Universities' Financial Risks: A House of Cards?

0:00On April 8th, a new report from the Higher Education Policy Institute blasts many English universities for wild financial risks that could sink not, just them, but the whole sector. They're borrowing heavy, exploding student numbers, leaning too hard on international kids, and franchising courses like crazy, all chasing fees over. Smarts? Take Canterbury Christ Church University, which nearly tripled its size in a decade, or private art in university that ballooned more than 30 times. Over. Then there's Northampton, with debts hitting 137 percent of its yearly income, thanks to a $330 million pound, campus bond backed by the Treasury. Oh, and they're handing out first-class degrees like candy up to nearly 30 percent now, to lure more students. The sector's hurting bad, with half the institution's running deficits. International enrollments dropping from tough visa rules and unislashing. Jobs and programs left and right.

1:00Overcrouted halls and no housing for kids show their biting off more than they can chew. The report pushes fixes like, capping student growth at 5 percent a year, forcing capital buffers and liquidity rules, plus a teaching cap so they don't overload staff. It wants standardized grades too. No more than 15 percent first, 35 percent two ones, same for two twos, and 15 percent thirds too. Keep it fair. UNICEUK calls for government cash to steady the ship, while the Department for Education says schools handle their own dough, but they're eyeing, reforms to rebuild this powerhouse of opportunity, time to regulate before the House of Cards falls.