source: Unsplash
The higher education watchdog Office for Student (OFS), has given an emergency loan of £900,000 to a university this summer to help it get through a financial crisis.
The anonymous university was running out of money and couldn’t pay its bills. The regulator says the university, a small-scale, modern institution has repaid the money, and now has a stable grasp on its finances.
This calls attention to the fragility of university finances, and how they are now in a “marketplace” according to the BBC. Universities are vulnerable to the ups and downs of recruitment with possibilities of a decrease of increased tuition fee income.
This affair puts OFS in an embarrassing situation. They gave a strong statement saying that there would be no bailouts for universities as the chairman of the regulator, Sir Michael Barber, told a conference that it was wrong for universities to think those who had financial problems due to insufficient student numbers or overspending on constructions would get financial help.
The watchdog declares the bailout was given out under the rules, tradition arrangements of its predecessor organisation, the Higher Education Funding Council for England.
Now a spokesman from the OFS said they are under new rules now, and the financial support would no longer be in place.
It raised the question of whether universities should be allowed to collapse from financial dilemmas.
It will put the watchdog and Department for Education into a tricky position if they let major universities go bust. Many have questioned how they allowed students to apply to go to universities the OFC knew had financial warnings.
Since the majority of students are going to take debt from a degree, the OFS, considering the consumer interest, would be expected not to let students go to a university that has a financial problem.
But if the ministers from the Department for Education or OFS warn people a university is in financial difficulties, that will put it even more in danger regarding student numbers as a significant part of a university’s income are newcomers.
Nevertheless, the OFS claims its new provisions will make the higher education sector financially stronger, as they will make sure the universities who register with them are secure in finance.
Related Stories
Words: Ai Chi I Subbing: Sorcha Gilheany