Tracee burst into the office this morning flourishing a new pair of shoes. At least I think they are shoes, as there's a chance they may breach several clauses of Home Office licensing guidance, so determined are their heels to intimidate. I don't know a lot about women's shoes, but I have seen enough of Sex And The City to recognise that red soles equate to a big price tag and I questioned Tracee about this, as she has previously been completely incompatible with any form of saving."It's okay," she said, "I don't have to pay back my student loan any more." I raised my eyebrows at this statement and she sighed, brandishing an article she had picked up on her Hauwei this morning (which means that the Chinese secret service have the same article and are now scanning it). It said that thirteen universities, or colleges, in the UK are at risk of going 'bankrupt' (sic) as the Coronavirus pandemic hits their finances. This came from a report by The Institute of Fiscal Studies which goes further, saying that the entire higher educational sector in Britain is in trouble.
A source at The Institute is quoted as saying, “The total income of the UK university sector is around £40bn per year, or around 1.8 per cent of national income. Much of this income is now at risk due to the Covid-19 outbreak.” Really? Much of £40bn? Hmm. The institutions at higher risk of collapse are those with a large share of international students and those with significant pension obligations and the Government have said they do not intend to bailout universities, some thinking this gives the green light to charge whatever they want in tuition and accommodation fees. So, they could make more in fees, right?
The 'thirteen universities going broke' headline is based on the assumption that only half of the usual number EU and international students would join British universities this autumn and that there would be 10 per cent fewer UK-based students, with some postponing their entry to higher education. It also assumes that all revenue from accommodation, catering and conferences would be lost for the rest of the academic year. “Our central estimate of total long-run losses is £11 billion or more than a quarter of income in one year,” The Institute said. We in the NTI newsroom think that's a lot of 'assuming' and with things moving on a daily basis and the demographic most attracted to higher education being the most resilient, not only to Covid-19 but this type of news report, we wonder how much of this is, well ... true.
However, reading this article didn't offer me any great clarity about Tracee's student loan (she went to The University of Inner Slough and achieved what she described on her CV as 'a grade' in 'Mid-Fashion and Media Studies'). She explained to me, as she removed a shoe to admire the sheer engineering, "well, with the universities closing I won't have to pay back my loan any more. Doh!"