UK University Financial Crisis: What It Means for Students

TL;DR

Nearly half of English universities are now running deficits, with about 90 institutions restructuring and thousands of jobs at risk. For students starting in 2026, this means potential course changes, but your student finance remains protected - up to £9,535 for tuition and £13,762 for living costs. Here’s what you need to know to plan ahead.

The Numbers Are Stark - But Your Options Aren’t Closing

If you’ve been following the news lately, you might have seen some alarming headlines about UK universities and money troubles. And honestly? The numbers are concerning.

According to the Office for Students, 45% of English universities - that’s 124 institutions - are projected to run deficits in 2025-26. Nearly one in six will have less than 30 days of cash reserves. The sector faces a combined shortfall of £1.6 billion.

But here’s what often gets lost in the headlines: understanding what this actually means for you as a prospective student in 2026. Because the situation is complicated, and the impact on your university experience isn’t as straightforward as “universities are closing.”

Let’s break it down.

What’s Actually Happening to UK Universities

The financial pressures on universities have been building for years. Tuition fees were frozen at £9,250 since 2017 while costs kept rising. International student numbers dropped sharply after visa rule changes. And the recent increase in employer National Insurance contributions added another £372 million to university wage bills.

The result? About 90 universities are currently restructuring. The Guardian reports that around 10,000 jobs are at risk across the sector, with a quarter of leading universities actively cutting staff.

Where the Cuts Are Happening

Universities are responding in different ways:

Staff reductions - Both voluntary and compulsory redundancies are happening across research and teaching roles. Cardiff University recently announced cuts to nursing courses. Hull is closing its chemistry department. These aren’t small, struggling institutions - they’re established universities feeling the squeeze.

Course changes - Some subjects, particularly in humanities and sciences with smaller student numbers, are being reviewed. Chemistry undergraduate courses have shrunk by more than 25% since 2019 across the sector.

Support services - Over half of universities have cut catering budgets, and nearly half have reduced IT spending, according to Universities UK surveys.

What This Means for Students Starting in 2026

Here’s where it gets personal. If you’re planning to start university in 2026, what should you actually be thinking about?

1. Research Your Specific Course and University

Not every university is in the same situation. Some are financially stable. Others are actively restructuring. Before you commit to a course, check:

• Has the university announced any redundancy schemes recently?
• Is your chosen subject under review or facing cuts?
• What’s the student satisfaction score for your specific department?

UniStart advisors can help you explore courses and understand which institutions are investing in the areas you’re interested in.

2. Your Student Finance Is Protected

Whatever happens with university finances, your entitlement to student finance isn’t affected. For the 2025-26 academic year, according to GOV.UK, eligible students can access:

Tuition Fee Loan: Up to £9,535 (the new rate from September 2025)

Maintenance Loan (for living costs):

• Living at home: up to £8,877
• Away from home, outside London: up to £10,544
• Away from home, in London: up to £13,762

The government has also confirmed that fees and maintenance loans will rise with inflation annually from 2026. So while you’ll pay slightly more, you’ll also have access to higher support.

If you’re an EU citizen with settled or pre-settled status, you have the same access to student finance as UK citizens. Our funding guide explains the eligibility requirements in detail.

3. Consider the Four-Intake Model

University financial pressures are partly about timing - most institutions rely heavily on the September intake. But many courses now offer January, May, and November start dates too.

These alternative intakes often have:

• Smaller cohorts (more personal attention)
• Less competition for places
• More flexibility if your circumstances change

At UniStart, we specialise in helping students find courses with multiple intake options - it’s one of the advantages of working with universities directly.

The Bigger Picture: Fees, Funding and the Future

Tuition Fees Are Rising - But So Is Support

For the first time since 2017, undergraduate tuition fees in England increased in 2025 - from £9,250 to £9,535. They’ll continue rising with inflation, potentially reaching around £9,900 by 2026-27.

This might sound like bad news, but there’s context here. The fee freeze meant universities were effectively getting less money each year in real terms, which contributed to the current crisis. The increase, while modest, provides some breathing room.

And importantly, maintenance loans rose by 3.1% for 2025-26, with further inflation-linked increases planned. Students from households earning £25,000 or less receive the maximum support.

What About Course Quality?

This is the genuine concern. When universities cut staff, class sizes can grow. When departments lose senior academics, research culture can suffer. When support services shrink, students might find it harder to get help when they need it.

The Office for Students, which regulates higher education in England, has said it doesn’t expect multiple universities to close in the short term. But it has warned that some institutions “need to take radical action” - which might mean mergers, restructuring, or significant changes to what they offer.

How to Navigate University Choices in 2026

Step 1: Start Early

Don’t wait until the last minute to research your options. University landscapes are shifting, and courses that exist today might look different by next year. Start exploring now - browse available courses and make a shortlist of programmes that genuinely interest you.

Step 2: Check Financial Health Indicators

While you can’t access detailed university accounts, you can look for warning signs:

• Recent news about redundancies or restructuring
• Course closures in your area of interest
• Student satisfaction scores trending downward
• Staff strikes or disputes about workload

Step 3: Understand Your Full Funding Package

Many students underestimate how much financial support is available. Beyond tuition and maintenance loans, you might be eligible for:

• Disabled Students’ Allowance
• Childcare Grant (for student parents)
• Parents’ Learning Allowance
• Adult Dependants’ Grant
• University bursaries and scholarships

Our funding calculator helps you understand your total package. It’s often more than people expect.

Step 4: Talk to Someone Who Knows the System

University applications can feel overwhelming, especially when the sector is in flux. That’s where guidance makes a difference. UniStart advisors work directly with universities across the UK and can help you find programmes that match your goals, circumstances, and timeline.

Pro Tip: Don’t just look at league tables. A lower-ranked university with a well-funded department in your subject might offer a better experience than a prestigious institution that’s cutting costs in that area.

The Current State of UK Higher Education

Data compiled from official sources as of February 2026

Common Myths About the University Crisis

Myth #1: “Universities will start closing down next year” ➜ The Office for Students has stated it doesn’t expect multiple closures in the short term. Restructuring and mergers are more likely than outright closures for established institutions.

Myth #2: “Student finance will be cut because of the crisis” ➜ Student finance comes from government, not universities. Your entitlement is protected by law and actually increased for 2025-26. Check your eligibility through our funding guide.

Myth #3: “Only small universities are affected” ➜ Russell Group institutions including Cardiff, Sheffield, and Queen’s Belfast have all announced job cuts. Financial pressure doesn’t respect prestige - it affects universities across the board.

Frequently Asked Questions

Will my course be cancelled if I’ve already been accepted?

Universities have legal obligations to students they’ve accepted. If a course closes, the institution must either teach you out (let you complete your degree) or arrange transfer to another provider. You won’t be left stranded, though your experience might change.

Should I delay starting university until the crisis is over?

There’s no guarantee when financial pressures will ease. Waiting means missing out on your education and career progression. The key is choosing wisely - researching stable departments and understanding your funding - not avoiding university altogether.

How do I know if a university is financially healthy?

Look for recent news about redundancies, check the Office for Students register for any regulatory notices, and read student reviews about recent changes to services. Universities must publish annual accounts, though these can be technical to interpret.

Does the funding crisis affect part-time and mature students differently?

Not directly - student finance eligibility remains the same. However, part-time provision has seen cuts at some institutions as universities focus on more profitable full-time courses. Research part-time options carefully and consider multiple universities.

Can EU citizens still get student finance during this crisis?

Absolutely. EU citizens with settled or pre-settled status have the same entitlement as UK citizens - this is protected by the EU Settlement Scheme and isn’t affected by university finances. Our advisors can help you understand your funding options.

What Should You Do Now?

The university funding crisis is real, but it’s not a reason to abandon your plans for higher education. It’s a reason to plan smarter.

Universities that are struggling financially are making changes - some painful, some necessary. But education continues. Students are still enrolling, graduating, and building careers. The system isn’t collapsing; it’s adjusting.

Your job is to be informed. Understand which universities are investing in your subject area. Know your full funding entitlement. Have backup options. And get guidance from people who understand how the system works.

Ready to explore your university options?

👉 Download the UniStart app to browse courses with January, May, September, and November start dates - and see your personalised funding estimate.

👉 Want to talk through your situation? Request a callback from a UniStart advisor who can help you navigate the current landscape.

“University finances might be in the headlines, but your educational goals don’t have to be on hold. Understanding the situation - and your options - is the first step to making the right choice for you.” - Radu Danila, Founder, UniStart