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Is the University bubble about to burst?


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Posted (edited)

As @sancho panza suggested, this topic deserves its own thread.

Is the University bubble about to burst..?

I currently live in Edinburgh which is home to four universities and the city has a substantial student population (~68000 or 12-14%, depending on the source). Approximately 35% of those are coming from abroad. As most of them need to be accommodated in some way, students have a big impact on the housing market here in addition to Airbnb rise in recent years. With the Covid crisis students are leaving the city and Universities are getting more and more worried about future enrolments and income from foreign students.

Here is a few years old, reference study called Students: numbers, distribution and implications:

https://www.edinburgh.gov.uk/downloads/file/24274/students-numbers-distribution-and-implications 

and here is a recent article:

https://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-52666042

University of Edinburgh under 'serious threat' from pandemic

By Jamie McIvorBBC Scotland education correspondent
  • 15 May 2020
 

The financial health of one of Scotland's top universities is under "serious threat" from the coronavirus pandemic, according to its principal.

Prof Peter Mathieson, of the University of Edinburgh, told BBC Scotland annual income could drop by up to £150m.

He said the university may no longer need the scale of buildings and facilities it currently has.

The Scottish Parliament's education committee will hear evidence about college and university funding later.

It will hear from the chief executive of the Scottish Funding Council which pays for the places of Scottish students.

But this is only one source of income for universities. Other sources include the substantial tuition fees paid by students from outside Europe and commercial ventures.

Universities across Scotland fear they could lose out on £500m between them.

Edinburgh, which has an annual income of £1bn, has running costs, including wages, of around £90m a month.

The single biggest challenge for the university is the likelihood of a large drop in the number of students from outside Europe, some of whom pay tuition fees of around £30,000 a year.

The university still does not know how big the drop will be but there have been warnings it could range from a 25% fall to a complete collapse.

Prof Mathieson said: "We're trying to be honest and transparent with our staff, so we've said that at the moment we're looking at things like limiting pay rises and limiting promotions in the next academic year because that will save us money.

"We haven't started talking about redundancies but all universities are looking at their future size and their shape.

"Obviously, if we are receiving smaller number of students and many more of our staff are working from home, which I do anticipate will continue to be the case for some time to come, then we may not need the scale of buildings and facilities that we originally thought we needed."

The possible impact on staff and wages has already been announced.

The University of Edinburgh enjoys a strong international reputation and attracts thousands of fee-paying students from North America and the Far East.

There is a concern some new international students may not start courses this autumn and that those who are already studying may not return for now.

It may take three to four years for their numbers to recover once the crisis is over.

'Strongest shape'

Generally speaking, the older universities in Scotland gain the most income from international students and other commercial ventures - these play a big part in ensuring the institutions are financially viable and help pay for the facilities also enjoyed by Scottish and UK students.

Prof Mathieson said: "Paradoxically the universities which are the most threatened by coronavirus are actually Edinburgh, Glasgow, St Andrews... The universities that have the highest proportion of international students.

"Going into all of this you might have said they were in strongest shape.

"Ironically, because our business model depends so much on international students and other events like conferences and catering, which we are able to put on because of our scale, we are seriously threatened."

Universities Scotland has already spelled out the scale of the challenge which faces the sector as a whole.

Prof Mathieson said the sector was hoping for further help from both the Scottish and UK governments.

Online ceremony

He also spoke about some of the practical challenges which were facing students while the impact of the pandemic continues.

One possibility is that students later this year may be able to begin their studies remotely instead of attending lectures and tutorials as normal.

The university has also been talking to partner universities overseas. Some international students may be able to start their studies there and then move to Edinburgh once they are able to do so.

Like other universities, Edinburgh has cancelled traditional summer graduation ceremonies. Students will be offered the chance to take part in traditional ceremonies in the future.

But a special "online graduation ceremony" was held for some medical students before they went out to join the workforce.

Edited by BearyBear
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Any new student starting at a London uni this year who borrows the entire fees and living loans will graduate with 65K of debt, its reached the point where I would expect a sustained decline in number

A significant number become unemployable and have to pick up gig after gig on campus. Bit of supervision, tutorials, admin, campus management whatever. I had a mate (no longer) who still works in the

Quick, can someone pass me my world’s smallest violin.  

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Any new student starting at a London uni this year who borrows the entire fees and living loans will graduate with 65K of debt, its reached the point where I would expect a sustained decline in numbers of young people willing to take on such huge amounts of debts. There is also a growing cohort of graduates with 50K plus of debt who have not got the kind of jobs they thought they would get and will be voicing the fact that the whole uni thing was a pointless waste of money

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19 minutes ago, Talking Monkey said:

Any new student starting at a London uni this year who borrows the entire fees and living loans will graduate with 65K of debt, its reached the point where I would expect a sustained decline in numbers of young people willing to take on such huge amounts of debts. There is also a growing cohort of graduates with 50K plus of debt who have not got the kind of jobs they thought they would get and will be voicing the fact that the whole uni thing was a pointless waste of money

That's been going on for at least 10 years.

I've family who are 27-22. All the kids bar one have avoided HE due to the horror series of the debt overhang.

The one who went is doing a job she could have got at 18, without the 10% grad tax on her earnings.

Massive HE backfire of over promising n under delivering.

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2 minutes ago, spygirl said:

That's been going on for at least 10 years.

I've family who are 27-22. All the kids bar one have avoided HE due to the horror series of the debt overhang.

The one who went is doing a job she could have got at 18, without the 10% grad tax on her earnings.

Massive HE backfire of over promising n under delivering.

I know some who have the undergrad and then postgrad so effectively giving them a 15% tax on anything they earn over about 25K, its just madness

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What if the Covid crisis persists which is getting more and more likely? If they permanently switch to e-learning, nobody will pay the same money for a completely different experience! Existing students may also rebel and drop courses and/or demand lower fees.

I think traditional Universities are boiled all over the world. They were outdated anyways.

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39 minutes ago, Talking Monkey said:

I know some who have the undergrad and then postgrad so effectively giving them a 15% tax on anything they earn over about 25K, its just madness

Its the time lost too.

Missy Crap-Humanities - resit A levels (19), Uni (22) Travel/Gap (23), crap London job, which fails/hit Daddys credit limits after 4/5 years (28) PGCE (29), finally start proper work, as a teacher, at 30, just in time to start having babies ....

12 lost years. No reason why you could not train to be teacher after A levels, esp for primary/secondary. Non subject degrees add fuck all.

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And lost time is lost earnings.

Lets say Missy could be a teacher after A levels n PGCE. Call it 20.

10 x 20k = 200k lost earnings.

I finished HE at 23. Some of my mates had started earning at 16, call it 19, when they finished the apprenticeship.

4 years @ 15k-ish - 60k earnings.

V (today) - 60k of debt, repaid via the 10% grad tax, which makes catching up almost impossible for anyone bar the v high earners, on 60K+ 5 years after graduating.

The studies, which show dire outcome, always ignore the lost earning years, which make the sums look even worse.

 

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13 minutes ago, spygirl said:

And lost time is lost earnings.

Lets say Missy could be a teacher after A levels n PGCE. Call it 20.

10 x 20k = 200k lost earnings.

I finished HE at 23. Some of my mates had started earning at 16, call it 19, when they finished the apprenticeship.

4 years @ 15k-ish - 60k earnings.

V (today) - 60k of debt, repaid via the 10% grad tax, which makes catching up almost impossible for anyone bar the v high earners, on 60K+ 5 years after graduating.

The studies, which show dire outcome, always ignore the lost earning years, which make the sums look even worse.

 

A mate's brother did an undergrad, then a masters, then a research masters and now doing a PHD, some science/engineering type stuff. In his final year of undergrad he was looking to get on a grad scheme,  but then got on the postgrad train, thats 5 years of lost earnings. I also doubt the PHD will give him that much of a bump in starting salary

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5 hours ago, Talking Monkey said:

A mate's brother did an undergrad, then a masters, then a research masters and now doing a PHD, some science/engineering type stuff. In his final year of undergrad he was looking to get on a grad scheme,  but then got on the postgrad train, thats 5 years of lost earnings. I also doubt the PHD will give him that much of a bump in starting salary

A significant number become unemployable and have to pick up gig after gig on campus. Bit of supervision, tutorials, admin, campus management whatever. I had a mate (no longer) who still works in the labs so far as I am aware at our old university. He wasn't even a good chemist but went through the foundation year, then undergrad, then masters then PHD (which seem to take him an age to get). That left him about 30 having never had a proper job. Seriously, unless you are an unadulterated genius many corporates won't touch you at that point. We stopped speaking as on the very rare occasion I saw him it was like going back in time 10 years except we were much older, he hadn't grown up at all in my eyes. He also went rabidly left wing which is quite understandable given his entire adult life had been on a university campus, that obviously put him at odds with my Dosbodian views.

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9 hours ago, BearyBear said:

As @sancho panza suggested, this topic deserves its own thread.

Is the University bubble about to burst..?

I currently live in Edinburgh which is home to four universities and the city has a substantial student population (~68000 or 12-14%, depending on the source). Approximately 35% of those are coming from abroad. As most of them need to be accommodated in some way, students have a big impact on the housing market here in addition to Airbnb rise in recent years. With the Covid crisis students are leaving the city and Universities are getting more and more worried about future enrolments and income from foreign students.

Here is a few years old, reference study called Students: numbers, distribution and implications:

https://www.edinburgh.gov.uk/downloads/file/24274/students-numbers-distribution-and-implications 

and here is a recent article:

https://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-52666042

University of Edinburgh under 'serious threat' from pandemic

By Jamie McIvorBBC Scotland education correspondent
  • 15 May 2020
 

The financial health of one of Scotland's top universities is under "serious threat" from the coronavirus pandemic, according to its principal.

Prof Peter Mathieson, of the University of Edinburgh, told BBC Scotland annual income could drop by up to £150m.

He said the university may no longer need the scale of buildings and facilities it currently has.

The Scottish Parliament's education committee will hear evidence about college and university funding later.

It will hear from the chief executive of the Scottish Funding Council which pays for the places of Scottish students.

But this is only one source of income for universities. Other sources include the substantial tuition fees paid by students from outside Europe and commercial ventures.

Universities across Scotland fear they could lose out on £500m between them.

Edinburgh, which has an annual income of £1bn, has running costs, including wages, of around £90m a month.

The single biggest challenge for the university is the likelihood of a large drop in the number of students from outside Europe, some of whom pay tuition fees of around £30,000 a year.

The university still does not know how big the drop will be but there have been warnings it could range from a 25% fall to a complete collapse.

Prof Mathieson said: "We're trying to be honest and transparent with our staff, so we've said that at the moment we're looking at things like limiting pay rises and limiting promotions in the next academic year because that will save us money.

"We haven't started talking about redundancies but all universities are looking at their future size and their shape.

"Obviously, if we are receiving smaller number of students and many more of our staff are working from home, which I do anticipate will continue to be the case for some time to come, then we may not need the scale of buildings and facilities that we originally thought we needed."

The possible impact on staff and wages has already been announced.

The University of Edinburgh enjoys a strong international reputation and attracts thousands of fee-paying students from North America and the Far East.

There is a concern some new international students may not start courses this autumn and that those who are already studying may not return for now.

It may take three to four years for their numbers to recover once the crisis is over.

'Strongest shape'

Generally speaking, the older universities in Scotland gain the most income from international students and other commercial ventures - these play a big part in ensuring the institutions are financially viable and help pay for the facilities also enjoyed by Scottish and UK students.

Prof Mathieson said: "Paradoxically the universities which are the most threatened by coronavirus are actually Edinburgh, Glasgow, St Andrews... The universities that have the highest proportion of international students.

"Going into all of this you might have said they were in strongest shape.

"Ironically, because our business model depends so much on international students and other events like conferences and catering, which we are able to put on because of our scale, we are seriously threatened."

Universities Scotland has already spelled out the scale of the challenge which faces the sector as a whole.

Prof Mathieson said the sector was hoping for further help from both the Scottish and UK governments.

Online ceremony

He also spoke about some of the practical challenges which were facing students while the impact of the pandemic continues.

One possibility is that students later this year may be able to begin their studies remotely instead of attending lectures and tutorials as normal.

The university has also been talking to partner universities overseas. Some international students may be able to start their studies there and then move to Edinburgh once they are able to do so.

Like other universities, Edinburgh has cancelled traditional summer graduation ceremonies. Students will be offered the chance to take part in traditional ceremonies in the future.

But a special "online graduation ceremony" was held for some medical students before they went out to join the workforce.

I think that's a fair assessment. I used to be a lecturist, but I left once I found it as shonky as hell. I suspect that a lot of unis are going to be taking some serious haircuts come the autumn and, for some of them, it's going to be extremely existential for them. There seems to be far too many polyversities and former colleges of FE that became unis that were right on the edge of their turnover in the good years. The next few years are going to be very bad years indeed.

Hopefully, far fewer school leavers will be tempted by remote learning at home while the are 'at' uni, which will be great to see fewer kids getting shafted with long-term debt.

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Posted (edited)

It will be interesting to see how overseas student numbers drop over the next 3 years or so.

I know Queens really liked packing in the overseas students cause they paid so much, and a huge new very expensive student accomodation building was built a couple years back pretty much soely for rich asian students (the cost to rent a single room was close to the cost of renting a one bed apartment elsehwere in the city).

There's been a shitload of building going on at the other side of Belfast city centre for the University of Ulster; the Belfast economy being built on tourism and two universities....all of which are going to take a major haircut IMO.

Edited by JoeDavola
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42 minutes ago, SillyBilly said:

A significant number become unemployable and have to pick up gig after gig on campus. Bit of supervision, tutorials, admin, campus management whatever. I had a mate (no longer) who still works in the labs so far as I am aware at our old university. He wasn't even a good chemist but went through the foundation year, then undergrad, then masters then PHD (which seem to take him an age to get). That left him about 30 having never had a proper job. Seriously, unless you are an unadulterated genius many corporates won't touch you at that point. We stopped speaking as on the very rare occasion I saw him it was like going back in time 10 years except we were much older, he hadn't grown up at all in my eyes. He also went rabidly left wing which is quite understandable given his entire adult life had been on a university campus, that obviously put him at odds with my Dosbodian views.

I've heard this a lot about PHD types they finish up and there are not many takers for them which surprises them as they have probably had their egos boosted that they will get some epic job after getting their doctorate, when in reality a lot of the working world is not interested in them and would prefer a fresh 21 year old with just a first degree

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2 hours ago, eek said:

Two bits of news from elsewhere.

A large university (don't know the name) are about to announce a major redundancy program and that is a well funded place

Cambridge have said no face to face lectures or seminars next year - until at least September 2021.

😄Pretty much everyone will take a gap year. My son will be one of them if that's the case (he's not going to Cambridge). They should allow universities to open so the kids can enjoy themselves and socialise, they're in no personal danger after all, but any lecturers over 50 should work from home and call into the lecture theatre by video call. 

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2 hours ago, Talking Monkey said:

I've heard this a lot about PHD types they finish up and there are not many takers for them which surprises them as they have probably had their egos boosted that they will get some epic job after getting their doctorate, when in reality a lot of the working world is not interested in them and would prefer a fresh 21 year old with just a first degree

Not really a contest for a business owner. Take on a bright keen school/college leaver you can mould into your company or some 30 something year old phd know-it-all socialist who's never done a proper full days work in their life and who expects £50k out the gates. 

Lots of top companies are now poaching the best bright sparks straight out of school and putting them on proper apprenticeships. In the future it'll only be unemployable weirdos who go to uni, let alone spend decade or so there.

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1 hour ago, The Idiocrat said:

😄Pretty much everyone will take a gap year. My son will be one of them if that's the case (he's not going to Cambridge). They should allow universities to open so the kids can enjoy themselves and socialise, they're in no personal danger after all, but any lecturers over 50 should work from home and call into the lecture theatre by video call. 

Just been talking to a colleague. Her daughter is about to head off to university. Surely she will take a gap year said i. Oh, no, they are going to be taught online. This is from someone who teaches in academia. O.o

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3 hours ago, One percent said:

Just been talking to a colleague. Her daughter is about to head off to university. Surely she will take a gap year said i. Oh, no, they are going to be taught online. This is from someone who teaches in academia. O.o

Being taught on line is bollocks from a proper university. Part of the learning experience is meeting eccentric professors with non matching socks and egg on their tie.

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17 hours ago, Talking Monkey said:

A mate's brother did an undergrad, then a masters, then a research masters and now doing a PHD, some science/engineering type stuff. In his final year of undergrad he was looking to get on a grad scheme,  but then got on the postgrad train, thats 5 years of lost earnings. I also doubt the PHD will give him that much of a bump in starting salary

A PhD doesn't give you any increase in salary above someone with an MSc...if anything its less, as the MSc has three years additional `on the job` experience.

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8 hours ago, One percent said:

Just been talking to a colleague. Her daughter is about to head off to university. Surely she will take a gap year said i. Oh, no, they are going to be taught online. This is from someone who teaches in academia. O.o

What is the point of a gap year?

There won't be any jobs and they can't travel.

It really is shit for this age group. I don't know how they are managing to keep their shit together.

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Posted (edited)
22 minutes ago, Wight Flight said:

What is the point of a gap year?

There won't be any jobs and they can't travel.

It really is shit for this age group. I don't know how they are managing to keep their shit together.

The point of a gap year is to avoid 2020/21 for which Cambridge has announced, and it is presumably just the first to announce, that all lectures will be online.

That is a massively inferior offering for the same price as proper lectures so any 18 yo, or parent of same, with a bit of nous will look at the offer and say that they will wait one year for the course proper to be provided.

Even if all they are doing is chilling for a year that still beats sitting in your small student room by yourself watching three hours of online lectures every week day and calling it a university education.

I'm not simply being traditionalist here; as well as giving you a requirement to get up and shower lectures physically bring together the people doing the same course and options within that course so you form a peer group with whom you discuss your subject over coffee.

If you're spending your lecture time in your room you're not even going to meet the other people on your course as they don't arrange accommodation by subject.

I appreciate that your thrust was as to what they will do instead but doing literally nothing beats getting off to such a bad start for their first year of three.

Edited by Frank Hovis
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6 minutes ago, Frank Hovis said:

If you're spending your lecture time in your room you're not even going to meet the other people on your course as they don't arrange accommodation by subject.

Is that any worse than spending a year playing on your computer in your bedroom though?

It is a difficult decision. My lad isn't allowed a gap year so it is out of our hands.

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Posted (edited)

Here's my thoughts:

1. Overseas student numbers will drop massively as parents are now very protective of their offspring, and so are the ones who really make the decision.

2. UK student numbers will drop slightly as some will take a year off to see what happens/let the Covid19 `dust settle`.

3. Unis have been told by government they can increase their intake by 5% and keep same fees, so given 1 & 2 above there will be a `bun fight` for students and a drop in entrance grade requirements...ask yourself, if you normally would only get into a mid-tier university with your grades and then Oxbridge offers you a place paying the same fees what would you do?

4.Although actions on/from the Auger Review are temporarily on hold, the `writing is on the wall` and they will be actioned.

5. As business leaders, most VC`s and their SMT`s apart from their expertise in Eduspeak, have very little `real world` business acumen/experience, having just worked their way up the internal management ladder within Tertiary education. As a result when `things are good` their poor decisions can still equate to success (like property investment in a growing market), however their infrastructure investments have to be funded over a longer financial cycle, and they are about to find out that student numbers/income doesn't continually grow exponentially, the premise that their decisions have been based upon.

Here is a projection of the potential impact of the Coronavirus pandemic on student recruitment in UK universities...glad I am not a VC, although when the SHTF I am sure the impact of their poor decisions will be felt more by those they manage.

https://www.ucu.org.uk/article/10759/Universities-2.5bn-black-hole-will-cost-economy-6bn-and-60000-jobs-warns-report

Edited by MrXxxx
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2 minutes ago, Alex said:

I realise that things have changed in the intervening years but when I went to university it was 90% for the social experience (ahem) and 10% for the education, so if I were to pay for an online-only degree it had better cost no more than 10% of a real one.

Yes, this is the point missed by all these "digital leaders" and their followers or "digital numpties".

Online offerings are inferior. End of.

I watch at my local cinema (walking distance) several times a year live broadcasts of ballet from Covent Garden or plays from the West End.  They are good but nowhere near as good as actually being there and are priced accordingly; pretty much your 10% as in £8 Vs £80 (plus!) for a real ticket.

Deliver me a degree that costs £30k over three years online and I will value that at £3k because of it being vastly inferior.

The sheer brass neck of a Uni pumping it out online and still charging £30k is jaw dropping.

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