Explore the argument
Why teaching loses money
A high sticker price does not guarantee that the fee covers the cost of providing a degree.
The key pointWhen a capped fee falls behind costs, recruiting another student can increase income and deepen the underlying shortfall.
The home undergraduate fee looks large when it is viewed as a single payment. It looks different when spread across teaching, assessment, academic support, facilities, regulation and the full length of a course.
The fee cap changes the arithmetic
Universities cannot simply raise the regulated price when wages, energy, construction and other costs rise. If the cash fee remains fixed, inflation reduces its real value.
Growth is not always the answer
Extra students can help where there is spare capacity. But teaching also needs staff, rooms, laboratories and support. Once those constraints bind, growth brings new costs as well as new income.
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