News round-up: Universities are hoarding £44bn in reserves – but the cost of a student loan will rise

Universities now hold three times as much in reserves as they did in 2011-12, just before higher tuition fees were introduced

Universities sit on £44bn after tuition fee increase

The Times, 27/04/2018, Rosemary Bennett

Universities are ‘hoarding’ £44 billion of reserves, more than the entire annual schools budget, according to a report on their finances. University wealth has ballooned since tuition fees were trebled in 2012. Budget surpluses in the last academic year amounted to £2.27 billion across the UK’s 164 universities, more than double the £1.11 billion surplus in 2011-12, the year before the higher tuition fees came in. Total income last year was £35.7 billion, up about a third since 2011-12.

However, it is the reserves that are most striking in the annual sector accounts, published by the Higher Education Statistical Authority (HESA). The year before tuition fees rose to £9,000, reserves stood at £14.7 billion. In the 2016-17 academic year they were worth £44.27 billion.

Nick Hillman, chief executive of the Higher Education Policy Institute, said that with so much uncertainty around the future of university finances, accumulating reserves was sensible and likely to continue.

Student loans: mother threatens court action which could save graduates thousands

The Daily Telegraph, 27/04/2018

Students paying eye-watering rates of interest on their student loans could gain a reprieve as the Government faces possible legal action.

After taking advice, a mother of two, whose twin daughters both went to university, has written to education secretary Damian Hinds challenging the official interest rate. She suggests the current rates could be a breach of the law.

I thought US universities were driven by profit – until I moved to the UK

The Guardian, Higher Education Network, 27/04/2018, anon

Anonymous academic blogs about the transition from US higher education to working in a UK institution and the extent to which the UK university sector is market-driven and run on a corporate model.

Why we should bulldoze the business school

The Guardian [journal], 27/04/2018, Martin Parker

Feature about business schools and why they should be abolished: “Business schools have huge influence, yet they are also widely regarded to be intellectually fraudulent places, fostering a culture of short-termism and greed. […] Many business school professors, particularly in north America, have argued that their institutions have gone horribly astray. B-schools have been corrupted, they say, by deans following the money, teachers giving the punters what they want, researchers pumping out paint-by-numbers papers for journals that no one reads and students expecting a qualification in return for their cash (or, more likely, their parents’ cash). At the end of it all, most business-school graduates won’t become high-level managers anyway, just precarious cubicle drones in anonymous office blocks.”

Student complaints about UK universities growing, says watchdog

The Guardian, 26/04/2018, Richard Adams

Complaints to the universities watchdog are on the rise again, with unhappy students receiving a total of more than £650,000 in refunds and compensation last year.

The annual report of the Office of the Independent Adjudicator showed that an increasing proportion of complaints were from students dissatisfied with poor facilities, and with course content differing to what was originally offered. Complaints also arose over a lack of teaching and supervision.

Overseas students more likely to appeal UK university decisions

Times Higher Education, 26/04/2018, Jack Grove

OIA report reveals payout of almost £50k to an international PhD student kicked off their course.

Foreign academics ‘in debt’ after paying thousands in UK visa fees

Times Higher Education, 26/04/2018, Rachel Pells

Big hikes in visa, right to remain fees bring ‘under the radar’ issue to fore and prompt post-Brexit worries for EU staff

Drugs ‘used by two in five students’

BBC News, 26/04/2018, Sean Coughlan

About two in five students are drug users, says a study from the National Union of Students. But the students’ union argues that students should not be disciplined for ‘drug-related behaviour that does not constitute a criminal offence’.

The most widely used drugs, in a survey of 2,800 students, were cannabis, ecstasy, nitrous oxide and cocaine.  A formal warning was the most common disciplinary action taken by universities over drug use.

The NUS report found drug use to be ‘a common, although infrequent, behaviour’ – with 39% of students using drugs, and cannabis by far the most widely used.

A further 17% had used drugs before, meaning 56% in total had at some time tried them.

UK universities use business schools as cash cows

Financial Times, 25/04/2018, Jonathan Moules

The number of UK universities offering business degrees has increased by 44 per cent in the past nine years, as they try to boost their finances with revenue from business students.

Some 102 UK institutions offered business degree programmes in 2009, the first year the Association to Advance Collegiate Schools of Business, the business school accreditation body, started compiling national figures. That number has now risen to 147. Of these, 31 have received prestigious AACSB accreditation, compared with 13 in 2009.

‘Graduate premium’ holds steady despite rising student numbers

Financial Times, 24/4/2018, Gavin Jackson

A rapid increase in the number of students going to university in the UK has done little to reduce the difference between graduate earnings and non-graduate earnings, according to figures published on Tuesday by the Department for Education.

Working-class students pay premium for being poor, report says

The Guardian, 23/04/2018, Sally Weale

Working-class students are penalised by a ‘poverty premium’, often paying higher costs to continue studying in a university environment in which they may feel isolated and as though they do not belong, according to a report.

Research for the National Union of Students finds that student expenditure routinely outstrips income from loans, leaving many whose parents cannot afford to subsidise them without the means to pay for basics such as food and heating.

Fees for halls are often unaffordable for those struggling on maintenance loans, with many universities setting rents above inflation to generate additional income, the study claims.

It quotes the results of a freedom of information request by the University of East Anglia students’ union, which found that more than 20 higher education institutions generated more than £1,000 profit per bed space a year.

Ministers under fire as student loan interest hits 6.3%

The Guardian, 18/04/2018, Richard Partington

Ministers are facing renewed criticism over university funding after an increase in student loan borrowing costs using a ‘flawed’ measure of inflation. The interest rate on loans for students in England, Wales and Northern Ireland will rise by up to 6.3% from September, up from the current 6.1% for anyone who started studying after 2012.

The change is a consequence of the increase in the retail price index (RPI) for last month to 3.3% from 3.1% in March a year ago. The government links the interest rate on student loans to the RPI reading for March each year, plus 3%.

Economists have long criticised the government for using RPI, which is typically higher than other measures of inflation and fails to take into account some forms of household costs. The RPI lost its status as a national statistic in 2013 and the Office for National Statistics advises against its use.

 

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