Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Universities and Brexit: A first-class mess

Posted by hkarner - 23. Juli 2016

Date: 21-07-2016
Source: The Economist

Academics fear a drying up of students, and money

Brexit leaves britain nakedMOST economists were against the idea of Britain leaving the European Union. But perhaps few felt so strongly about it as the economics lecturer at Cambridge University who, following the referendum on June 23rd, turned up to a faculty meeting unclothed with “Brexit leaves Britain naked” daubed across her torso. Although the form of protest was unusual, the feeling it expressed was not: in a poll conducted prior to the vote by Times Higher Education, a trade paper, nine in ten university staff said they would vote to Remain. At University College London (UCL), where one in ten students comes from the EU, the mood after the result was one of “deep shock, grief and then concern,” says Michael Arthur, the university’s president.

British universities are home to students from all corners: Europeans make up 6% of the total; another 14% come from the rest of the world. As a result of EU rules, the former are treated like home students, meaning that in England their fees are capped at £9,000 ($11,900) a year and they have access to state-provided loans. By contrast, there are no limits on fees for students from the rest of the world. A geography degree at Oxford, as taken by Theresa May, costs non-EU students £22,430 a year.

Jo Johnson, the universities minister, has confirmed that students from the EU starting their courses in September will continue to have access to government loans and capped fees. If, as expected, that remains true in 2017-18, there may even be a surge in the number of EU applicants as potential students rush to take advantage of the support while they still can, says Emran Mian, director of the Social Market Foundation, a think-tank.

But life will soon get trickier for universities. The big issue is whether EU students will continue to have access to loans, says Mr Mian. It may be politically difficult to justify offering them such support. It is an expensive policy: it is estimated that nearly three-quarters of students will never repay their loans in full, since outstanding debt is forgotten after 30 years. Withdrawing the loans from EU students, however, would risk a big drop in their number. Mr Arthur worries that it could cause a 50-75% fall in the number of EU students at UCL.

Others point out that under such a scenario universities probably would be free to charge higher fees to EU students, as they currently do for non-Europeans. That may help, says Richard Shaw, head of education at Grant Thornton, an accounting firm, but it seems unlikely that any increase in fees would be sufficient to make up for the fall in student numbers. Those numbers could drop further if foreign students are put off by the referendum result, which some have interpreted as a sign of hostility towards migrants in general.

Brexit comes at an awkward time for universities. Many have borrowed money to fund expansion, following the government’s decision in 2013 to lift the cap on the number of students that English universities were able to accept. Some might now find their new lecture halls less full than they had hoped. Raising funds will get harder, too: on June 29th Moody’s, a ratings agency, lowered the outlook of six of the seven universities it monitors; post-Brexit the EU’s European Investment Bank may also stop dealing with British institutions.

Support for academic research is another area of concern. EU funding follows research quality, meaning that Britain receives a hefty share of the kitty (63% more than it contributed, in 2007-13). It may be that Britain is able to negotiate continued access to European funding, perhaps in return for offering financial support to European students, speculates Mr Arthur. But it is unlikely to be able to continue to sway it in the direction of excellence rather than need. There are already reports that British academics have been asked to take their names off applications for funding, owing to uncertainty over whether they will remain eligible, and that some foreign academics are reluctant to take jobs in Britain.

Most countries do all they can to lure students from around the world, including seeking to attract the best lecturers. That is sensible: some students stick around, boosting the economy; others return home with fond memories of the country where they spent their early adulthood. All of them pay for the privilege. Immigration restrictions on non-EU students have already done considerable harm to higher education. It is likely that British universities will suffer once again.

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