Half of students think failing universities should be bailed out

A third of students are worried that their university could go bust, with half expecting the government to take over in the event of institutional failure, according to new polling.

Students in the UK were asked for their views by polling company Savanta on behalf of the Higher Education Policy Institute (Hepi) amid increasingly dire warnings about the state of university finances – with 40 per cent of institutions thought to be in deficit and no help forthcoming in last week’s budget.

Of the 31 per cent who say they were worried for the future of their institution, 5 per cent described themselves as “very worried”, while 26 per cent were “quite worried”.

At 17 per cent, those attending Russell Group universities are the least worried. Students at specialist and pre-92 universities are the most worried overall (43 per cent), and post-92 universities have the highest proportion of those who said they are “very worried” (9 per cent).

Asked to choose from a list of 10 options of what actions should be considered if their university did go bust, 49 per cent say it should be taken over by the government “to ensure it survives”.

The next three most popular options are the cancellation of student loans, students being transferred to another institution and the university being merged with another.

Ministers have repeatedly played down expectations that the government would step in to bail out a university in trouble. Skills minister Baroness Smith of Malvern told reporters earlier in the year that an institution would be allowed to go bust “if necessary”.

Experts have speculated that institutions in London and other cities well served by higher education provision would be most likely to be allowed to go under, with those in cold spots or serving the skills needs of large civic centres more likely to be seen as “too important to fail”.

A total of 1,003 undergraduate students were polled for the exercise between 18 and 25 October.

Nearly 40 per cent of the students are confident that the government would “behave quickly and sensibly if and when a university goes bust”, with about the same proportion not confident.

Nick Hillman, Hepi’s director, said financial sustainability was the “number one issue facing higher education institutions at the moment”, but students’ views on the situation were little understood.

Many of the options preferred by students in the event of a failure would prove costly to the government, Mr Hillman added.

“It was disappointing that there was no new support for either students or institutions in last week’s budget. But as regulators and policymakers continue to consider the future of our universities, they should ensure the views of students are taken into account alongside the needs of staff and others directly affected.”

tom.williams@timeshighereducation.com