The decline of our once-great universities is nothing to celebrate

Telegraph

27-07-2025

Thirty years ago this summer, I was making a decision. Go to university to study politics, or accept a job selling computers at the then-princely salary of £13,000? For a boy from the Northumbrian countryside with a healthy fear of debt, it wasn't a simple choice.
I chose university, because I guessed it was a better path to my long-term goals. And, to be honest, because I preferred reading books and sleeping late to plunging straight into the 9-to-5.
Would I make the same choice today? In the decades since my decision, for a large number of school-leavers the answer is and has been Yes. Even though Higher Education (HE) is now both more expensive and less enjoyable than when I became a student, the pull of 'uni' is strong. Fees and debt; limited teaching by demoralised lecturers; worries about mental health – none has reduced the annual flow towards higher education. More than 40 per cent of 18-year-olds apply to university.
Will that flow of students – and therefore money – continue over the next few decades? Britain is gambling a lot on the assumption that school-leavers will remain keen to spend their time and money on a three-year undergraduate degree. If that proves incorrect – and there are growing reasons to suspect it will – the consequences will be felt beyond our struggling universities.
The latest official forecast is that 40 per cent of universities will run financial deficits this year. Talk of collapse and merger is commonplace. This has a simple cause: money out exceeds money in. It costs more to teach a British student for a year than that student pays in tuition fees. A £9,250 annual fee can feel huge to students and parents, but it's been frozen since 2017 so its real value has fallen by a third. Meanwhile, costs have risen. Science degrees can cost more than £11,000 a year to teach.
For years, universities bridged this gap with foreign students, who can and will pay much higher fees. They now account for more than half of tuition income at many Russell Group universities.
This was never a resilient business model and it recently collided with political reality. Labour, under pressure from Reform, has restricted visa rules for foreign graduates and plans a levy on universities' international fee income. Applications are already falling from countries such as Nigeria, and vice-chancellors are eyeing the big earners India and China nervously.
The pros and cons of international students have been debated endlessly elsewhere, so I'll leave that to others. My interest here is in the bigger question of how many people will go to UK universities in the years ahead. For we have inadvertently built an HE system reliant on high and growing numbers of young students; without those numbers, there is trouble ahead.
The UK is nearing the end of a demographic upswing in university applications – we had a small post-millennium baby-boom that peaked around 2012. But what happens after that wave peaks at the end of this decade? Even gloomy official forecasts for the future of the HE sector imply that student numbers will go on rising, powered by an apparently unshakeable appetite for the university experience among the young.
HE policy sometimes feels like it is based on the idea that the next 30 years will look a lot like the last 30. The Government's Office for Students and the independent Institute for Fiscal Studies both see rising domestic and international enrolments as essential to keeping the system solvent into the 2030s. The admissions service Ucas confidently expects continued growth in applicants.
It wouldn't take much deviation from the optimistic model to deliver disaster. A five per cent fall in 18-year-old applications or a 15 per cent drop in international recruitment could push dozens of universities into a full-blown crisis. Both are perfectly plausible, and not in the distant future. These icebergs could hit in the next parliament.
Here, some readers might shrug: too many graduates, too many universities, too woke. But losing universities would have grave economic effects both local and national. These are major employers, export-earners and generators of high-productivity workers, engines of R&D and incubators of start-ups. The UK economy isn't so strong that we can afford to throw away a strategically important sector for cultural reasons.
But readers cynical of the value of a modern degree do have a point, which is why our national bet on future 18-year-olds' behaviour is risky. For decades, graduates enjoyed a solid and persistent 'wage premium' over other workers but it is waning. In 2000, the typical graduate earned twice as much as a worker on the minimum wage. Now, the difference is barely 30 per cent.
The gap later in life is narrowing too. And all that is before we know the full impact of AI on the job market. After all, 18-year-olds don't just go to uni for fun. They want graduate jobs and careers. So what happens if those jobs start to disappear?
From finance to technology, firms that were big recruiters of graduates are cutting back, partly because a smart machine is quicker and cheaper than a smart 23-year-old. Many say demonstrable skills are more important than the generic credential of a degree. Adzuna, a job site, reckons graduate recruitment ads are down around a third since 2022.
Can HE avoid the icebergs ahead? Only if it can change to fix a national failure that is scarcely discussed by politicians who prefer shallow cultural rows about universities.
This failure is the collapse in adult learner numbers. Between 2010 and 2019, mature student numbers fell 22 per cent. Universities that used to educate people of all ages have been pushed by funding policies to become finishing schools for under-25s. That makes no sense in a time of 100-year lifespans and 60-year careers.
Two of the biggest forces of this era are demographics – fewer young people, more old ones – and AI. Britain's university sector is not responding to either of them. Instead of betting the house on teenagers, institutions should be incentivised to become centres of lifelong learning: flexible, modular and open to people at every stage of their career.
I'm glad I chose university 30 years ago: you wouldn't be reading this if I hadn't. Now, approaching 50 with maybe 20 years of work ahead of me, I hope I get another chance to make that choice.