Conceding to a revised offer for European students to have cheaper university tuition fees would hit cash-strapped UK universities with a £280m bill, new modelling suggests.
The offer from the EU, a compromise designed to unlock the UK’s Brexit reset deal, would see fees cut by less than was first demanded, but universities have warned the cost impact would still ultimately result in the loss of staff, courses and places for British students.
Brussels had originally demanded that EU students are charged the same university fees as domestic British students, rather than much higher international rates, as part of a youth mobility deal that is key to unlocking a wider Brexit reset agreement.
The UK has so far resisted the demand for fears of deepening British universities’ financial woes and suggested it would only be open to the idea in return for a deeper deal on trade, including on the EU’s British industry-threatening “Made In Europe” laws.
But Andy Burnham is under pressure to make a concession. The EU is steadfast in its demands that fees are cut as part of a youth mobility deal that has to be agreed to unlock a wider package of Brexit reset deals, including on food and drink trade and linking carbon markets.
In a bid to get the deals over the line by the end of the year, the EU is now offering a compromise, requesting that fees are lowered to the same level as the cost of delivering the course – higher than the initially demanded home fees, but still less than international rates.
But experts in the university sector have modelled the compromise offer and found this would still cost British universities around £280m, based on the current number of EU students in Britain.
Universities already cutting back
The modelling is based on Higher Education Statistics Agency university finance data and recent KPMG data on the cost of delivering undergraduate courses.
The EU’s compromise offer would see typical European students paying around £13,000 a year to study in the UK, according to The Telegraph.
This is around £3,000 more than domestic British students, but still well below the current rate for foreign students, which can reach up to £38,000 for undergraduates.
Universities have warned that lowering lucrative international fees for EU students would create a financial shortfall that risks university places being cut for domestic students, as well as reductions in research funding that could hit economic growth.
A £280m hit to university finances would also equate to a threat to 5,000 people’s jobs in the sector.
As The i Paper has previously reported, several institutions have already axed jobs and degree options as they wrestle with the funding crisis. The University of Nottingham is looking to cut 600 jobs over the next three years, with 281 staff already having taken voluntary redundancy.
There were 480 job losses at Cambridge last year, 424 at Durham, 200 at Newcastle, 295 at Queen’s University Belfast and 150 at Cardiff University, annual accounts and union reports show.
PM under pressure to agree a deal
The UK Trade and Business Commission, a cross-party, pro-EU group, recommended in December against lowering tuition fees for European students after taking evidence from senior business leaders, migration experts and the higher education sector.
However, the Prime Minister is under pressure to agree a deal, with attempts to delay talks on tuition fees to next year so they can be held alongside discussions on the EU’s “Made In Europe” policy, so far resisted in Brussels.
Both the UK and EU are working towards completing the trio of reset deals at a summit mooted for 20 November, meaning negotiations are entering their endgame.
The Russell Group, which previously estimated that charging EU students home fees would cost £580m, warned Burnham against lowering fees.
Hollie Chandler, director of strategic policy at the Russell Group, said: “UK research and higher education benefits greatly from a close and positive relationship with the EU.
“It’s good to see the Government being ambitious about the future of this relationship, with closer ties that encourage student and staff mobility and valuable research collaborations. But a deal that changes EU student fee status would put further strain on UK universities, and undermine the growth the Prime Minister is looking for.
“Moving EU students into the ‘home fee’ category would cost the sector well over £500m and put an extra squeeze on places for UK students at a time when we’re looking to boost education and employment opportunities for young people here.
“And in a context of sustained financial pressures, the loss of half a billion pounds from the sector would be another hit to universities as they strive to maximise their contribution to local communities and to regional and national economic growth – the importance of which the Prime Minister reiterated in his speech at the Innovation Nation summit on Friday.”
The UK Government has been approached for comment.
The EU did not comment.