A majority of Victorian universities posted operating losses in 2024 but continued to boost the salaries of their vice-chancellors, annual reports reveal.
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Tag: Financial
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OfS continues to sound the alarm on the financial sustainability of English higher education
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.
Recruitment woes
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.
Storing up trouble
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 future is murky
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.
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Columbia Lays Off 180 Amid “Intense” Financial Strain
Columbia University is laying off 180 researchers after the Trump administration cut the university’s research funding by more than $650 million.
“Columbia’s leadership continues discussions with the federal government in support of resuming activity on these research awards and additional other awards that have remained active, but unpaid,” university leadership wrote in a memo Tuesday morning. “We are working on and planning for every eventuality, but the strain in the meantime, financially and on our research mission, is intense.”
While federal agencies such as the National Institutes of Health, the National Science Foundation and the Department of Energy have cut research funding at universities across the country, the Trump administration has specifically targeted a handful of high-profile universities, including Columbia, for allegedly failing to curb antisemitism on campus.
Columbia is taking a two-pronged approach to navigating the sudden deep cuts to federal research funding. The first focuses on “continued efforts to restore our partnerships with government agencies that support critical research,” and the university said the second prong is about taking “action to adjust—and in some cases reduce—expenditures based on current financial realities.”
Despite Columbia’s previous president acquiescing to Trump’s demands to enact numerous policy changes to address alleged unchecked antisemitism if it wanted its funding back, the university is still negotiating to recover it. In the meantime, the layoffs announced Tuesday represent about 20 percent of researchers who are funded “in some manner by the terminated grants,” according the statement signed by Claire Shipman, Columbia’s acting president; Angela V. Olinto, provost; Anne Sullivan, executive vice president for finance; and Jeannette Wing, executive vice president for research.
And the layoffs this week likely aren’t the end of the financial repercussions of the cuts to Columbia’s federal research funding.
“In the coming weeks and months, we will need to continue to take actions that preserve our financial flexibility and allow us to invest in areas that drive us forward,” the statement said. “This is a deeply challenging time across all higher education, and we are attempting to navigate through tremendous ambiguity with precision, which will be imperfect at times.”
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Ireland’s ELE sector slams sharp rise in financial threshold
The national body representing over 60 accredited English language schools has warned the move could lead to mass cancellations, reputational damage to Ireland, and loss of key emerging markets that have helped rebuild the sector post-pandemic.
Starting from 30 June 2025, students from countries such as Argentina, Brazil, and Mexico will be asked to show €6,665 in available funds to study in Ireland for eight months – a 120% increase on the 2023 threshold of €3,000.
“This change has come without consultation, justification, or notice. It is difficult to see how a 120% increase in two years can be considered proportionate when the cost of living has risen just 2% annually,” said Lorcan O’Connor Lloyd, CEO of EEI.
The affected students are legally permitted to work part-time in Ireland, yet are now being required to show financial backing as if they were not, argued O’Connor Lloyd, who said the policy “undermines the entire work-study visa model that Ireland has in place”.
It is difficult to see how a 120% increase in two years can be considered proportionate when the cost of living has risen just 2% annually
Lorcan O’Connor Lloyd, English Education IrelandStakeholders have also raised concerns around the short period of notice of just over 90 days, which means that students who have already paid, booked flights, and made arrangements will be forced to find an extra €2,000 or risk losing their place.
EEI is therefore calling for an immediate pause and review of the policy, a transition period to protect students who have already booked, and a full consultation with the education sector moving forward.
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How colleges can improve financial transparency in fee payments
Effective higher education fee management maximizes revenue, reduces losses, and builds confidence with students and parents. However, 65% of institutions lose money owing to obsolete, manual processes (EDUFinance 2024). This is where student fees collection software shines.
Let’s look at 10 data-driven strategies to improve student fee collection software for transparency and efficiency.
Why Modern Student Fees Collection Software Matters
Did you know 37% of college finance teams track fees using spreadsheets, which can lead to errors and miscalculations (Campus Finance Survey, 2024)? Student finance cloud technologies automate complex operations, reduce manual errors, and offer a transparent, real-time financial environment.
How colleges can improve financial transparency in fee payments? 10 proven ways.
1. One seamless student registration and data sync
Create comprehensive student profiles automatically matched with student information systems (SIS) including demographic data, course information, and financial details. Institutions running linked data systems report 23% faster fee processing.
2. Clearly structured fees
Fee breakdowns cause 48% of parents to argue (EdTech Insights, 2023). Flexible fees per department, course, or service offer upfront transparency and easier payments.
3. Channel-wide fee collection automation
Students prefer mobile payments 72% (Higher Ed Payment Trends, 2024). Make websites, mobile apps, and self-service portals accept rapid payments. Automated schools collected fees 27% faster and missed 15% fewer.
4. Fine automation, absenteeism tracking
Establish absenteeism and late payment penalties. Automation has reduced fee defaulters by 19% and ensures regular sanctions without manual follow-up.
5. Role-based security to protect finances
Role-based access control is non-negotiable even if 63% of higher education institutions report financial intrusions (EduCyberReport, 2024). Minimizing fraud and mistakes, only authorised staff should handle fee data.
6. Parent portals for real-time fee visibility
Parents demand more financial participation in their children’s education (82%, ParentPulse Survey, 2024). Parents receive transparent information regarding dues, invoices, and payment schedules via a portal, decreasing late payments.
7. Automatic fee calculations for billing free of errors
Errors in manual fee computation affect institutions’ annual income up to 4%. Calculate fees automatically using pre-defined criteria to guarantee correct, current billing for every student.
8. Waivers, fee concessions, and flexible payment options
Offer waivers, discounts, and flexible payment arrangements without any confusion on the back end. Supporting financially challenged students with structured payment plans resulted in 12% higher retention rates for colleges that have implemented this approach.
9. Automatic fee reminders for on-time payments
According to EduFinance Insights (2024), overlooked reminders account for 43% of late payments. Send automated fee reminders via email, SMS, and push notifications to significantly reduce the number of late payments.
10. Real time financial transparency reports
Access transaction history, income breakdowns, and outstanding amounts instantly. Real-time reporting improved financial forecasting and reconciliation for 89% of finance directors.
The Bottom Line: Future-Proof Your Fee Management with Creatrix Campus
Why let outdated processes drain your institution’s revenue? With Creatrix Campus Fee Management Software, higher education institutions can achieve:
- Faster fee collection with automation and mobile payments
- Enhanced financial transparency for students, parents, and administrators
- Stronger security with role-based access and encrypted data
- Real-time insights for smarter, data-driven financial decisions
Ready to transform your fee collection process? Let Creatrix Campus help you boost efficiency, ensure transparency, and future-proof your institution’s financial operations.
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How colleges can improve financial efficiency with accounting software
Today’s higher education requires financial efficiency. Outdated accounting processes cause financial inefficiencies in 73% of higher education institutions, according to a 2024 EDUCAUSE analysis. Right software can fix that. Here are 7 benefits of utilizing the best college accounting software, backed by numbers, automation, and improved decision-making.
Why College Accounting Systems Need Improvement
College economics are more complicated than ever due to shifting enrollments, diversified revenue streams, and escalating operational expenditures. Reports confirm that up to 30% of administrative time is wasted on manual accounting, resulting in errors, lost income, and lost productivity. Automation for college accounting is no longer optional—it’s game-changing.
How Colleges Can Improve Financial Efficiency with Accounting Software. 7 Advantages
1. Usability—simplify complex financial processes
Do you know 43% of institutions prioritize user-friendliness when purchasing accounting software? The finest solutions enable non-financial workers to manage accounts using intuitive dashboards, drag-and-drop features, and automated reporting.
2. Flexibility and scalability—grow without financial limits
Many institutions have 12% yearly enrollment fluctuations, making scalability important. The ideal software expands with your organization as you add programs and revenue streams. Cloud-based upgrades minimize downtime, ensuring operations.
3. Custom reporting – faster data-driven decision making
Real-time reporting, according to 67% of officials in higher education, greatly enhances financial decision-making. Imagine being able to instantly have thorough knowledge on grant distributions, operating expenses, and tuition rates, therefore enabling leadership to act on facts rather than speculation.
4. Reliability – Bid farewell to mistakes and lost data.
Errors in manual accounting can cost organizations up to 5% of their yearly budget, an intolerable loss. Reliable accounting systems guarantee accurate, real-time tracking of payments, debts, and financial projections. For better processes, it also easily interacts with other campus administration systems.
5. Automate and synchronize data to reduce administrative tasks
Accounting automation reduced administrative tasks by 40%. Colleges can distribute resources faster, speed up approvals, and eliminate human error-related income leakage with synchronized data across admissions and payroll systems.
6. Security – Guard private financial information
Given 63% of higher education institutions having attacked recently, financial security is not negotiable. Modern accounting systems guarantee that your financial documents are untouchable by illegal hands by means of role-based access, encrypted data storage, and automatic backups.
7. Efficiency — Save time, cut costs, increase revenue
Saving time makes money. Academic institutions with accounting automation collect fees 25% faster and spend 18% less. Monitoring finances on the go using mobile and cloud capabilities reduces overhead and improves transparency and cash flow.
The Bottom Line
Choice of college accounting software is about developing a smarter, faster, and more robust financial ecosystem, not just convenience. The appropriate software helps universities maximize financial efficiency and future-proof operations through automation, real-time analytics, and cost reductions.
Has your college been trapped in outmoded accounting? We must embrace intelligent automation-powered financial efficiency. Contact team Creatrix Campus today!
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Financial sustainability in UK higher education: the limits of self-help?
- Matthew Howling, Principal Associate at Mills & Reeve LLP, and Poppy Short, Partner at Mills & Reeve, reflect on a February round table discussion amongst university leaders chaired by Nick Hillman of HEPI.
On 26 February 2025, a group of 18 university leaders, advisors and stakeholders met to reflect on how universities can best position themselves in the current financial climate. The meeting was a follow-up to our joint dinner with HEPI on 10 October 2024 at the Royal Society in London. As we remarked at the time, there was a clear desire to continue the conversation, and the fast-paced and content-rich discussion here was a testament to that desire.
Our theme was the limits of self-help. Given the current financial headwinds, institutions have been restructuring their activities on an unprecedented scale. However, once the severance schemes, asset sales and course closures have come to pass, will these remedies be sufficient to put institutions back on a sound enough financial footing to continue to serve their students and communities for the longer term? The unspoken and yet resounding understanding across the group was that further and more radical changes are needed across the sector to stabilise the situation.
What is the role of the private providers in helping to improve the financial health of the sector? Several voices suggested that foreign investment could help to save certain British universities and that the sector needs to be less reticent about such investment. Other participants thought that, while foreign investment might work in the context of smaller providers, it was less likely to be successful when dealing with larger, more complex institutions, particularly those that have a legacy of contracts with trade unions and other stakeholders. It is well known that a number of private providers and foreign investors are waiting in the wings to acquire UK degree-awarding powers from distressed higher education providers if the opportunity presents itself. The sector should be prepared to consider its response to this.
In a recent HEPI poll, when students were presented with a list of 10 options for what could happen if their own higher education institution were to fall over financially, a takeover by a foreign company was the joint least popular option. Foreign investors would have to work hard to tackle these negative perceptions.
In some ways, the antithesis of self-help is a forced merger. It was noted that, in other jurisdictions, forced mergers are not as uncommon as might be thought. Estonia, France, Germany and Denmark had all experienced forced university mergers. Is this the direction of travel for the United Kingdom? There was a feeling that, in Wales and Scotland, there was a willingness to consider higher education provision on a more holistic basis than in England.
In terms of state support, it was felt that the sector had to acknowledge government spending pressures. The evidence of cuts to budgets elsewhere (such as foreign aid) strongly suggests that there will be no chance of further increases to the home undergraduate tuition fee in the foreseeable future and despite the need, other forms of financial help are not expected.
If government funding will not be forthcoming, the other obvious source of funds is existing lenders. Participants observed that, while sector borrowing was high, much of the recent debt taken on by providers was in the form of revolving credit facilities (which provide short-term funds up to a specified limit for a stipulated period of time, all or part of which can be repaid and re-borrowed as required), rather than the term loans that universities have traditionally found more attractive (which provide long-term funds for a specified period of time). There was concern that, in some cases, banks might be considering withdrawing those lines of credit when they come up for renewal. There was also a concern about how many institutions might be relying on revolving credit facilities to satisfy the OfS’s minimum liquidity requirements. There was anecdotal evidence that certain banks were focussing their new lending on higher tariff institutions, partly because of credit risk but also because of the ancillary opportunities to make money from larger institutions. This risks a self-fulfilling cycle of winners and losers.
It was generally felt that a new Special Administration Regime would make life easier as opposed to harder in terms of access to funds. It is not necessarily about encouraging enforcement by banks. It is highly unlikely that a UK clearing bank would want the adverse publicity associated with enforcing against a UK university (although foreign lenders may be less PR squeamish). However, giving lenders a clear line of sight as to a recovery process, even if not used in practice, may further encourage commercial lending to the sector.
Beyond the question of more money, there was a feeling that certain sector skills were lacking to navigate these troubled waters. As one participant put it, transformation expertise was what was needed, not just transformation funds. And how does all this transformation happen at pace?
Above all, there was a sense that the sector needed to move as one on certain key issues. One example was the increased costs for post-92 institutions associated with the Teachers’ Pension Scheme. Another key area where the sector needs to work together is soliciting the opinion of the Competition and Markets Authority (CMA) on how universities can collaborate without breaching competition law. There were grounds for optimism: the CMA guidance on applying the competition rules to sustainability agreements and collaborations is an example of the CMA taking a proactive approach to assuage concerns that competition law should not hinder legitimate collaboration where this was in the public good. In other areas, such as procurement and shared services, it was felt that there was much that the sector could be doing together to be more efficient and reduce the cost of delivery.
As an hour of rapid and informed discussion drew to a close, perhaps the overall conclusion was that it is only by acting collectively that the sector can arrive at solutions to allow institutions to truly put their houses in order at an individual level. Universities need to start planning how they will support themselves through this next phase. To survive they will need to mobilise themselves to work at pace to foster local and regional connections to drive forward the priorities for their regions.
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Mental Health and Financial Barriers Threaten College Student Success (TimelyCare)
Seven in 10 students have considered taking a break or dropping out.
FORT WORTH, Texas, March 12, 2025
/PRNewswire/ — Mental health struggles and financial pressures are
jeopardizing college students’ ability to complete their education,
according to a new study by TimelyCare, higher education’s most trusted virtual health and well-being provider,“Many students are slipping through the cracks due to unmet financial, academic, and emotional needs.”
The
survey, which gathered responses from 740 students attending two- and
four-year colleges across the U.S., exposes significant barriers to
student success and calls for specific action by educational
institutions to address pressing concerns.Key Findings:
Students at Risk of Stopping – More than half (53%) of current
college and university students said they had considered taking a break
from school, and 17% considered dropping out and not returning.Financial Strain – Nearly one-third (31%) of respondents cited
financial strain as a primary reason for considering withdrawal.
Additionally, a significant portion of students reported relying on a
combination of financial aid, scholarships, and part-time or full-time
work to cover costs.Success Barriers – An overwhelming 95% identified at least one
obstacle impacting their success. Mental health (53%) and finances
(49%) were the top challenges, followed by physical health (33%),
academics (28%) and social belonging (26%).Gaps in Support Access – While 90% of students had used at
least one school-provided resource such as academic advising, tutoring,
or mental health counseling, issues like lack of awareness, inconvenient
office hours, and inaccessible locations kept many from getting the
needed help.Success Defined
Students identified GPA, gaining knowledge,
and graduating or completing their coursework as their top measures of
success in line with a 2024 survey. Interestingly, non-traditional students placed graduating and gaining knowledge above GPA.“This study makes it crystal clear that many students are slipping
through the cracks due to unmet financial, academic, and emotional
needs,” said Nicole Guerrero Trevino,
PhD, Vice President for Student Success, TimelyCare. “Our institutions
must rise to the occasion to ensure no student is left behind.”What Can Be Done?
In an open-ended question, students identified several ways institutions can better support their success, including:Promoting Awareness of Resources: Students called for more
accessible and transparent communication about resources like tutoring,
counseling, and career services.
“Make a comprehensive list of all resources in one place.”
“Talk about these services more openly. I didn’t know they existed when I needed them.”Tailoring Support for Non-Traditional and First-Generation Students: Develop
targeted programs and policies, such as childcare options and
evening/online classes, to support students balancing multiple roles.
“Offer different hours for people who work full time during regular work hours.”Engaging Faculty and Staff: Train educators and advisors to proactively identify struggling students and provide personalized support.
“Make
it feel more normal that all students are impacted in some way and
encourage all students to look into getting the help they need. It still
feels almost taboo to seek out help in most situations.”Expanding Mental Health and Financial Well-Being Resources: Increase
counseling availability, destigmatize mental health challenges, and
offer virtual and flexible options for access. Streamline communication
about scholarships, grants, and emergency funding while providing robust
financial literacy resources.
“Give access to virtual services or anonymous services”TimelyCare virtual success coaching
supplements on-campus academic preparedness, career readiness, and
financial wellness support with an integrated 1:1 care and coaching
model.A complete list of questions and responses from the February 2025 survey may be found here. Click here to download a related infographic.
About TimelyCare
TimelyCare
is the most trusted virtual health and well-being solution for learning
communities, offering personalized, clinically proven care that fosters
student success and delivers life-changing outcomes. With an unmatched
range of service options on one seamless, easy-to-access platform,
including mental health counseling, on-demand emotional support, medical
care, psychiatric care, health coaching, success coaching, basic needs
assistance, faculty and staff guidance, peer support and self-guided
wellness tools, we extend the efforts of 400+ campus wellness teams,
ensuring millions of students have direct, anytime access to our
culturally competent and diverse care providers. Recognized as a
Princeton Review Top 5 Need to Know Organization for Mental Health
Awareness, TimelyCare drives measurable and meaningful improvements in
depression and anxiety, empowering every student on their wellness
journey while strengthening learning environments. -
Another reprieve for gainful employment, financial value transparency reporting deadline
This audio is auto-generated. Please let us know if you have feedback.Dive Brief:
- The U.S. Department of Education is extending the reporting deadline for the gainful employment and financial value transparency regulations to Sept. 30, according to an agency announcement last week.
- The seven-month extension aims to give college officials more time to submit the required information and to allow institutions that have already sent in their data to make corrections.
- The Education Department has pushed back the reporting deadline several times amid concerns that colleges didn’t have enough time or guidance to provide the data required under the new regulations. This extension, the first one under the Trump administration, will be the last, the announcement said.
Dive Insight:
The Education Department originally asked colleges to submit the gainful employment and financial value transparency data by July 2024, but higher education institutions requested more time given last year’s bumpy rollout of the revamped Free Application for Federal Student Aid.
The Biden administration released final gainful employment and financial value transparency regulations in 2023.
Under the gainful employment rules, career education programs must prove that their graduates earn enough money to pay off their student loans and that at least half of them make more than workers in their state who only have high school diplomas. Programs that fail those tests risk losing their access to Title IV federal financial aid.
Although the financial value transparency regulations don’t threaten federal financial aid, they create new reporting requirements for all colleges. Under the rule, the Education Department will post data collected from institutions about their programs — such as costs and debt burdens — on a consumer-facing website to help students make informed decisions about their college attendance.
The Biden administration extended the deadline for reporting requirements three times. Despite the delays, Education Department officials said late last year that they still expected to produce data in the spring to help students select their colleges.
With its latest announcement, the Trump administration’s Education Department is delaying that timeline also.
“The Department does not plan to produce any FVT/GE metrics prior to the new deadline and will take no enforcement or other punitive actions against institutions who have been unable to complete reporting to date,” it said.
It’s so far unclear how the Trump administration will handle the gainful employment regulations. In President Donald Trump’s first term, then-Education Secretary Betsy DeVos rescinded the Obama-era version of the rules, saying they unfairly targeted the for-profit college sector.
The Education Department is facing at least one lawsuit over the Biden administration’s version of the gainful employment rule. However, a federal judge earlier this month paused legal proceedings for 90 days after the new administration sought more time “to become familiar with and evaluate their position regarding the issues in the case,” according to court documents.
The National Association of Student Financial Aid Administrators — one of the organizations that pushed for a delay — applauded the move to extend the regulatory reporting deadline.
The change “is a sensible and welcome decision that will give financial aid offices much needed breathing room while they navigate unresolved issues in submitting their data and make necessary corrections to ensure the data they submit is accurate,” NASFAA Interim President and CEO Beth Maglione said in a statement last week.
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Making better decisions on student financial support
By Peter Gray, Chief Executive and Chair of the JS Group.
As the higher education sector starts to plan its next budget cycle and many may need to make savings, there is a concern about the impact of any cuts on students and how this could negatively affect their university experience and performance.
Universities are bound to look at a range of options to save money, especially given the stormy operating context. But one less-often highlighted aspect of university finances is the cost (and benefit) of the additional financial support universities devote to many of their students. Through cash, vouchers and other means, many universities provide financial help to support with the costs of living and learning.
Using Universities UK’s annual sector figures as one indicator, roughly 5% of universities’ overall expenditure has gone towards financial support and outreach, equivalent to around £2.5 billion. Although some of this money will inevitably not go directly to students themselves, this is still a significant amount of spending.
There are, naturally, competing tensions when it comes to considering any changes to targeted financial support. With significant financial pressures on students, exacerbated by the cost-of-living crisis, there is always a very justifiable case for more money. However, with the significant financial pressures universities are facing, there is an equally justifiable case to control costs to ensure financial sustainability. Every university has to manage this tension and trade-offs are inevitable when understanding just how much financial support to give and to whom.
In many respects, the answers to those questions are partially governed by Access & Participation Plans, with the clear intention that these financial interventions really change student outcomes. However, properly measuring those outcomes is incredibly difficult without a much deeper understanding of student ‘need’ – and understanding these needs comes from being able to identify student spending behaviour (and often doing this in real-time).
It always amazes me that some APPs will state that financial support ‘has had a positive impact on retention’ and some quite the opposite and I think part of this is a result of positioning financial support from the university end of the telescope rather than the student end.
Understanding real and actual ‘need’ helps to change this. Knowing perhaps that certain groups (for example Asylum Seekers or Gypsy, Roma, Traveller, Showman and Boater students) across the sector will have similar needs would be helpful and data really help here. Having, using, and sharing data will allow us to draw a bigger picture and better signpost to where interventions are most effectively deployed so those particular groups of students who need support are achieving the right outcomes.
Technology is at hand to help: Open Banking (for example) is an incredible tool that not only can transform how financial support can be delivered but also helps to build an understanding of student behaviour.
Lifting the bonnet and understanding behaviour poses additional questions, such as: When is the right time to give that support? And what form should that support take?
I am a big proponent of providing financial support as soon as a student starts. When I talk to universities, however, it is clear that the data needed to identify particular groups of students are not readily available at the point of entry and students’ needs are not met. Giving a student financial support in December, when they needed it in September, is not delivering at the point of student need, it is delivering at the point where the university can identify the student. I think there is a growing body of evidence that suggests the large drop off in students between September and December is, in part, because of this.
Some universities in the sector give a small amount of support to all students at the start of the year, knowing that by doing so they will ensure that they can meet the immediate needs of some students. But clearly, some money must also go to those who do not necessarily need it.
However, and this is where the maths comes in, if the impact of that investment keeps more students in need at university, then I would argue that investment is worth the return. And the maths is simple: it really doesn’t take many additional students to stay to have a profoundly positive impact on university finances. Thus it is certainly worthy of consideration.
To me, this is about using financial support to drive the ultimate goal of improving student outcomes, especially the retention of students between September and December, which is when the first return is made, where the largest withdrawal is seen and where the least amount of financial support is given.
As to the nature or format of support: of course, in most cases, it is easier to provide cash. However, again, this is about your investment in your student, and, for example, if you have students on a course with higher material and resource costs, or students who are commuting, then there is an argument to consider more in-kind support and using data to support that decision.
Again, I am a proponent of not just saying ‘one size fits all’. Understanding student need is complex, but solutions are out there. It is important to work together to identify patterns of real student need and understand the benefits of doing so.
My knowledge draws on JS Group’s data, based on the direct use of £40 million of specialist student financial support to more than 160,000 students across 30 UK universities in the last full academic cycle.
I have also looked at the student views on such funding and there is an emerging picture that connects student financial support with continuation, participation and progress. A summary of student feedback is here: https://jsgroup.co.uk/news-and-views/news/student-feedback-report-january-2025/
The real positive of this is that everyone wants the same goal: for fewer students to withdraw from their courses and for those students to thrive at university and be successful. We need to widen the debate on how financial support is delivered, when, and in what format to draw together a better collective understanding of student need and behaviour to achieve that goal.