University fees and a recession?

April 28, 2012 12:00 am Published by Leave your thoughts

The rise in university tuition fees is old news to all, and was a focal point of 2010. The first and infamous set of student protests occurred when I was in my second year of university, and I missed the tuition fee rises by a good few years, but I still felt the bitterness that high school and sixth-form students were no doubt feeling.

Whenever I say that I don’t believe in the recession, I feel like some sort of conspiracy theorist, yet considering the vast scope of our economy even at a base level makes me too sceptical to believe that the recession is anywhere near as large as it is made out to be, if not completely non-existent. One such example is the amount of revenue that universities generate.

The university I studied at, Staffordshire University, boasts an impressive 16,000 students across its four campuses (1), the majority of which are concentrated on the Stoke-on-Trent campus at which I studied. My course cost me just over £3,300 per year, costing a total in excess of £10,000 over the three years I studied there. Yes, Student Finance funded my course, but the university received its money nonetheless, and Student Finance will undoubtedly get its money back.

Now, certain courses will differ in cost, but let’s take £3,300 per year as a base cost for everyone at Staffordshire University, for the sake of example. 16,000 students paying £3,300 a year generates £51.2m for the university, in just one year. With most courses lasting three years, the university will therefore generally receive £153.6m from one generation of students. The actual amount will of course be different, given the differing prices of certain courses, the differing lengths of certain courses, and the fact that I rounded down the amount I actually paid to the university. Of course, some students will drop out and not pay a full three year’s amount, but the figure of £51.2m a year that I speculated will almost certainly be lower than the true figure.

Out of that £51.2m that the university earns in a year from tuition fees, the amount that goes back to the government indirectly through things such as income tax from lecturers’ wages, electricity and energy bills from running the campus, stocking student union shops and bars etc, can’t be a small sum. The amount of products that the university also has to invest in is quite hard to imagine, and the amount of tax that those products generate must be a considerably large amount. In regards to how much money goes directly back to the government from a university’s earnings in tuition fees I’m not sure, as most are public universities, but governments must take a cut from tuition fees I assume.

It must also not be forgotten that the figure of £51.2m per year only applies to Staffordshire University, one out of 89 official universities in England alone, and one out of 115 official universities in the UK (‘official’ being those that are classed as ‘universities’ rather than ‘higher education institutions’) (2). Multiplying 51.2m by 115 would be ignoring the fact that several other universities are considerably more expensive than Staffordshire University (Oxford, Cambridge, UCL etc), but just for the sake of example, that figure would be £5,888,000,000.

This incredibly large sum of money is only a speculation based on university income, one facet of revenue for our economy. Not only that, but the 2012/2013 academic year is when the tuition fee rises take place, generating considerably more income for universities.

It baffles me when I walk into a recently-built Tesco megastore and try to comprehend how much money it must take them to maintain the store, and how much it must have cost them to build the store. And it baffles me that there is still enough money floating around for bankers to be able to have multi-million pound bonus pools. And as said, I find it incredible that universities alone generate thousands of millions of pounds. But we’re still in a recession though, right?

(1) Staffordshire University information page
(2) Amount of universities across the UK


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This post was written by Sam Hunt

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