Covid-19 and third-level education
A total income loss of €348 million is forecast across universities in Ireland in the academic years 2019/20 and 2020/21, with 46 per cent of that loss due to a fall of fee income from international students, a government report has found.
The report, published by the Parliamentary Budget Office, focuses on Covid-19’s impact on third-level education in Ireland. It states that all seven universities are projecting deficits across both the academic years 2019/2020 and 2020/2021.
Income loss of €104 million is projected for the academic year 2019/20 across the Republic’s seven universities, the “vast majority” of which stems from losses in commercial revenue, which accounts for 69 per cent, with 23 per cent being losses in research grants and contracts and 7 per cent relating to a loss in tuition income. Further losses of €244 million are projected for the academic year 2020/21; 71 per cent of this projection comes from loss of tuition fee income, 64 per cent being from loss of tuition from international students alone. Decreases in other commercial revenue account for 26 per cent.
Cumulatively, total income losses of €348 million are projected across the two years combined, with 46 per cent of that accounted for by loss of tuition fee income from international students, a total of €160 million. €135 million, or 39 per cent, is accounted for by loss of other commercial revenues. Other commercial revenues are broken down into further subcategories: student accommodation (losses of €23.5 million and €13.5 million in 2019/20 and 2020/21 respectively); visitor attractions (€11.5 million and €6 million); summer schools (€6 million and €4 million); conferences and events (€6 million and €2 million); sport centres/gyms, catering, professional education, shops, etc. (€15 million and €28.5 million); and endowment income, philanthropic income, etc. (€10 million and €10 million).
The report also notes that the “loss in tuition fee income, as projected, will likely have financial implications for the sector beyond 2020/21, as students enrolling in that year would likely have enrolled for two to three additional years, depending on the duration of the study”. The Irish Universities Association has suggested that some of these costs could be compensated via business interruption insurance claims and through payments for the provision of facilities and services from organisations such as the HSE during the pandemic, although the report says that the former is “highly uncertain”.
From an expenditure point of view, there are projected savings of €19.5 million for the academic year 2019/20, split between pay at €2.9 million and non-pay at €16.6 million. €1.7 million in additional spending is projected for the academic year 2020/21, again split between €0.5 million of pay and €1.2 million of non-pay. Overall, the net cost of Covid-19 for the seven universities is projected to be €83 million for 2019/20 and €245 million in 2020/21, a total of €328 million over the current and just gone academic years.
A total deficit of €292 million over the two years, €67 million in 2019/20 and €225 million in 2020/21, is projected. These figures do not take into account the funding pledged to the sector by the Government in response to the pandemic. However, with €209 million in aid pledged so far, loss figures suggest these aid figures will be required to increase.
