UK universities stand to lose billions if the pandemic keeps foreign students away

Stephen Beard May 12, 2020
Heard on: Marketplace
A deserted All Souls College at Oxford University. Oxford has a large endowment, but foreign students make up 40% of those enrolled. Christopher Furlong/Getty Images

UK universities stand to lose billions if the pandemic keeps foreign students away

Stephen Beard May 12, 2020
A deserted All Souls College at Oxford University. Oxford has a large endowment, but foreign students make up 40% of those enrolled. Christopher Furlong/Getty Images

Hardly any business, it seems, is totally immune to the damaging economic effects of the COVID-19 crisis. Take Britain’s universities, for example. They usually sail through recessions virtually unscathed, but it doesn’t look as though they will this time.

The reason: their heavy dependence on foreign students. The U.K. is second only to the U.S. in the number of foreign students it educates — half a million, or 20% of its entire university student body. Fears are growing that travel restrictions, lockdowns and other consequences of the pandemic could jeopardize what is a vital source of revenue for Britain’s system of higher education.

“International students are absolutely critical to the financial well-being of our universities,” said Nick Hillman, director of the Higher Education Policy Institute. “Pretty much everything that British universities do loses money, except recruiting international students.”

Those students each pay, on average, more than $6,000 a year more than it costs to educate them, adding up to a profit of $3 billion a year for British academia.

Nick Hillman, director of the Higher Education Policy Institute (Courtesy Nick Hillman)

Now, the question occupying some of the country’s finest minds: will that profit evaporate come fall?

“Who knows if the airlines will be flying?” Hillman said. “And who knows if those international students due to arrive this autumn will actually get on a plane and arrive?”

And who knows whether most of them will want to come anyway? The largest group of foreign students in Britain is the Chinese, and some of them have not been made to feel welcome  since the pandemic began. Robin Zhang, at Cardiff University, complained to Sky News about the abuse that he and a fellow Chinese student, Lucy Jhu, suffered in the city.

“Four guys standing next to a door, shouting at me and my friend Lucy here, saying, ‘Hey! Coronavirus!’ and then laughing out loud,” Zhang said.

There have been some reported instances of physical attacks, too.

Yinxuan Huang of Manchester University (Courtesy Yinxuan Huang)

Yinxuan Huang, a researcher at Manchester University, says that such cases of overt xenophobia and racism against Chinese people have been relatively rare, but they have been amplified by social media, and that may deter some students from enrolling at a British university for the next academic year.

But more off-putting, he believes, is the widespread perception that the British government cannot be trusted to prevent a second wave of infections in the U.K.

“Lots of students that I’ve been speaking to think that the British government has been fairly incompetent in dealing with the crisis,” Huang said.

That may seem ironic when set against the Western allegations of incompetence and cover-up by the authorities in Beijing when the contagion began in Wuhan. And yet, Britain’s conduct has been widely criticized.

Sophie Wushuang Yi, a Ph.D. student at King’s College, London (Courtesy Sophie Wushuang Yi)

Sophie Wushuang Yi, a Ph.D. student at King’s College London, was certainly alarmed when she arrived back in the U.K. in February and found the British attitude to the pandemic more relaxed compared with China’s rigor.

“My temperature was checked three or four times even before I stepped on the plane in China,” she said. “And when I landed in the U.K., no one checked my temperature. No one cares. Not even the border staff.” 

Her parents in China were even more alarmed by the British response at the beginning of the outbreak.

“Wearing a face mask every day as they do, and seeing no one wears a face mask in the U.K., that really worried them,” Yi said.  

In spite of her parents’ worries, Yi is determined to resume her studies in the U.K. in the fall. 

But if, for whatever reason, large numbers of Chinese and other foreign students stay away from the U.K. next term, the consequences could be dire.

“It could be pretty catastrophic for many universities,” said Vivienne Stern of Universities UK, the main trade body for British academia. “There are 13 universities in the U.K. for whom about one-third of their income comes from international student fees.”

Vivienne Stern, international director at Universities UK (Courtesy Universities UK)

Stern added that the British government’s response to the universities’ request for a bailout had been “not unhelpful,”  but no extra money had been pledged, and so the financial threat to the sector remains.

“For some universities, it could mean closure. It could mean managed mergers with other institutions,” she said.  

The country’s oldest and most prestigious universities, Oxford and Cambridge, will certainly survive the crisis intact. Their vast endowments will make sure of that. But foreign students make up around 40% of the student body at both of these ancient institutions. So they, too, will suffer a substantial hit if the pandemic drives a lot of those international students away.

COVID-19 Economy FAQs

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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