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Experts and vice chancellors are warning that elite institutions may reject an increasing percentage of UK students in favor of more profitable overseas applications in the coming years.

Since 2017, tuition prices for home students have been fixed at £9,250 per year. However, analysts estimate that increasing inflation has reduced their true worth to £6,000 - the equivalent of fees in 2010 - which universities claim is substantially less than the cost of teaching the average student. To compensate for these losses, several institutions, particularly at the high end of the industry, have increased their number of overseas students.

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With the increasing number of 18-year-olds in the UK, top institutions believe they will be unable to match the increased demand for spots from British sixth-formers unless the government intervenes.

Professor Colin Riordan, vice-chancellor of Cardiff University and a member of the Russell Group, told The Observer that “at a time of demographic growth among home students, it is inevitable that it will be more difficult to provide enough places. But it won’t be because we can’t fit them in – it will be because we can’t afford them.”

Riordan is certain that no university wants to be in this situation since educating British students should be the main goal of a British university.

Riordan believes that ministers must promptly discuss how to reform higher education finance, but he is skeptical that this will happen.

According to him, "We can see a cliff edge ahead of us and we are just going towards it.” The Russell Group notes that universities will lose an average of £4,000 for every UK undergraduate student they educate by next September. 

Mark Corver, a co-founder of DataHE, a consultancy that advises universities, said, "The real value of the fee cap has now dropped to £6,000, and by the autumn it will have dropped even further.”

He elaborates that this is inflicting significant damage on universities as they are "businesses being asked to sell something at considerably below what it costs to make it."

Universities have cited the diminishing real worth of tuition to justify refusals to fulfill staff compensation requests. According to the Universities and Colleges Union, their allegations of hardship are exaggerated and the industry can "more than afford" to raise wages after producing a record £44.6 billion last year.

An existential crisis

Nick Hillman, director of the Higher Education Policy Institute think tank, stated that ministers will be pressured in upcoming years, stressing that “policymakers start taking issues seriously when it starts affecting the children of people like them."

Hillman contends that colleges will be forced to reduce the number of students they educate at a loss while still meeting government standards for the proportion of students from less fortunate backgrounds.

He expressed that the country needs an expansion of universities as the demand for higher education continues to go up. 

Simon Marginson, a professor of higher education at Oxford, called the situation an "existential crisis".

Marginson remarked that "the wheels have now come off" the 2012 university financing structure, which raised prices to £9,000 while eliminating all government assistance for most degree programs.

He called the fees “politically impossible to increase, especially in the middle of a cost of living crisis joined to a collapsing NHS."

According to a spokesperson for the Department for Education, “We are keeping maximum tuition fees frozen to deliver better value for students and keep the cost of higher education under control.”

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The National Union of Students (NUS) pointed out last month that university students in the United Kingdom have to work three jobs and cut their spending due to the decrease in financial support from the government and growing prices.

Earlier, the UK Institute for Fiscal Studies (IFS) revealed that government support for living costs for university students in the form of loans reached the lowest level in seven years.

The amount of money that students can borrow depends on their families’ income, and students from the poorest families can borrow only $11,700 this academic year.