Scottish universities structurally reliant on cash from overseas students, MSP's say

University funding is “structurally reliant” on cash from overseas students and this revenue is set to overtake Scottish Government money as a source of funding next year, MSPs have said.

Holyrood’s Education Committee raised concerns about the “level of geopolitical and economic risk associated with this funding model”.

A reliance on cash from overseas students also risks “curtailing universities’ abilities to plan for the long-term”, the committee has told education secretary Shirley-Anne Somerville.

Carrying out pre-budget scrutiny, members of the Education, Children and Young People Committee heard how universities face a “funding gap” of between £4,000 and £7,000 in 2022-23, based on the cash they receive from the Government for Scottish-domiciled students and the cost of teaching them.

In a letter to Ms Somerville, the committee said: “Scottish universities have increasingly looked to international students and fee-paying students from elsewhere in the UK to cross-subsidise both research and Scottish-domiciled students’ undergraduate education.

“Scotland’s funding model is now structurally reliant on international fees, with this source of revenue forecast to overtake Scottish Government funding as a percentage of the sector’s total income in 2023-24.”

With the number of students at university in Scotland rising – latest statistics showed there were 282,875 in 2020-21 compared to 253,475 in 2018-19 – the committee also raised concerns about accommodation.

“While the number of students being offered a place at university has increased, the accommodation offered by universities has not kept pace,” the MSPs said.

The committee heard during its scrutiny that 12% of students in Scotland have been homeless “at some point during their studies”, with the average rent they pay often higher than the finance they receive in support packages.

The committee called on ministers to clarify where responsibility lies to ensure students have access to housing, with the Government also being urged to reveal when a review of purpose-built student accommodation will be completed.

Higher education minister Jamie Hepburn said: “The Scottish Government invests almost £1.9 billion per year in Scotland’s colleges and universities.

“This investment ensures Scottish domiciled students benefit from free tuition at our world-class universities – and in near-record numbers too, with almost 30,000 Scottish-domiciled students securing a place at a Scottish university according to UCAS data.

“International students who come to our world-class institutions make an important and valuable contribution to our economy, educational environment and society.

“We will continue to work closely with the Scottish Funding Council to deliver sustainable funding for our universities and colleges.”