HEPI study reveals students support university bailouts

According to a recent study by the Higher Education Policy Institute (HEPI), roughly three-quarters of students support the government providing funding if the event of their university being threatened with closure. About half thought student fees should be refunded.

This comes at a time of growing concern over financial difficulties in higher education, as well as growing debate over the role of government in providing bailouts.

The Office for Students (OFS) made a fool of themselves last November when, less than two weeks after they announced that they would not bail out universities in financial trouble, the BBC revealed that the OFS had provided a nearly £1 million bailout to an undisclosed university.

Last November, the Office for Students (OFS) came out against such forms of assistance. In a press release given by the independent regulator, chair Sir Michael Barber stated, “The OFS will not bail out providers in financial difficulty.

“This kind of thinking – not unlike the ‘too big to fail’ idea among the banks – will lead to poor decision making and a lack of financial discipline, is inconsistent with the principle of university autonomy and is not in students’ longer term interests.”

This statement quickly became foolish when, less than two weeks later, the BBC reported that the OFS had loaned nearly £1 million to an undisclosed university.  According to their reporting, the £900,000 bailout was issued summer 2018 due to a cash problem. The unnamed university, only described as small and modern, has since repaid the loan.  

While the OFS has only dug into their stance on bailouts, the HEPI numbers may indicate that students have differing views. Rachel Hewitt, HEPI’s Director of Policy and Advocacy, expressed such concern, stating “This research shows a worrying mismatch between students’ views of what should happen to a university in financial difficulty and the proposed action by the Office for Students.”

Also mentioned in the HEPI report was that:

  • 40% of students were aware of rumours that universities are facing financial difficulties
  • 83% of students are confident that their university is in a strong financial position
  • 97% of students want to know if their university in in financial difficulty
  • 84% of students say they would have been less likely to apply to their university if they had known it had financial difficulties

At present, the OFS refuses to disclose any names of universities they know are facing financial difficulties. This comes despite the near consensus of students wanting to know if their university is in financial trouble.

While a 2017 act requires that universities to issue Student Protection Plans, laying out expectations in the event of closure, according to HEPI’s reporting, only 5% of students were aware of such Protection Plans and only 2% had seen theirs. This may be due in part to a lack of availability—according to prior research undertaken by HEPI, 65 institutions registered under the OFS had yet to publicise their Student Protection Plans.

With growing uncertainty over tuition fees and the inability to depend on international students under Brexit, the issue of university bailouts is unlikely to fizzle out. Considering the opaqueness of most universities’ financial positions, students can only cross their fingers that their place of study won’t be the next Lehman Brothers.  

Help us produce quality journalism

London Student is not supported by any university or students' union. All our activity is funded by donations.