What Happens to Students if a University Goes BUST?

university goes bust

The concept that a university goes bust is becoming more of a real and likely prospect day by day in the UK. I write this blog post today in light of multiple news articles that have hit the shelves claiming that at least three universities are on the verge of bankruptcy. Fortunately, the university that I work at is not based in the North of England or on the South Coast as the three universities in question appear to be, so I suspect said articles are not referring to my place of work. Nonetheless, it appears from where I sit that many universities are in a bad place financially. So bad, that I predict the number of universities in the UK will be somewhat less in the next decade than it has been in this one.

Why are universities at risk of going bust?

There are a number of variables that have led to the prospect that a university goes bust. From a person who works at grass-roots level (and has no access to financial account information etc), I have narrowed these down three main issues:

1- The Government have taken away funding

With each change in Government we seem to have changes to our Higher Education structure and operations. When I started my degree in 2005 the fees were just over £1000 and I qualified for a grant (along with many others), so I didn’t have to pay anything. In a few short years, fees had been increased over £9000 and grants had bursaries had diminished significantly. When I was a student, the Government were pushing to make all of the old Polytechnic Colleges full Universities, now there are claims that we don’t have enough vocational educational provision at this level. Nowadays, attending university is a ‘right of passage’ as much as it is an educational journey.

Over the years a number of different funding streams have been cut, causing universities to raise student fees in attempt to stay afloat. Most recently, cuts to funding for nursing degrees has had a devastating impact at universities who specialise in this area, such as mine. For some, this could contribute to cases in which a university goes bust.

2- There are too many ‘worthless’ degrees

It seems anybody can go to university nowadays. It also seems anybody can teach at a university. Low calibre students and (some) Lecturers have contributed to the dilution of the value of a degree. Then there is the degree itself. Whilst I absolutely advocate doing a degree in the likes of tourism management or aviation management, the outcomes of this need to be that students gain employment at the graduate level to make it worthwhile. Cabin Crew, Check-In Staff, Holiday Reps and Travel Agents are jobs that people could obtain without creating the financial burden on the individual and the economy that a degree entails. 

3- There is too much competition

For me, the major problem arose when the Government removed the student number control cap. Before 2015, each HE institution was allocated a number of students that they were allowed to recruit. If they exceeded this there would be hefty fines. Since this cap was removed, the doors for business have become wide open, with a number of new and existing providers.

The top universities are now taking more students. The mid-tier universities are losing students who would previously have studied with them to the top institutions. In response they have been offering financial incentives, unconditional offers and lowering their entry requirements. FE colleges have started up a wide range of new courses, retaining students who would previously have attended low tier universities. This has left many of the institutions at the bottom of the league tables at risk of being ‘the university which goes bust’.

Which universities are at risk of going bust?

university goes bust

Which universities are likely to go bust really is the million Dollar question. In short, it is the majority of the bottom tier universities. The UCU have put some useful information together about which universities these might be.

Universities do not want any information about their poor finances to get out, because this will inevitably put students off. And less students simply secures this dystopian future…. So if you Google a specific university to find out more about its financial prospects, the likelihood is that you won’t find much. There are some tell-tale signs though to look out for when there is a high chance that in the near future the university goes bust. Here are some things to consider-

-have they been recruiting staff lately?

-have they restructured their staff/departments?

-have there been staff redundancies?

-have they cut courses?

-have they all of a sudden introduced lots of new courses (in attempt to attract new business)?

-have they sold off some of their property?

-have student services been cut (e.g. funded enrichment activities, careers services)?

-have the student numbers dropped?

Does this sound like your university? Read more about the tell-take signs that a university might go bust here [coming soon]. 

What happens to students if a university goes bust?

I really think that the question ‘what happens to students if a university goes bust?’ is the elephant in the room. Why? Because nobody really knows! What has been made clear is that the Government will not bail out any struggling university, so if the university goes bust, it goes bust.

If a university goes bust it could leave thousands of students high and dry. Quite frankly, there are probably an awful lot of students who are already worrying about such an eventuality, because lets face it- the day will come when a university goes bust. There is too much competition and those universities with spots low down in the league tables are simply not making the cut.

In all likelihood, the chances are that if a university goes bust it will be partnered with another institution who will take on the current students for the remainder of their degree. How exactly this would work, however, it the unknown. Why would a thriving university take on students with far lower entrance qualifications than their own students? This would only cause difficulties from a teaching and management perspective. There is also the discussion of locality, taking ethics of forcing students to relocate into consideration.

It is without a doubt an unnerving time for students who are worrying about what would happen if their university goes bust. Unfortunately, there is little reassurance to be provided at this stage. There are, of course, also the wider implications of what happens to all of the staff employed at that university and its’ associated partners etc. I personally find this a very worrisome time both for those working in the industry and for students.

Do you have any more insight into what happens if a university goes bust? Please leave your comments below!