A deserted view of the Bridge of Sighs and New College Lane, Oxford
Oxford university’s endowment fund has £3.4bn of assets under management © Christopher Furlong/Getty 

British universities may top the global league tables but their book-balancing skills are less impressive. Most spend more than they bring in. Last year the aggregate deficit weighed in at £3.5bn, according to data from the Higher Education Statistics Agency.

Step one to closing that gap was to woo more international students, particularly from outside the EU. These customers, such as the 120,000 who came from China last year, typically pay at least double the fees of their British peers. All told, international students bring in over £6bn a year to universities, approaching one-fifth of their income. 

Coronavirus looks set to staunch that income stream, spooking international students who hastened home when the outbreak took hold across the world. Universities UK, the main sector body, expects the virus to have a “significant” impact on this year’s recruitment and admissions for international students. Universities in other popular global hotspots like the US and Australia will be similarly affected.

The pain will not be spread equally. Among the most exposed, University College London, renowned for law and medicine and especially popular with Chinese students, last year earned twice as much from non-EU overseas students as it did from British ones; at Glasgow University it was approaching threefold.

Lex chart on UK universities

Unlike their American peers, British universities have never really got their act together on endowments: only Oxford and Cambridge raised more than £100m last year. Oxford’s endowment fund has £3.4bn of assets under management. It returned an annualised 9 per cent over 10 years to the end of 2018. Harvard’s fund, 10 times as big, has exceeded 11 per cent each year since it began. 

But Americans cannot afford to be too smug. Chief executives, auditors and bankers are generous donors; they may curb that largesse as coronavirus-induced cuts to remuneration and nixed dividends crimp their own income. Investment income will likewise be pummelled. Universities are being corralled into the global effort to overcome the virus. Many labs, devoid of students, are being repurposed as testing centres. Academics are helping with the search for a vaccine. Like much of the private and public sector, universities are going to need financial help too.

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