New analysis from the Office for Students (OfS)
finds continued pressure on university
finances, despite evidence of
increased recruitment.
The report updates the OfS's annual financial
sustainability report, which was published in
May 2025, taking into account early information
about the number of UK and international students who
entered higher education this autumn. It reports on
increased recruitment across the sector as a whole
for both UK and international students. On student
recruitment, the report finds:
· Acceptances of UK
undergraduate students through UCAS have grown by
3.1 per cent in 2025 compared with the same point in 2024,
though this remains below the sector's forecast growth
of 4.1 per cent.
· The overall growth in
UK recruitment is driven by larger research-intensive
and medium-sized institutions. This has led to
significant variation across this sector, with many
individual providers not meeting their recruitment
expectations, although there
are initial signs of more prudent admissions forecasts
across the sector.
· Indications from Home
Office data suggest that international student recruitment has
returned to year-on-year growth after the significant decline in
visa applications in 2024, though the number of visas
issued is still significantly below those issued in
2023. Data shows an overall increase of 6.4 per cent in
the number of Confirmation of Acceptance for Studies (CAS) issued
in the period before the September intake.
There remains significant variation in the
sector, both in terms of overall financial performance and
student recruitment. Without mitigating
actions, 124 institutions, representing 45 per
cent of those included in the analysis face a deficit in
2025-26. This has increased from 34 per cent
from provider forecasts in May.
Commenting on the analysis, Philippa Pickford, Director of
Regulation at the OfS, said:
‘While increased student recruitment is
positive news, this report shows the continuing
challenges facing the higher education sector. Universities now
have welcome clarity over tuition fee levels in future years, and
we also know
that many institutions are
continuing to take significant steps to cut costs, work
collaboratively with partners and seek opportunities for
realistic growth. They are also becoming more realistic and
prudent in their planning, including tempering
ambitions for recruitment that are
too optimistic.
‘But nobody should be under any illusion that
the challenges that have gripped the sector in recent years have
evaporated. The tough decisions many institutions have
taken have certainly made a difference but we
still predict that significant numbers of universities will face
deficits by the end of 2025-26. A smaller proportion
also face liquidity problems, with our modelling
projecting nearly one in six
institutions will have less than 30 days'
liquidity. Some universities continue
to base their forecasts on
unrealistic expectations of growth, while
others are taking short-term
measures rather
than tackling transformational changes needed
to right-size their
businesses. It continues to be our
assessment that we do not expect multiple universities
to close in the short term. But some
institutions need to take radical action,
which might include considering different structures or business
models.
‘The OfS will continue to assess and analyse financial
sustainability for individual institutions and
for the sector as
a whole. We continue to engage with
partners, including sector representative bodies,
financial experts, lenders and audit firms to
discuss the risks facing the sector and the important
role that effective governance and leadership play in
addressing these
challenges. Where an institution runs into
financial problems, we will work closely
with it to ensure students are properly
protected and that our world-renowned higher education sector
continues to flourish.'
ENDS
Notes
1.
The Office for Students is the independent regulator for higher
education in England. We are striving to deliver exemplary
regulation in the interests of students. Find out more
about our new strategy.
2.
Alongside this press release, the OfS is
publishing ‘Financial sustainability of higher education
providers in England: November 2025 update'. An embargoed copy is
attached.
