Tag: net

  • Beyond the Margin: When might low net revenue in international student recruitment be justified?

    Beyond the Margin: When might low net revenue in international student recruitment be justified?

    • Vincenzo Raimo is an independent international higher education consultant and a Visiting Fellow at the University of Reading where he was previously Pro Vice-Chancellor for Global Engagement.

    In my recent article for The PIE News, I argued that the financial sustainability of international student recruitment deserves much closer scrutiny. With commissions, scholarships, marketing costs, and operational overheads taken into account, the margins on international enrolment are often far lower than they appear on paper – sometimes even negative.

    At a time when the financial health of UK higher education is under intense pressure, it is right that we ask whether international recruitment is really worth it. But this doesn’t mean that every low-margin intake is necessarily a poor strategic decision.

    In fact, there are good, sometimes essential, reasons why institutions might pursue or maintain international student recruitment with lower net financial return. But those decisions must be deliberate, transparent, and aligned with broader institutional aims. That’s not always the case.

    So how can we assess whether low-margin recruitment is justified?

    Here are five scenarios where low net revenue per student might make strategic sense:

    1. Filling Capacity or Managing Fixed Costs

    For many universities, fixed costs dominate the cost base. If recruiting a marginal cohort of international students helps fill underutilised teaching space or resources, and the marginal cost of teaching them is low, then even a small surplus can help improve the overall financial picture. This is particularly relevant in the context of declining domestic demand in some areas.

    2. Maintaining Subject Diversity or Cross-Subsidising Departments

    Low-margin international recruitment can sometimes help sustain strategically important but otherwise financially marginal subjects. This may include courses that support the university’s civic role or feed into regional skills needs. Used appropriately, it can help protect the breadth and integrity of an academic offer.

    3. Building a Pipeline for Higher-Value Activities

    In some cases, international student recruitment may have low margins, but it helps establish relationships that lead to high-value postgraduate, PhD, or alumni outcomes. It may also feed research collaborations, business engagement, or future TNE ventures. But such pipeline logic must be based on more than hope – institutions need to measure conversion, retention, and downstream value.

    4. Advancing Strategic Partnerships or Market Development

    An institution might accept lower margins to anchor a presence in a high-potential market or strengthen a bilateral partnership with a key international institution, government, or agency. These efforts can open the door to broader collaborations – but again, they require long-term planning and evidence of value beyond headcount.

    5. Delivering Mission-Aligned Social or Cultural Impact

    Some universities recruit from particular countries or communities not because it delivers high surplus, but because it aligns with their mission: widening access to UK education, supporting development goals, or enhancing campus diversity. These are valid choices – but they must be recognised as such, and the trade-offs clearly understood.

    A Checklist: Is Low-Margin Recruitment Worth It?

    To support institutions in making informed decisions, I’ve developed the following tool – a series of guiding questions to assess whether low-margin recruitment routes or cohorts align with institutional strategy.

    This is not a tick-box exercise. Rather, it’s a framework to prompt a more strategic, evidence-based approach to planning.

    The Danger of Denial

    The real issue isn’t low-margin recruitment as such – it’s unexamined recruitment. Too often, institutions recruit internationally based on historic patterns, copying what others are doing or perceived opportunity, without fully evaluating cost, risk, or alignment with institutional strengths.

    As pressures continue to mount, universities need to treat international recruitment with the same rigour they apply to research, teaching, and estates: as a strategic investment with benefits and risks. That starts with honest internal conversations about why we recruit, who we are recruiting, and what success looks like.

    Conclusion

    Low net revenue doesn’t automatically mean bad recruitment. But it should always prompt a question: Is this worth it – and why?

    By adopting a more mature and transparent approach to international student recruitment strategy, UK universities can balance growth with sustainability, manage risk, and ensure they are maximising both financial and non-financial returns from their global engagement.

    Catch up here on HEPI’s Weekend Reading on ‘Imperfect information in higher education’.

    Source link

  • The Net Price of College Is Falling for Most Students

    The Net Price of College Is Falling for Most Students

    Title: College Prices Are Falling for Everyone (Almost)

    Source: Brookings Institution

    Author: Phillip Levine

    New research from the Brookings Institution reveals a surprising truth: inflation-adjusted college prices have fallen for most students over the past five years. Phillip Levine’s analysis examines what students actually pay—the net price after financial aid—rather than the sticker prices that dominate media coverage.

    Using data from net price calculators at 200 institutions and proprietary financial aid records from 14 highly endowed colleges, his findings challenge the common narrative:

    Widespread price decreases: Between 2019-20 and 2024-25, inflation-adjusted net prices declined across institution types. Public flagship universities saw reductions of 7.1-17.3 percent, depending on family income level, while other public institutions experienced decreases of 8.5-13.2 percent. Private colleges with very large endowments had substantial declines, ranging from 7.0-43.4 percent, and tuition-dependent private colleges saw net prices drop by 16.8-23.3 percent.

    Lower-income students benefit most: Families earning $40,000 annually, representing the 25th percentile of the income distribution, experienced the largest reductions, with net prices dropping by 13.2-40.9 percent depending on institution type.

    Wide price variation by income: At private institutions with very large endowments, students from families earning $40,000 pay approximately $4,400 annually, while those from families earning $240,000 pay $82,800 annually.

    At many institutions, families earning $40,000 are still expected to contribute $15,000-$20,000 annually. Only the most heavily endowed institutions typically offer aid packages that lower-income families can reasonably manage. This raises important policy implications: proposed increases to endowment taxes may undermine institutions’ ability to provide generous financial aid, potentially harming the very students who benefit most from their pricing models. Private colleges and universities rely heavily on endowments to fund scholarships, research, and education—often more than they rely on tuition revenue. Treating endowments like business profits could shift the financial burden onto students and weaken U.S. innovation.

    The complexity of college pricing creates uncertainty for families, policymakers, and media. Greater transparency about the true cost of attendance is essential. By focusing on actual prices rather than headline-grabbing sticker prices, we can help reshape the national conversation on college affordability and ensure that misconceptions don’t deter qualified students from pursuing higher education.

    To read the full Brookings research analysis, click here.

    —Alex Zhao


    If you have any questions or comments about this blog post, please contact us.

    Source link

  • Heat networks could help institutions meet net zero targets

    Heat networks could help institutions meet net zero targets

    Heat networks enable heat and hot water to be distributed from a central ‘energy centre’, via mainly underground pipes, to multiple buildings.

    Boiler systems in connected buildings would be replaced with new infrastructure, to enable circulation of heat from the network. The energy centre becomes the source of the heat supply.

    Heat networks have a long history — with the first networks being tested nearly 150 years ago. Distribution of heat from a centralised heat source was taken forward in New York city in the late nineteenth century. In the UK, heat networks were used in blocks of flats in the 1960s and 70s. Denmark was one of the first countries to start using heat networks on a wide scale, in response to the oil crisis in 1973. Currently, heat networks are commonly used in Scandinavia and Eastern Europe and in cities across the USA and Canada. There are around 14,000 heat networks in the UK with many being campus-style, providing heat to groups of social housing or hospital/NHS campuses.

    Modern heat networks can utilise sources of low carbon heat. These include energy from waste facilities, geothermal sources, solar thermal arrays, air and ground source heat pumps and data centres.

    Participating in a heat network is likely to be more environmentally friendly and, in some cases, more cost-effective than maintaining older, inefficient gas-fired heating systems.

    Funding available

    It’s estimated that fifty per cent of buildings in the UK are located in areas suitable for the construction of a heat network, which currently supply around 2 to 3 per cent of the UK’s heat. The Committee on Climate Change predicts that in order to meet net zero targets (with around 20 per cent of heat supply being from heat networks), it is estimated that investment will need to be around £60 to £80 billion by 2050.

    The government has confirmed its support for the sector, as re-iterated at November’s Association for Decentralised Energy Conference by Miatta Fahnbulleh, Minister for Energy Consumers. The government has set a target for at least 18 per cent of the UK’s heat demand to be met from heat networks by 2050. Over £600 million of government funding has been allocated to develop and improve heat networks.

    The government’s recently published “Clean Power 2030” action plan sets out that the national wealth fund will make available an expanded suite of financial instruments, as part of investment in heat networks and other clean energy sectors.

    The Department for Energy Security and Net Zero already significantly supports the sector via capital grant funding from the Green Heat Network Fund. Education institutions have a range of grant options available to them. One example is the Public Sector Decarbonisation Scheme (via its delivery body, Salix Finance), being a fund dedicated to supporting energy efficiency and decarbonisation initiatives.

    Financial support for heat networks is supplemented by the work of other bodies such as the Heat Networks Industry Council, which is a joint industry and Government forum that aims to grow the heat network sector.

    Taken together, it is clear that there is genuine ambition to ensure that heat networks play a key role in helping the UK meet its net zero ambitions.

    Notable heat network developments

    A number of major heat network projects are underway, including the hugely ambitious South Westminster Area Network (referred to as “SWAN”), which will supply low carbon heating to the Houses of Parliament, the National Gallery and large areas of Whitehall, and the Leeds PIPES heat network, which connects to over 3000 dwellings.

    The existence of these projects, and numerous others, is evidence of a growing trend in the emergence of heat networks as a major contributor to the UK’s net zero ambitions.

    Campus based networks

    Heat networks can work well on campus-style facilities. Given the location of the projects mentioned above, city-based higher education institutions should also consider whether it is feasible for their buildings to connect to a heat network, and whether a heat network is planned in their area.

    There are a number of recent adopters of heat networks in the education sector, including the University of Liverpool, the University of Bradford and the University of Warwick, with many more universities considering becoming heat off-takers.

    Heat networks present academic institutions with an exciting opportunity to forge the way in supporting both new sources of heat, and decarbonising heat in urban areas.

    Regulation matters

    Aside from regulations that govern billing and metering, the heat network sector is not regulated. This, however, will change – the heat networks market framework regulations 2025 (currently in draft) is to come into force in stages over the next 12 months.

    Future regulation is subject to ongoing consultation, which includes consideration of how different groups of consumers are to be protected, and specific arrangements on standards of conduct and billing transparency.

    In particular, the proposed regulations do not specifically refer to a ‘supplier of last resort’ regime, which would enable a state-nominated entity to continue the operation of a heat network where the relevant operator had become insolvent. We understand that Ofgem and the government are considering how this would work, given the complexity of arranging for the ownership transfer of infrastructure and capital assets. We await further developments on this.

    The scheme rules of the Heat Trust, which operates to protect the interests of domestic and micro-business customers of heat networks, partly informed the content of forthcoming regulations. The Heat Trust’s voluntary scheme is intended to establish common standards of heat supply and associated customer service (with standards of service comparable to those required by Ofgem of electricity and gas suppliers). We therefore anticipate robust standards to be introduced within the regulations, for a wider group of consumers.

    Connecting to a heat network involves technical aspects relating to design, maintenance, service standards, and availability of a ‘green’ heat supply. Legal support is essential in navigating new networks as well as specialised technical support. For example, procurement risks, design and delivery risks, real estate and contamination issues, constructions issues, particularly around connection work and secondary side works, exclusivity arrangements and “change in law” provisions given forthcoming regulatory requirements.

    Mills & Reeve advises a number of Universities and other bodies on their participation in heat networks.

    If you are considering participating in a heat network and would like to speak to us about how we can help, please do contact any member of the M&R team.

    Source link

  • The Migration Advisory Committee thinks about skills and long term net migration

    The Migration Advisory Committee thinks about skills and long term net migration

    The Migration Advisory Committee’s annual report for 2023 ended up being one of the publications with most policy influence on the subsequent year.

    Though it was released the week after then Home Secretary James Cleverly announced a review of the Graduate route, it clearly reflected ongoing Whitehall discussions and concerns over the post-study work visa, and much of its conclusions ended up being quoted incessantly through the subsequent debate around the MAC review – especially by those in favour of the route’s abolition or restriction:

    The graduate route may not be attracting the global talent anticipated, with many students likely entering low-wage roles.

    Our concern that the graduate visa would incentivise demand for short Master’s degrees based on the temporary right to work in the UK, rather than primarily on the value of qualification, may well be borne out in the trends that we have observed.

    As we have already shown, the rise in student numbers is almost entirely focused on taught Master’s degrees, and the growth has been fastest in less selective and lower cost universities. The rise in the share of dependants is also consistent with this.

    Given all that, it’s probably a relief to all concerned that the 2024 edition of the MAC annual report doesn’t go in depth on any international student-related issue, reflecting what feels like a (welcome) period of stasis in visa policy affecting higher education under the new government.

    Nevertheless, the MAC has a beefed up role under Labour – additional civil servant resource, plus we now learn that chair Brian Bell’s role will move from two to five days a week – and this time around the questions percolating away are worthy of some long-term thinking, even if they are not going to lead to knee-jerk policy decisions.

    Staying or going

    The annual review kicks off with consideration of long-term net migration trends, noting that the general election saw all main parties commit to bringing headline figures down.

    Thinking ahead, it notes:

    In the long run, work routes will have a greater impact on net migration compared to study routes as a greater percentage of those on the work route stay in the UK, whilst students are more likely to emigrate when they finish their course. Put simply, whilst students increase net migration in the year they arrive, they will reduce it by the same amount if and when they leave.

    This is a helpful soundbite for the sector, after last month’s ONS figures started to make clear what has been evident for a while – that historic claims around the “vast majority” of international students leaving the UK after completing their courses no longer hold much water. The ONS net migration stats estimated that the proportion of those on student visas who had transitioned to another visa three years after arriving was 48 per cent for those who arrived in year ending June 2021. This was up from nine per cent for those who arrived in June 2019, largely driven by introduction of the Graduate route.

    But the detail is still uncertain, as the MAC goes on to acknowledge. It cites recent Migration Observatory modelling (director Madeleine Sumption is now the MAC deputy chair) which estimates that the “stay rate” after eight years is around 26 per cent for those on study visas, compared to 56 per cent for those on work visas. The consequence of this is that – again, according to the Migration Observatory’s heavily caveated modelling – is that student visas contribute to 19 per cent of long-term net migration.

    (The modelling also lets you adjust the assumptions around stay rate and annual international student numbers – the baseline is rather simplistically 250,000 new student visas every year from 2024 to 2032, though to be fair recent volatility means that putting a firm prediction on international recruitment is a brave bet in itself.)

    All in all the MAC notes that stay rates are “highly uncertain” – but it’s an issue that will continue to inform the wider political debate, especially as the post-pandemic bulge is gradually smoothed out of net numbers. It’s notable in this context that think tank Labour Together – which typically has the ear of the government – has just put out a proposal for a “national migration plan” based on nationally set targets for different routes. Student visas, it says, would only be included in the analysis “to the extent that they have an impact on long-run net migration” through the Graduate and Skilled Worker visa routes.

    The skills puzzle

    The central piece of this year’s review is driven by the observation that the new government’s intention is “to more closely link migration and skills policy.” Given that starting point, the MAC carefully explores to what extent this can work. It’s of course written in the careful language you would expect of a government-sponsored committee with a Home Office secretariat, but reading between the lines there’s a cautionary note to it all (and not just in the observation that “skills” is an “ambiguous term both conceptually and empirically” – don’t tell Jacqui Smith).

    “In theory”, MAC observes, skills shortages lead employers to recruit using the immigration system. “If this were true,” the government can bring down work-related immigration via the reduction of skills shortages.

    In practice, there are some complications. Most obviously, skills investments take a long time to translate to the labour market – the last government repeatedly took the quicker route of facilitating international recruitment, especially in the health and care sectors, but also in not insignificant ways in areas like filling teacher vacancies.

    The MAC also stresses how employers will not deliberately make choices around whether to hire UK-based workers or those from overseas (speaking to The Times, Brian Bell specifically points to academic recruitment as an area where employers – universities – would not change their hiring practices if the domestic labour force had better qualifications). We are also told that labour demand and supply are not independent (“employers look for what they think they can get, and employees try to match what employers want”), and that skills aside there are other differences between domestic and international recruits.

    For the construction industry, this latter point was vividly illustrated by the Financial Times last week, which argued that many businesses in this field prefer “pay-by-the-day” labour and self-employed staff, and hence hire internationally and typically not via skilled worker routes – another consequence of this is that they are unlikely to commit to training apprentices. (The article also cites Brian Bell saying that high net migration leads to “real strains on our ability to manage housing and infrastructure,” in case anyone was thinking the MAC will take a more dovish approach under Labour.)

    All in all, bringing about a join-up between the skills and migration systems is a tough ask – or, more cynically, an unrealistic policy goal. It’s clear that the MAC is trying to temper expectations about what can be achieved:

    Linking immigration and skills policy is not a ‘one-size-fits-all’ approach and it is important to consider the individual circumstances within sectors and occupations, including diagnosing whether shortages are genuinely driven by a lack of skills or are due to poor pay and conditions of certain roles.

    And the elephant in the room is pay. In the care sector, the MAC has repeatedly stressed that wages need a significant uplift for other visa-related tinkering to have an impact. It stresses this again here, and makes the point that a large proportion of work visas go to public sector workers.

    This is a point for Skills England to take on board as well, you would hope. Its initial report was notably incurious about the role of low pay (especially in the public sector) in driving “skills mismatches”, rather presenting employment more as a simple supply and demand relationship between skills available and skills needed. The MAC annual report has some more persuasive analysis here, showing a lack of correlation between so-called “skills shortage vacancies” (SSVs) and skilled worker visa usage. That is to say, it’s by no means a given that those industries facing skills shortages are the ones more likely to sponsor workers from overseas. There are all kinds of factors at play.

    Quad to the rescue

    You get the sense that the team of economists who make up the Migration Advisory Committee are being careful about the government’s plans to link up skills and migration in a coherent way (it’s also noted at one point that skills is devolved and immigration is not – another challenge).

    What we’re getting to make this all fit together is a new “Quad framework” (I believe this is the first time it’s publicly been referred to in this way). As promised in Labour’s manifesto, the strengthened MAC will be working with the newly launched Industrial Strategy Council, the Department for Work and Pensions, and Skills England – the manifesto in fact promised “skills bodies across the UK”, but this hasn’t been fleshed out yet.

    This Quad will cooperate “to address systemic long-term issues that have led to reliance from certain sectors on international recruitment, and where appropriate, to reduce that reliance.” The MAC anticipates that the Quad will help identify priority sectors (following the industrial strategy, when ready) and determine which have a high reliance on migration, after which the MAC will – if it sees fit – recommend policy levers the government might pull, while Skills England will be drawing up workforce and skills plans, of some sort.

    It’s all a recipe for an incredibly complicated set of moving parts, and given Skills England’s involvement and the importance of overseas staff and student recruitment, one that the English higher education sector would be wise to keep an eye on and work out how it can contribute to.

    Source link

  • Average Net Price at America’s Public Colleges and Universities

    Average Net Price at America’s Public Colleges and Universities

    Good news: We have new IPEDS data on average net cost.  Bad news: Because IPEDS is IPEDS, it’s data from the 2021-22 Academic Year. 

    This is pretty straightforward: Each dot represents a public institution, colored by region, showing the average net price for first-year students entering in that year.  IPEDS breaks out average net price by income bands, so you can see what a family with income of $30,000 to $48,000 pays, for instance, by using the filters at right.

    You can also limit the institutions displayed by using the top three filters: Doctoral institutions in the Far West, or in Illinois, for instance.  If you want to see a specific institution highlighted, use that control.  Just type part of the name of the institution, like this example, and make your selection: 

    Average net price shows The Total Cost of Attendance (COA), which includes tuition, room, board, books, transportation, and personal expenses, minus all grant aid.  It does not include loans, but of course, loans can be used to cover part of the net price, along with other family resources.

    This display is a box and whisker chart, and if you’re not familiar with the format, here is a quick primer: 

    For the sticklers, the median shown is unweighted.

    As always, let me know what you see here that you find interesting or surprising.

    Source link