Universities brace for a devastating blow to finances as revenue dries up


Ul president

Prediction: University of Limerick president Des Fitzgerald expects first-year third-level students won’t able to start until October

Universities are bracing themselves for combined losses of hundreds of millions of euro as a direct result of Covid-19.

The sector is in talks with the Department of Education and the Higher Education Authority (HEA) to evaluate the full financial cost, with a bleak picture emerging.

Many colleges have already racked up losses with rent refunds to students for campus accommodation following the shutdown on March 12 - but that is only the start.

Universities fear a massive drop of up to €240m in fees from international students and that is only one revenue stream facing a hit.

International students pay significantly higher fees than Irish and other EU students, and are an increasingly important source of income for the sector.

Arising from the financial crash a decade ago, core government funding to the universities for day-to-day running costs is 43pc lower than it was in 2008.

Against that backdrop universities in particular have grown their non-Exchequer funding streams, many of which are now threatened by the Covid-19 fallout.

The seven traditional universities, under the umbrella of the Irish Universities Association (IUA), enrol at least 17,000 international students a year, who pay €300m in fees.

The IUA estimates up to 80pc of that income will be lost in 2020-21 because of "a serious risk that the Covid-19 restrictions will not have been lifted in time or the influx of next year's students".

An IUA spokesperson said: "A downturn of that magnitude would have a devastating effect on the finances of our universities."

As well as fees, international students spend about another €100m a year in the economy so their absence would be a double financial whammy.

The seven IUA members account for 70pc of international students. At University College Dublin and Trinity College Dublin more than 20pc of the student cohort is international.

The IUA figures do not include the Royal College of Surgeons in Ireland, where more than half of the student intake is from non-EU countries.

The potential collapse of the lucrative international student market is only one aspect of university finances where heavy losses are being anticipated.

Another cohort of students affected by travel restrictions are graduates from other EU countries who come to Ireland for taught masters programmes and pay significant fees.

On-campus student accommodation in universities, which is rented out to tourists over the summer, is also a valuable source of income but that cannot be marketed in the current circumstances.

Events such as conferences are also important money-­spinners, but such opportunities have been closed off by the Covid-19 restrictions.

Meanwhile, University of Limerick president Dr Des Fitzgerald has predicted that it could be late October before first year students enter college this year.

In a letter sent to staff and students, Dr Fitzgerald was reflecting on the new timeframe for the Leaving Cert, in which he also stated he hoped that current and postgraduate students would return in September.

But he added: "Ultimately, the timelines will depend on progress in controlling the pandemic."

Source: Irish Independent