More than four in 10 universities in England are expecting to fall into financial deficit by this summer, according to a new report from the Office for Students (OfS), the regulator for higher education institutions.
The report reveals that 117 out of 270 institutions (43%) registered with the OfS anticipate ending the financial year in deficit by the end of July.
This marks the third consecutive year of worsening financial conditions for the sector, it said, adding that universities have been closing courses, laying off staff, and selling buildings.
However, the OfS has stated that "significant reform and efficiencies" are still needed to stabilize the sector's financial outlook.
A sharp decline in international student numbers has been identified as the main driver behind the financial downturn.
Numbers were nearly 16% lower than expected last year, a shortfall largely attributed to visa policy changes introduced in January 2024.
Universities UK (UUK), which represents 141 institutions, described the findings as "deeply sobering."
The report also highlights the growing dependence of universities on higher tuition fees from international students, as fees from UK students have not kept pace with inflation.
Financial projections suggest that more than half of tuition fee income growth through to 2028 is expected to come from international students — a forecast the OfS warns may be overly optimistic.
