Three universities on the brink of bankruptcy and more reliant on short-term loans

At least three universities are teetering on the brink of bankruptcy, with growing numbers of institutions resorting to short-term financial loans “just to survive”, i News can reveal.

“A university going bust is more likely than at any other point in the last generation,” Nick Hillman, director of the Higher Education Policy Institute think tank and a former adviser to universities minister Lord Willetts, said.

“What is of concern is those universities that are resorting to taking bridging loans to tide them over until their student fees come in. They are borrowing just to survive,” Hillman warns.

i understands that a university in the North West and two on the South Coast are facing serious financial difficulties, with one already in talks with insolvency lawyers.

The removal of the cap on the number of students universities can accept and the trebling of tuition fees has led to frenzied competition within the sector to attract students.

Matt Robb, an education specialist for management consultancy EY Parthenon, said conditions had become much more difficult for universities. “I would say there are about three or four universities where it is possible [they could go bankrupt],” Mr Robb told i. 

Matt Waddup, head of policy and campaigns at the University and College Union, warned that a university going under would be “devastating” for a local region.

Read more Three universities on the brink of bankruptcy and more reliant on short-term loans

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