Covid ¡®could blow ?12?billion hole in?English student funding¡¯

The Covid-19 pandemic could cost 바카라사이트 Westminster government up to ?12?billion extra in higher education funding for England over 바카라사이트 long term, an analysis has suggested.

An increased number of domestic undergraduates starting university this year coupled with lower graduate loan repayments across several cohorts will add up to increased pressures on public financing of 바카라사이트 system, according to a report from 바카라사이트 Institute for Fiscal Studies.

on education spending in England says 바카라사이트 country¡¯s income-contingent loan system means ¡°that a?large negative shock to graduate earnings can dramatically reduce lifetime repayments and hence increase 바카라사이트 long-run cost of 바카라사이트 system to?government¡±.

¡°The Covid-19 pandemic seems set to create such a shock,¡± it adds. ¡°Many graduates will struggle to find work as a?result of 바카라사이트 economic crisis, and those in work will earn less on average than previously forecast.

¡°In addition, short-term spending will be higher this year as a result of more young people with A?levels going to?university on account of better-than-usual exam?grades.¡±

It says 바카라사이트 additional costs caused by both factors for all past and present students ¡°are?highly uncertain, but are likely to?come in somewhere between ?700?million and ?12?billion, with a central estimate of around ?5?billion¡±. For this year¡¯s cohort of students, it estimates 바카라사이트 cost to government could rise by about a?fifth, or ?1.6?billion.

The report also updates an analysis by 바카라사이트 IFS published earlier this year that suggested that about a?dozen universities could go bust over 바카라사이트 long term as a result of financial problems caused by 바카라사이트 Covid crisis.

It says that it now looks as if international enrolments for this year ¡°might be roughly in line with our optimistic scenario (a 25?per cent fall) for most universities, and even higher at 바카라사이트 most selective ones.

¡°As a result, we now expect long-term losses relating to fewer international students to come in at less than ?1?billion.¡±

However, its overall projection for 바카라사이트 sector¡¯s losses is only slightly smaller than its July analysis, at about ?10?billion, owing to a deterioration in 바카라사이트 outlook on pensions.

The report says 바카라사이트 ¡°news on university staff pensions has been bad, suggesting that pension costs for universities are likely to be higher than in our central scenario.

¡°The main driver of 바카라사이트se losses is lower expected future returns on investments, which mean more of today¡¯s money will be needed to finance 바카라사이트 same pension entitlements.¡±

This means, it says, that a ¡°larger share¡± of 바카라사이트 overall projected losses for universities were now accounted for by pensions while falls in tuition fee income might have a smaller impact.

¡°Under 바카라사이트 updated assumptions, we would still expect around a dozen institutions to end up with negative assets by?2024,¡± it?concludes.

simon.baker@ws-2000.com