Uni finances under pressure despite higher student recruitment, OfS finds

University finances remain under pressure despite higher student recruitment this autumn, according to new analysis from the Office for Students (OfS). The latest report updates the OfS’s annual financial sustainability report, which was published in May 2025, and takes into account early information about the number of UK and international students who entered higher education this autumn. 

It found that acceptances of UK undergraduates through UCAS grew by 3.1% compared with the same point in 2024, below the 4.1% rise forecast by the sector. 

Larger research-intensive and medium-sized institutions accounted for most of the increase, while many individual providers failed to meet their recruitment expectations. 

International recruitment appears to have returned to year-on-year growth following a sharp fall in visa applications in 2024. Home Office data shows a 6.4% rise in the number of Confirmation of Acceptance for Studies (CAS) issued before the September intake, though visa numbers remain “significantly below” 2023 levels.

The OfS said the sector continues to face significant variation in both financial performance and recruitment patterns. Without mitigating measures, 124 institutions, or 45% of those analysed, are projected to record a deficit in 2025-26, up from 34% in forecasts submitted in May.

Philippa Pickford, director of Regulation at the OfS, said: “While increased student recruitment is positive news, this report shows the continuing challenges facing the higher education sector. 

“Universities now have welcome clarity over tuition fee levels in future years, and we also know that many institutions are continuing to take significant steps to cut costs, work collaboratively with partners and seek opportunities for realistic growth. They are also becoming more realistic and prudent in their planning, including tempering ambitions for recruitment that are too optimistic.”

She added: “But nobody should be under any illusion that the challenges that have gripped the sector in recent years have evaporated. The tough decisions many institutions have taken have certainly made a difference but we still predict that significant numbers of universities will face deficits by the end of 2025-26. A smaller proportion also face liquidity problems, with our modelling projecting nearly one in six institutions will have less than 30 days’ liquidity. 

“Some universities continue to base their forecasts on unrealistic expectations of growth, while others are taking short-term measures rather than tackling transformational changes needed to right-size their businesses. It continues to be our assessment that we do not expect multiple universities to close in the short term. But some institutions need to take radical action, which might include considering different structures or business models.”