Universities and Brexit

A first-class mess
http://www.economist.com/news/britain/21702505-academics-fear-drying-up-students-and-money-first-class-mess?
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Academics fear a drying up of students,

and money
Jul 23rd 2016 | From the print edition

MOST economists were against the idea of Britain leaving the European Union. But perhaps few felt so strongly about it as the
economics lecturer at Cambridge University who, following the referendum on June 23rd, turned up to a faculty meeting unclothed
with Brexit leaves Britain naked daubed across her torso. Although the form of protest was unusual, the feeling it expressed was
not: in a poll conducted prior to the vote by Times Higher Education, a trade paper, nine in ten university staff said they would vote
to Remain. At University College London (UCL), where one in ten students comes from the EU, the mood after the result was one
of deep shock, grief and then concern, says Michael Arthur, the universitys president.

British universities are home to students from all corners: Europeans make up 6% of the total; another 14% come from the rest of
the world. As a result of EU rules, the former are treated like home students, meaning that in England their fees are capped at
9,000 ($11,900) a year and they have access to state-provided loans. By contrast, there are no limits on fees for students from
the rest of the world. A geography degree at Oxford, as taken by Theresa May, costs non-EU students 22,430 a year.

Jo Johnson, the universities minister, has confirmed that students from the EU starting their courses in September will continue to
have access to government loans and capped fees. If, as expected, that remains true in 2017-18, there may even be a surge in
the number of EU applicants as potential students rush to take advantage of the support while they still can, says Emran Mian,
director of the Social Market Foundation, a think-tank.

But life will soon get trickier for universities. The big issue is whether EU students will continue to have access to loans, says Mr Mian. It may
be politically difficult to justify offering them such support. It is an expensive policy: it is estimated that nearly three-quarters of students will
never repay their loans in full, since outstanding debt is forgotten after 30 years. Withdrawing the loans from EU students, however, would
risk a big drop in their number. Mr Arthur worries that it could cause a 50-75% fall in the number of EU students at UCL.
Others point out that under such a scenario universities probably would be free to charge higher fees to EU students, as they currently do for
non-Europeans. That may help, says Richard Shaw, head of education at Grant Thornton, an accounting firm, but it seems unlikely that any
increase in fees would be sufficient to make up for the fall in student numbers. Those numbers could drop further if foreign students are put
off by the referendum result, which some have interpreted as a sign of hostility towards migrants in general.

Daily chart: Britain votes to leave the European Union

Brexit comes at an awkward time for universities. Many have borrowed money to fund expansion, following the governments decision in
2013 to lift the cap on the number of students that English universities were able to accept. Some might now find their new lecture halls less
full than they had hoped. Raising funds will get harder, too: on June 29th Moodys, a ratings agency, lowered the outlook of six of the seven
universities it monitors; post-Brexit the EUs European Investment Bank may also stop dealing with British institutions.
Support for academic research is another area of concern. EU funding follows research quality, meaning that Britain receives a hefty share of
the kitty (63% more than it contributed, in 2007-13). It may be that Britain is able to negotiate continued access to European funding, perhaps
in return for offering financial support to European students, speculates Mr Arthur. But it is unlikely to be able to continue to sway it in the
direction of excellence rather than need. There are already reports that British academics have been asked to take their names off
applications for funding, owing to uncertainty over whether they will remain eligible, and that some foreign academics are reluctant to take
jobs in Britain.
Most countries do all they can to lure students from around the world, including seeking to attract the best lecturers. That is sensible: some
students stick around, boosting the economy; others return home with fond memories of the country where they spent their early adulthood.
All of them pay for the privilege. Immigration restrictions on non-EU students have already done considerable harm to higher education. It is
likely that British universities will suffer once again.