The University of Tasmania (UTAS) is set to cut 13 full-time staff as it proposes a massive shake-up of its humanities, social sciences, creative arts, and media schools amid declining student enrolments.
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Western Sydney University (WSU) will send some of its students to intern at a Sydney-based tech company amid continued calls for universities to partner with industry to produce better quality graduates.
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For the third year in a row, the English higher education sector’s collective financial performance is in decline.
That is the conclusion of the latest annual assessment of the sector’s financial sustainability from the Office for Students (OfS), based on finance returns for 2023-24.
Overall, after stiff warnings this time last year about the risks of system-wide provider deficits if projected student number growth failed to materialise, OfS says that many providers are taking steps to manage their finances, by reducing costs and downgrading recruitment growth projections. It remains unlikely, says OfS, that a large provider will become insolvent in the coming financial year.
But 43 per cent of providers are forecasting a deficit for the current financial year 2024–25, and there is an overall decline in overall surplus and liquidity – albeit with the expectation of growth in the years ahead. While larger teaching-intensive and medium sized providers were more likely to report a deficit, there is also quite a lot of variation between providers in different groups – meaning that institution type is not a reliable guide to financial circumstances.
Student recruitment is the most material driver of financial pressure, specifically, a home and international student market that appears insufficient to fill the number of places institutions aspire to offer. The broad trend of institutions forecasting student number growth in hopes of offsetting rising costs – including national insurance and pension contributions – makes it unlikely that all will achieve their ambitions. There’s evidence that the sector has scaled back its expectations, with aggregate forecast growth until 2027–28 lower than previous forecasts. But OfS warns that the aggregate estimate of an increase of 26 per cent in UK entrants and 19.5 per cent in non-UK entrants between 2023–24 and 2027–28 remains too optimistic.
Questioned further on this phenomenon, OfS Director of Regulation Philippa Pickford noted that there is significant variation in forecasts between different providers, and that given the wider volatility in student recruitment it can be really quite difficult to project future numbers. The important thing, she stressed, is that providers plan for a range of possible scenarios, and have a mitigation plan in place if projections are not achieved. She added that OfS is considering whether it might give more information to providers upfront about the range of scenarios it expects to see evidence of having been considered.
While the focus of the financial sustainability is always going to be on the institutional failure scenario, arguably an equally significant concern is the accumulation of underlying structural weaknesses caused by year-on-year financial pressures. OfS identifies risks around deferral of estates maintenance, suspension of planned physical or digital infrastructure investments, and a significant increase in subcontractual (franchising) arrangements that require robust governance.
All this is manifesting in some low-key emergency finance measures such as relying on lending to support operating cashflow where there is low liquidity at points in the year, selling assets, renegotiation of terms of covenants with lenders, or seeking injections of cash from donors, benefactors or principal shareholders. Generally, and understandably, the finance lending terms available to the sector are much more limited than they have been in the past and the cost of borrowing has risen. The general increases in uncertainty are manifest in the increased work auditors are doing to be able to confirm that institutions remain a “going concern.” Such measures can address short-term financial challenges but in most cases they are not a viable long term strategy for sustainability.
OfS reiterates the message that providers are obligated to be financially sustainable while delivering a high quality student learning experience and following through on all commitments made to students – but it’s clear that frontline services are in the frame for cuts and/or that there is a limit to the ability to reduce day-to-day spending or close courses even when they are loss-making if there is likely to be an impact on institutional mission and reputation. Discussions between OfS and directors of finance point to a range of wider challenges around increased need for student support, the difficulty of recruiting and retaining staff, the increasing costs of conducting research, and shifts in the student accommodation rental market. Some even pointed to the cost of investment in AI-detection software.
The bigger picture points to long term (albeit unpredictable) shifts in the underlying financial model for HE. Philippa Pickford’s view is that institutions may need to shift from taking a short-term view of financial risks to a longer-term horizon, and will need to grapple with what a sustainable long term future for the institution looks like if the market looks different from what they have been used to. Deferral of capital investment, for example, may keep things going for a year or two but it can’t be put off indefinitely. There’s a hint in the report that some institutions may need to invest in greater skills, expertise and capacity to understand and navigate this complicated financial territory – and OfS is taking an increased interest in multi-year trends in financial performance, estates data and capital investment horizons in its discussions with providers.
The situation remains, however, that OfS is primarily empowered to monitor, discuss, convene and, if necessary, issue directives relating to student protection. Activity of this nature has ramped up considerably in the past year, but financial sustainability remains, at base, individual providers’ responsibility – and system-level intervention on things like changing patterns of provision, or management of the wider impact of institutional insolvency, nobody in particular’s. Government is, of course, aware of the problem but has not yet given a steer on whether its upcoming HE reform measures, expected to be published in the summer after the spending review, will grasp the nettle in delivering the support for transformation the sector hopes to see.
OfS has now said that it is talking to government to put forward the view that there should be a special administration regime for higher education. This signals that while the immediate risks of institutional closure or “disorderly market exit” are low, the pressures on a small number of institutions remain considerable. On the assumption of little or very modest changes in the funding model in the upcoming spending review, and ongoing competitive pressures, there will almost inevitably be losers.
For more than seven years, we have been waiting to obtain information
from the US Department of Defense (DOD) about schools that prey upon servicemembers using DOD Tuition Assistance to further their college aspirations. And we have done it at our peril, repeatedly taking flak from people in DC.
As the Higher Education Inquirer reported earlier,
DOD and these schools have had questionable relationships with these
schools going back to the 1980s, with the for-profit college takeover of CCME, the Council of College and Military Educators.
Those who follow the higher education business know the names of the bad actors, some that are still in business (like the University of Phoenix and Colorado Tech) and some that have closed (like ITT Tech and the Art Institutes). Others have morphed into arms of state universities (Kaplan University becoming Purdue University Global and Ashford University becoming University of Arizona Global).
Accountability was supposed to happen during the Obama administration (with Executive Order 13607) but those rules were not fully implemented. Under the first Trump administration, these safeguards were largely ignored, and bad actor schools faced no penalties.
Some of these scandals were reported in the
media, and have been forgotten.
On April 1, 2025 we were again supposed to receive information about these bad actor schools, and the DOD officials who were complicit. It didn’t happen. That FOIA (22-1203) which was initiated in July 2022 is now scheduled for a reply on July 3, 2025, three years from the original submission.
Previous FOIAs from 2019 also came up with no information. And requests for information in 2017 from DOD officials were met with harassment from other parties.
The only thing we can be grateful for is that DOD continues to communicate with us.
Related links:
Trump’s DOD Failed to Protect Servicemembers from Bad Actor Colleges, But We Demand More Evidence
DoD review: 0% of schools following TA rules (Military Times, 2018)
HEI continues to generate a strong international audience. While a substantial portion of our viewers are from the US, we have people (and bots) from across the globe reading our articles and Youtube posts. Our coverage lately, on the revocation of student visas, and of deportations, is particularly important for international students, particularly those who are concerned about US intervention in the Middle East, Asia, and Latin America. For some unknown reasons, we have little traffic from folks in African countries or Latin America countries (other than Mexico). We also have fewer than expected numbers from Canada and India. If there is anything we can do to increase those viewership numbers, please let us know.
On March 6, 2025, Apollo and Vistria publicly announced a possible IPO or sale of the University of Phoenix. These companies have been trying to sell the University of Phoenix since 2021, but there have been no takers. The owners claim the school is worth $1.5M to $1.7M, but we (and experts we know) are skeptical, given the financials we have seen so far. The University of Phoenix was previously on sale for about $500M-$700M but the University of Arkansas System, the State of Idaho, and apparently other colleges declined the offers.
The University of Phoenix offers subprime education to folks,
historically targeting servicemembers, veterans, and people of color. While some students may profit from these robocollege credentials, one wonders what
these workers actually learn. The current student-teacher ratio at the
University of Phoenix, according to the US Department of Education, is
132 to 1.
In 2023 we made a Freedom of Action (FOIA) request to the US Department of Education (ED) to get Phoenix’s most recent audited financials. In March 2025, more than 20 months later, we were provided with a 35-page report, audited by Deloitte, with numbers from 2021 and 2022.
This month the Higher Education Inquirer followed up with a Freedom of Information request with the ED to obtain more up-to-date financial numbers for the University of Phoenix. We hope they will be responsive and timely enough to get the word out to the public.
In May 2022, The Higher Education Inquirer began investigating Ambow Education after we received credible tips about the company as a bad actor in US higher education, particularly with its failure to adequately maintain and operate Bay State College in Boston. The Massachusetts Attorney General had already stepped in and fined the school in 2020 for misleading students.
As HEI dug deeper, we found that Ambow failed years before under questionable circumstances. And we worked with a number of news outlets and staffers in the offices of Senator Elizabeth Warren and Representative Ayanna Pressley to get justice for the students at Bay State College.
Since that 2022 story we continued to investigate Ambow Education, its CEO Jin Huang, and Ambow’s opaque business practices. Not only were we concerned about the company’s finances, we were wary of any undue influence the People’s Republic of China (PRC) had on Ambow, which the company had previously acknowledged in SEC documents.
A Chinese proverb says it’s easier to fish in murky waters. And that’s what it seemed like for us to investigate Ambow, a company that used the murky waters in American business as well as anyone. But not everything can remain hidden to US authorities, even if the company was based out of the Cayman Islands, with a corporate headquarters in Beijing.
In November 2022, Ambow sold all of its assets in the People’s Republic of China, and in August 2023 Bay State College closed abruptly. We reported some strange behaviors in the markets to the Securities and Exchange Commission, but they had nothing to tell us. Ambow moved its headquarters to a small rental space in Cupertino, where it still operates.
In 2024, Ambow began spinning its yarns about a new learning platform, HybriU, using Norm Algood of Synergis Education as its huckster. HybriU presented at the Computer Electronics Show in Las Vegas and at the ASU-GSV conference in San Diego and used those appearances as signs of legitimacy. It later reported a $1.3 million contract with a small company out of Singapore.
In 2025, Ambow remains alive but with fewer assets and only the promise of doing something of value. Its remaining US college, the New School of Architecture and Design, has had problems paying its bills, and there are at least two cases in San Diego Superior Court pending (for failure to pay rent and failing to pay the school’s former President). However, Ambow has been given a clean bill of health by its regional accreditor, WSCUC.
A report by Argus Research, which Ambow commissioned, also described Ambow in a generally positive light, despite the fact that Ambow was only spending $100,000 per quarter on Research and Development. That report notes that Prouden, a small accounting firm based in the People’s Republic of China is just seeing Ambow Education’s books for the first time. In April 2025 we wonder if we’ll get adequate information when Ambow reports its 2024 annual earnings, or whether we find just another layer of sludge.
