Income of Irish universities will drop by around €250 million in 2020/21, the Parliamentary Budget Office (PBO) has announced.
In a report on the financial implications of the coronavirus pandemic for Ireland’s university sector, the PBO estimated that the net cost of the pandemic for the sector in 2019/20 would be approximately €83 million and €245 million in 2020/21 – a total of €328 million over the two years – with the drop in international students being a major contributor to the loss.
“Universities are facing significant additional costs arising from the pandemic”, the report says. These costs include transition to remote learning and the provision of additional student supports, as well as investment in personal protective equipment (PPE) and losses in key revenue sources as a result of the administrative restrictions imposed in response to the crisis.
It is projected that €104 million will be lost in income in 2019/20. Of this, 69 per cent relates to losses in commercial revenue, 23 per cent relates to losses in research grants and contracts, while 7 per cent relates to a loss in tuition fee income.
Meanwhile, for 2020/21, an income loss of €244 million is predicted. A fall in commercial revenue – gym fees, student accommodation, catering activities and cultural attractions – represents 26 per cent of the loss.
Some 64 per cent relates to a loss in fee income from international students alone. According to the report, non-exchequer fees – paid by international students, mature students, and EU postgraduate students – are the “largest single source of income for universities”.
“Following the reductions in public spending on third level education that were introduced during the last economic and fiscal crisis, Higher Education Institutes have diversified their revenue streams, with non-EU (or international) student fees and commercial revenues accounting for a larger portion of their annual incomes”, the report says.
“For every €1 received in Exchequer fee income, universities received approximately €2.80 in non-Exchequer fee income”, it adds. This mostly consists of the fees paid by international or non-EU students, EU postgraduate students and mature students.
“The loss in tuition fee income, as projected, will likely have financial implications for the sector beyond 2020/21”, the report adds, “as students enrolling in that year would likely have enrolled for two to three additional years, depending on the duration of study”.
The projected impact does not take into account the Government’s announcement of coronavirus related supports for the sector, which are expected to reduce the impact of these losses. To date, €209 million has been announced by Government in coronavirus related supports for higher education.