The results will be felt differently across the sector, but any significant reduction in the EU student community of 125,000 plus could have a substantial impact on many institutions. Beyond the EU, Brexit also has serious potential to deter other international students from UK study, which could quickly become catastrophic for university budgets.
The disruptive force that is Brexit will require new ways of operating. It may also present several opportunities. How quickly and effectively HE leaders respond to the challenge could determine the success or failure of more than just their international recruitment.
The size of the exodus of EU students from the UK is not easy to determine at this stage, but early signs suggest it could be big. Before the Brexit vote, president and provost of University College London Michael Arthur predicted a “70-80% drop in EU students” if the UK decided to leave the EU.
A survey subsequent to the referendum indicates one in three prospective international students (including and beyond the EU) would be less likely to choose the UK as a result of Brexit.
Feedback from prospective students has also noted the powerful and unwelcoming symbolism of Britain’s decision, pushing them to look to study in countries more open to overseas students.
Beyond the symbolism, Brexit could effectively make EU students a subset of the broader international student demographic, with the higher fees and cost of credit that comes with it.
The impacts of Brexit will place UK institutions in a new and much less comfortable position. UK universities will face greater competition from institutions in the EU and globally. They will also be confronted by unsettled pricing structures. Finally, a post-Brexit environment will boost the need for universities to distinguish themselves in the market and present a coherent, attractive offer.
So, given the disruption and new market dynamics, how can UK universities head off a potential exodus of EU students?
A successful response will need to improve the actual and perceived student offer in three ways:
Universities will need to get their pricing strategy right – in alignment with their value proposition. If UK institutions are competing alongside all other non-EU international universities, price will be a powerful signal of quality, prestige and value. But because the HE market is unique, the right pricing strategy requires an understanding of different market forces and how to control various levers of price.
A sensible pricing strategy would combine an assessment of the likely (or at least possible) post-Brexit funding environment. It would also assess the upside for the university and potential competitor responses.
Behind-the-ticket-price levers can also add nuance. For example, a high published price does not necessarily translate to a high real price, because scholarships and discounts can be applied.
A second way to succeed in an increasingly competitive environment is to optimise the structure of courses that are offered to tell a powerful story to prospective students and the market more generally. This can be on a small scale – a review of courses – or it can be a comprehensive reshaping of the portfolio of degrees and courses – a transformation of the course architecture.
A finely tuned course architecture simplifies a university’s pitch to prospective students. For instance, universities gain an edge from deeply understanding research strengths, and how the course portfolio can leverage these to create a compelling and differentiated value proposition in specific areas. A similar thing can be done with connections to industry.
Finally, UK universities may need to hold the mirror up when it comes to student experience. With a new level of global competition, crafting an excellent student experience will be as important as articulating it to the market.
Britain leads the world in student experience. While many universities have worked hard to build an exceptional experience, some universities are behind the pack. And the rest of the world will continue to work hard to catch up.
Perhaps more importantly, UK universities must be in a position to articulate their excellence. This can consist of both lifting the profile of student experience in an international student marketing strategy, but also targeting the message.
We know students from different regions value different things. In a more competitive post-Brexit environment, successful universities will identify their prospective international student markets and target their message.
In Australia, the HE sector has also undergone significant transformation and competition for undergraduate and post-graduate students is fierce. In this environment, first-move universities have made large leaps by accelerating their strategic positioning in these three areas.
We saw it work with a university struggling with student retention that turned around the student experience and in turn generated a £2.3m benefit. Course review and optimisation has also paid dividends for a Group of Eight university that increased their surplus from 2.5 to 6.5 per cent within a year of optimising their course architecture. Another is on track to create surpluses large enough to increase the workforce by 20 per cent.
In a rapidly transforming market, there are just a few levers available to a university’s executive team that have the ability either to attract students, control costs, or both. Focusing on pricing strategy and course architecture and student experience can do just this. As universities prepare for the new post-Brexit market place, it will be those that quickly and effectively take control of the wheel that will accelerate their advantage on competitors both here and further abroad.