international fee gap. In that context, the re-introduction of a numbers cap would seem like a smart move to protect the newer institutions.

Within the international student fee income source, there is a further consideration – what regions are the students from? Countries have been affected to different degrees and normality will resume in some countries sooner than others, so who has a more distributed exposure in terms of geography? This brings us back to the concept of diversification and a balanced portfolio – what happens when we apply the calculation to international students rather than to income sources? See table 6.

Table 6: Example of geographically balanced international student portfolios

HE ProviderTotal non-UK domicile studentsAsia as % of non-UKOther EU as % of non-UKMiddle East as % of non-UKNorth America as % of non-UKAfrica as % of non-UKOther Europe as % of non-UKSouth America as % of non-UKAustralasia as % of non-UK
Leeds Beckett University1,38526%30%21%8%10%5%0.70%0.70%
The University of Oxford8,50029%31%3%21%5%5%1.90%4.70%
The University of Salford1,80516%30%23%3%24%2%0.80%0.60%
The University of Brighton2,68522%36%19%6%10%5%1.10%0.40%
The University of Westminster6,44530%34%7%14%5%7%1.80%0.40%
Roehampton University1,19514%42%7%11%8%15%2.50%0.40%
The University of Kent4,19030%36%7%9%12%5%0.70%0.40%

However, top of the mind at the moment are those universities with a more concentrated geographical portfolio – as, alas, it tends to reflect an over-dependence on students from Asia as can be seen in table 7.

Table 7: Example of international student portfolios with a concentration on Asia

HE ProviderTotal non-UK domicile studentsAsia as % of non-UKOther EU as % of non-UKMiddle East as % of non-UKNorth America as % of non-UKAfrica as % of non-UKOther Europe as % of non-UKSouth America as % of non-UKAustralasia as % of non-UK
The University of Liverpool8,71572%12%9.00%1.90%3.20%1.10%0.60%0.60%
Cardiff University8,62066%17%10.00%2.60%3.10%1.30%0.50%0.20%
The University of Sheffield10,08066%15%6.60%3.30%5.10%2.20%1.00%0.20%
The University of Bristol6,50563%20%3.60%4.40%3.80%3.20%1.40%0.20%
De Montfort University5,29062%22%5.90%1.00%6.30%1.70%0.50%0.10%
The University of Birmingham9,12563%17%6.00%4.70%5.80%2.00%0.80%0.40%
The University of East Anglia3,79561%22%3.80%3.20%5.30%3.00%0.70%0.10%
The University of York4,18562%20%3.90%6.60%2.60%3.50%1.60%0.40%
The University of Warwick9,58058%28%3.30%1.80%3.80%3.80%0.80%0.40%
University of Durham5,75561%19%3.60%8.00%2.90%4.40%1.00%0.70%
The University of Southampton6,68558%26%4.60%4.30%3.20%2.20%0.80%0.10%
Sheffield Hallam University2,25060%22%5.30%1.60%10.00%1.80%0.20%0.00%
The University of Leeds9,23561%17%10.90%3.40%5.40%1.70%0.90%0.30%

For all the analysis, whoever you are, and wherever your dependencies lie, there can be no doubt the sector has financially challenging times ahead. The government must acknowledge this situation is not of our making and bring in measures to protect the future of our institutions, the students they educate, the staff they employ and the civic contribution they make.

In closing, remember student recruitment is only half the story – we must do our part to retain the students we already have, not just for our finances but for their sense of purpose and wellbeing. Speaking as a lecturer, it is desperately important to support our students. Find new and creative ways to engage with them, give them focus at a time when they may be feeling somewhat adrift.

We still have the rest of this term to show both our domestic and international students learning at a distance is possible and there is no need to consider deferring their studies. Yes, for some technical subjects this is more difficult, but it’s time to think outside the box, this situation won’t last forever.

Student proportion lookup for all providers

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Research cross-subsidy

Despite the ‘international student fees cross-subsiding research’ rhetoric, I’m not convinced there is a strong correlation between research intensity and international student fees.

Table 8: Research intensity (total research income divided by total academic staff) compared with % of international students

HE ProviderResearch income per academic FTE% students non-UK 2018-19
Imperial College London959450.53
The University of Oxford810070.33
The University of Cambridge792380.35
University College London741900.48
The University of Liverpool559510.29
The University of Bristol531550.25
King's College London525780.38
The University of Manchester511030.36
The University of Sheffield498690.33
Queen Mary University of London473000.34
The University of Warwick464930.37
Newcastle University444130.25
The University of Leeds437230.25
The University of Southampton423050.29
The University of Birmingham402780.26
The University of York38276Less than 25%
The University of Exeter362380.25
University of Nottingham35337Less than 25%
University of Durham352980.3
London School of Economics267880.68

7 responses to “Will recruiting more home students be enough to help providers who will lose out internationally?

  1. Unless I missed something, it’s striking that all the named institutions are in England or Wales. Perhaps that simply reflects the underlying dataset?

    1. Hi Mark. Because the situation is so different in Scotland Martine chose to look at England and Wales only.

  2. Some real food for thought here! Could I ascertain how Research Income per Academic FTE was calculated in Table 8 please?

  3. That’s an interesting read. Thank you. It is surprising to see the high proportion of Asian students at certain universities and as suggested by the author, how the imbalance might financially impact these institutions more than others. However, I’m still convinced that the Asian purchasing power will prevail after the outbreak is over so their reliance on such income might not be a bane in a year or two from now. Time will tell.

  4. The university student fees based income are also derived from international collaborations. These collaborations although equally disrupted by the Corona pandemic will continue to be a buffer against any reduction in new international arrivals to UK. Alternatively, international collaborations may be more attractive to students who are still reluctant to leave home to UK.

  5. Interesting. But what about the loss of EU students? That too needs to be taken into account once Brexit is finalised

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