There is a continuing increase in the numbers of students going into higher education
New research suggests that a boom in the number of young people, combined with a continuing increase in the numbers of students going into higher education indicates that at least 300,000 more places will be needed at English universities.
The study, published by the Higher Education Policy Institute (HEPI) warns that if demand continues to rise, this will put more pressure on the public purse, and a cap on student numbers may need to be reintroduced.
It says that between 2010 and 2016 there was a 5.5 per cent increase in undergraduate numbers despite a decline in the number of 18-year-olds.
This decline in the population is due to halt next year, and over the next decade, the 18-year-old population in England is set to rise by nearly 23 per cent.
This analysis has serious implications for higher education policy
If this was the only factor, demand for degree courses would rise by around 50,000 places by 2030, the study says.
But at the same time, the participation rate - the numbers of young people aged 20 and under going into higher education - has increased by nearly 25 per cent since 2006.
The study calculates that if participation also increases over the next 12 years at the same rate as the average of the last 15 years, then there could be an overall rise in demand of 350,000 full-time places by 2030.
It does say that the main factor that could have a negative impact on demand is Brexit, which, unless arrangements are made that will maintain demand from EU students, could mean that numbers reduce by around 56,000.
This means that the most likely outcome is that by 2030, a net increase of around 300,000 full-time places will be needed.
It also says that if there is a rise in participation by certain groups of students – such as men, who are currently less likely to go to university than women, and poorer students – which is unlikely to happen in the foreseeable future, then this could lead to a rise in demand of over half a million new degree places.
Under the current system, home and EU students going to English universities pay up to £9,250 a year in tuition fees, and can get government loans to cover the cost.
Students pay back the loan once they are earning £21,000 a year, with an interest rate of up to around 6 per cent.
Theresa May announced last autumn that in future, graduates will not begin repayments until they are earning at least £25,000, and launched a review of higher education last month.
The study says: "This analysis has serious implications for higher education policy.
"Present arrangements imply an open-ended government cheque book since recruitment is unconstrained, and each student recruited is entitled to a loan that is subsidised (and, since the Prime Minister's intervention in October 2017 more heavily subsidised) by taxpayers.
"A driver of the review of post-18 education that has recently been established is concern over the high cost to graduates of loan repayments. It is difficult to see how that will be addressed without additional government expenditure.
Theresa May launched a review of higher education last month
"But even if the circle is somehow squared by requiring some graduates to pay more in order to enable the Government to provide additional subsidy to others, the need for government subsidy for 300,000 additional students makes it highly unlikely that the present open-ended government cheque book can be maintained.
"Some form of control over student numbers is likely to be required, especially if the subsidy for those who do participate in higher education is to be maintained, let alone increased."
HEPI president and report author Bahram Bekhradnia said: "Given the fact that each new student recruited (with few exceptions) represents increased demand for government-subsidised student loans, it is difficult to see – under the current finance model – how the policy of uncapped student recruitment can continue.
"This is particularly pertinent given the constraints on public expenditure and the absence of any suggestion from the Treasury that more money will be available for higher education in the future."