This briefing explains how the rising cost of living has affected further and higher education students in the UK.
Documents to download
Higher education in the UK: Systems, policy approaches, and challenges (3 MB , PDF)
The four parts of the UK have a shared history where higher education is concerned, and students and staff flow between them. At the same time, the devolution of responsibility for higher education over the last 30 years has allowed England, Wales, Scotland, and Northern Ireland to take increasingly distinctive paths in how they manage their systems.
This research briefing provides an overview of these four higher education systems and considers where policy approaches align and diverge across the UK. It also covers a number of challenges facing the UK higher education sector, particularly regarding the funding of teaching, research, and student support.
More detail on all the headings below is available in the full briefing.
Management and co-ordination
While colleges play an important role in the provision of higher education, particularly in Scotland, students across the UK primarily study for higher education qualifications in universities. These are autonomous, self-governing institutions, responsible for appointing and employing their own staff and setting their own policies and procedures. However, this autonomy must be understood within a wider policy context set at a national level.
There are currently four contrasting bodies with responsibility for the management of higher education in the UK:
- The Office for Students (OfS) in England.
- The Higher Education Funding Council for Wales (HEFCW), which is soon to be replaced by the Commission for Tertiary Education and Research (CTER).
- The Scottish Funding Council (SFC).
- The Higher Education Division of the Department for the Economy in Northern Ireland.
The regulation-based approach to the management of higher education in England, through the OfS, contrasts with Wales and Scotland, where the SFC and HEFCW are tasked with developing an overall vision for the higher education systems of their respective nations. In England, any kind of overarching strategic approach is confined to the areas the OfS is tasked with regulating.
Northern Ireland’s approach to managing higher education is also distinctive because it is characterised by oversight from a government department, the Department for the Economy, rather than through an intermediary body.
Funding of higher education and student support
Tuition fees and grants are the most significant sources of income for most higher education providers. The total income of higher education providers across all four parts of the UK exceeded £40 billion in 2020/21. Government spending includes direct funding for teaching and research through grants from national funding bodies, as well as loans and grants paid to students to cover tuition fees and help towards living costs.
Since 2012, funding for teaching has shifted towards increased tuition fees paid by students. In Scotland, the fees of eligible students are covered by the Scottish Government. Since 2016, England has differed from the rest of the UK by not providing maintenance grants for living costs to most students, beyond the targeted allowances for particular circumstances (for example, students with childcare responsibilities). These additional allowances are also available in Scotland, Wales, and Northern Ireland.
Following reductions to Government grants, and tuition fee caps not keeping pace with inflation over the last decade, the financial sustainability of the higher education sector has come under increasing strain. Recent inflationary and cost of living pressures have also placed demands on universities in relation to pay settlements, energy costs, and capital projects. Student maintenance support has not risen in line with recent inflation across the UK either, with real terms cuts to student support leaving the poorest around £1,500 worse off since 2020/21 in England.
There were over two million higher education students in the UK in 2020/21. Nearly 80% were undergraduates and over 80% study in England. In recent years there has been:
- Increasing student numbers everywhere in the UK. Wales has seen the largest percentage increase while Northern Ireland the smallest.
- A substantial increase in postgraduate taught students everywhere in the UK. Wales saw the biggest rise of 44% between 2016/17 and 2020/21.
- Little increase in postgraduate research student numbers.
- A small increase in part-time students, but numbers remain well below their levels from a decade earlier following a fall of 42% between 2009/10 and 2017/18.
Higher education participation differs by socio-economic background, gender, ethnicity, and age across the UK. The challenge of extending access to, and ensuring success in, higher education is approached differently in each part of the UK, but the commitment to improve participation is relatively high by international standards.
Each part of the UK requires certain higher education providers (generally those that want to charge higher tuition fees or ensure their students are eligible for publicly funded student support) to have plans in place setting out what they will do to increase participation in higher education by students from under-represented groups. Governments across the UK also fund outreach projects, which encourage regional collaborations between higher education providers, colleges, and schools with the aim of improving participation among disadvantaged sections of society.
Teaching, learning, and employability
There are around 230,000 academic staff employed in the higher education sector across the UK, and around 220,000 non-academic staff. A report published in March 2022 by the University and College Union (UCU) said two-thirds of respondents were likely or very likely to leave the university sector in the next five years over pension cuts and pay and working conditions.
Quality assurance is based around a combination of internal review of practices by universities themselves and external review by designated bodies. In the UK, this external role is undertaken by the Quality Assurance Agency for Higher Education (QAA). From 2023, the QAA has said it will not continue as the designated body in England because the requirements made by England’s current regulatory approach are “not consistent with standard international practice for quality bodies”.
As well as a focus on teaching quality, supporting students to achieve positive outcomes after graduation is a priority in all four parts of the UK. England is unique in setting numerical thresholds on minimum acceptable student outcomes higher education providers must meet. For full-time students studying a first degree, the thresholds are:
- 80% of students to continue their studies
- 75% of students to complete their course
- 60% of students to go on to further study, professional work, or other positive outcomes, within 15 months of graduating.
The majority of students in each part of the UK question the value for money of higher education. The propotion of students who believe their course represents good value for money is lowest in Northern Ireland but highest in Scotland.
UK higher education in an international context
The UK Government’s International Education Strategy includes ambitions to:
- increase the value of education exports to£35 billion per year by 2030;
- increase the total number of international students choosing to study in the UK higher education system each year to 600,000 by 2030.
The latter ambition was met for the first time in 2020/21, with 605,130 international higher education students studying in the UK in universities, further education colleges, and alternative providers.
While the UK is one of the leading countries in the world for attracting international students, far fewer UK students study abroad. In 2019, this was estimated at 2%, which is half the EU average and below levels in Germany and France (both 4%).
Following Brexit, the UK chose to leave the EU’s Erasmus+ programme. Some aspects of Erasmus+ have been replaced by the UK-wide Turing Scheme and, in Wales, the Taith programme. The Scottish Government has said it will develop its own international education exchange programme. Under an arrangement being worked out with the Irish Government, higher education students in Northern Ireland will continue to have access to the Erasmus+ programme.
Research funding and output
Support for research led by universities and higher education providers across the four parts of the UK comprises a UK-wide and region-specific approach. University research is publicly funded through what is known as the ‘dual support’ system:
- UK Research and Innovation(UKRI) funds specific research projects and programmes through the seven subject-based Research Councils, Innovate UK, and Research England. UKRI is a non-departmental public body sponsored by the Department for Science, Innovation, and Technology (DSIT) with a national budget in 2020/21 of £7.9 billion.
- Block grants of public funding are distributed to higher education providers to support their research infrastructure. This is known as quality-related research (QR) funding. It is calculated using the Research Excellence Framework (REF), which is an exercise held once every seven years using data provided by universities to consider the quality of their research.
Additional research funding is also available from other sources such as charities, industry, and Government departments. The new Advanced Research and Invention Agency (ARIA) will also begin its work from 2023. ARIA will exclusively focus on projects with potential to produce transformative technological change, or a paradigm-shift in an area of science with a budget of £800 million.
Higher education, economy, and society in the UK
The contribution higher education makes to society and individuals can be understood in terms of both financial/economic benefits and wider “non-market” benefits.
Between 2021 and 2026, the UK’s universities will provide over £11.6 billion of support and services to small enterprises, businesses, and not-for-profits, attract £21.7 billion of national and international public funds to spend on collaborative research with businesses and non-academic organisations, and train more than 191,000 nurses, 84,000 medical specialists, and 188,000 teachers.
The available evidence suggest higher education is a rational choice for the majority of those who enter, at least in financial terms, but economic outcomes do vary depending on where a student comes from, the subject they study, their gender and ethnicity, and their socio-economic background. It has been estimated one in five graduates – or about 70,000 every year – would have been better off financially had they not gone to university.
Documents to download
Higher education in the UK: Systems, policy approaches, and challenges (3 MB , PDF)
This briefing provides information and the key issues on home education in England as well as current and past proposals for reform.
Average loan debt and the overall scale of loans have increased over time as the Government has shifted funding for maintenance and teaching to loans. This has led to concerns about the burden of debt, high interest rates and the cost of loans to the taxpayer.