HE forecast for 2012: fees, applications, funding and course cuts

Kim Catcheside explores the biggest HE issues of 2011 and suggests what ripple effects these may have next year.  With students and Parliament at home, there is an opportunity to reflect not just upon the week, but upon the past and coming year. As is so often when a great deal has happened, 2011 feels as if it has been at once a very long and a very short year. It seems hardly possible that the Browne Review was published only 15 months ago and the HE White paper six months ago. Then commentators wrote about higher education being catapulted into the unknown but after a stream of publications and decisions the future is still pretty much a mystery.

Next month we will discover how the trebling of fees in 2012 have affected full time applications for that year. My bet is that applications will be down by at least 10% on average but of course the pain won't be evenly distributed. The Times Higher Education Supplement reports this week on the results of a straw poll suggesting, unsurprisingly, that the post 92 institutions are likely to see a disproportionate loss, with a "significant proportion" larity reporting falls of more than a fifth. A number of Russell Group institutions have been using the muscle of their prestige to recruit more AAB students and may well see applications increase. If the past is a guide, there will be a significant drop in the number of mature applicants who are more likely to be women. Early figures indicated regional inequalities with applications holding up in the south east and falling significantly in the north and the east.
The consequences of the government's visa controls are still playing out. This has already had a serious impact on the private sector but there could be dire consequences for Universities especially for those dependent on recruitment in the Indian subcontinent. I have heard reports of falls of up to 40% in the recruitment of overseas students to some post graduate courses. There must be the potential for a "double whammy" of reduced home and overseas students affecting the sustainability of some institutions in the next few years.
At the end of February HEFCE will launch the consultation into how what little funding it has left will be allocated from 2013/14. One of the many important questions to be settled is how courses in arts, creative and digital will be treated. These have attracted more government funding to date because they are more expensive to deliver than classroom based subjects such as humanities. There is concern that these subjects, so essential to many of our fastest growing businesses, will lose their extra cash. HEFCE will have very little money to spend on teaching and may struggle to honour obligations to support high cost and strategically important subjects such as STEM. There is speculation that it may have to rob poor Peter to pay Paul by cutting spending on widening participation.
2012 will see a struggle in the sector over whether or not the government should extend the free for all in AAB students to those with ABB or even BBB grades or equivalent. The 1994 Group wants "off quota" students to be extended, presumably to level the playing field which is currently skewed in favour of the Russell Group. But there are concerns that this would destabilise a system already overburdened by change.
We will also get more clarity on the future regulation of HE. There are big questions still to be answered about how and whether more private providers will get degree awarding powers. Again there is a debate about whether universities should be lobbying for light touch regulation or to have the bar set as high as possible to deter all but the most high quality private sector organisations.
But as the leaders in the HE sector scurry and plan, the Treasury will be keeping an eagle eye on the projected cost of the student loan system. The proportion of estimated bad debt has already climbed from 25% to 30%. I have heard informed speculation that it could easily get to 38%. It will be very sensitive to future graduate earnings and if we really are in for a decade or more of slow or no economic growth then wages may not grow as projected, leading to an even greater proportion of unpaid debt. That could break the system and policy makers would have to start all over again.