A recent study conducted by accommodation provider Unite Group has revealed a notable shift in students’ university selection process, with many prioritising value for money over other considerations. This trend is influencing a marked preference for institutions with stringent entry requirements, while a growing number of students are opting to live at home to manage costs.
The Shift Towards High-Tariff Institutions
According to Unite Group, the UK’s most prestigious universities are witnessing a surge in applications, reflecting an increasing demand from prospective students. The research indicates that the number of 18-year-olds commencing university has reached record levels, with an overall growth of 2 per cent in new enrolments. Notably, high-tariff universities — those that require higher qualifications for admission — experienced a remarkable 7 per cent rise in acceptances.
Conversely, lower-tariff universities are seeing a decline, with a 2 per cent drop in student enrolments. This trend underscores a broader change in student attitudes towards higher education, as individuals are becoming more discerning about the institutions they choose, focusing on potential graduate outcomes and earnings.
Financial Considerations Driving Decisions
The financial implications of higher education are a significant factor in students’ choices. Unite Group has pointed out that students are increasingly aware of the economic value of their degrees. Data reveals that graduates from the prestigious Russell Group can expect to earn an average of £350,000 more over their lifetime compared to non-graduates. This financial incentive is less pronounced for those attending lower-ranked universities, prompting students to be more selective.
Furthermore, many students attending these lower-tariff institutions are now choosing to live at home, with around 50 per cent opting for this arrangement compared to just 15 per cent at higher-ranked universities. This shift is largely a response to the rising costs associated with student accommodation and living expenses.
Criticism of the Student Loan System
The financial burdens associated with higher education have drawn criticism from various quarters. Consumer advocate Martin Lewis has referred to the student loan system as a “nightmare,” particularly highlighting the issues surrounding Plan 2 loans. With the repayment salary threshold set to remain unchanged for three years following the autumn budget, many graduates may face increased financial pressures.
In light of these evolving market conditions, Unite Group is adapting its strategy to better align with leading universities. The company has begun divesting some of its properties in response to changing demand. Despite experiencing a slight decrease in occupancy rates — from 97.5 per cent to 95.2 per cent — during the current academic year, the organisation remains optimistic about the long-term prospects of the sector.
Chief Executive Joe Lister stated, “The growing domestic demand for higher education, along with improving international mobility and limited housing availability, supports the long-term outlook for the sector. Students continue to value the residential experience at university, which drives sustained demand for quality accommodation.”
Why it Matters
The evolving landscape of higher education selection carries significant implications not only for universities but also for students and the broader economy. As students become more discerning, institutions must adapt to provide value and quality that meet the expectations of the new generation. This shift towards higher-tariff universities could exacerbate inequalities in access to education, as those from less affluent backgrounds may struggle to meet the entry requirements of prestigious institutions. Understanding these trends is crucial for policymakers and educational leaders as they strive to create an equitable and sustainable higher education system.
