Universities are warning they may be forced to cut hardship support for struggling students and scale back outreach programmes for disadvantaged groups as a deepening funding crisis pushes vice-chancellors towards redundancies, mergers and course closures.
A confidential poll of university leaders by Universities UK (UUK) has laid bare the extent of the financial squeeze, with more than two-thirds prepared to impose compulsory redundancies if difficulties persist over the next three years and nearly 90% looking at hiring freezes or voluntary redundancies. More than half said they would cut access and outreach activities, while nearly a third said they would reduce hardship funding for current students.
The warning comes at a time when record numbers of students are living at home and taking on paid work to cope with rising prices, and experts say any further withdrawal of support could lock disadvantaged young people out of higher education entirely.
Funding crisis driving cuts to student support
The financial turmoil facing UK universities stems from a combination of pressures: undergraduate tuition fees frozen in cash terms while inflation soars, rising energy and pay bills, and a drop in income from international students following tighter immigration rules. Nearly half of all universities are projected to operate at a deficit in the 2025-26 academic year, according to sector analysis. The UUK survey, conducted in March and April 2026, revealed that vice-chancellors see cuts to student-facing budgets as a potential lever if the situation does not improve.
Vivienne Stern, UUK’s chief executive, said: “If we want to retain world-class universities that deliver for students, employers and the economy, a serious conversation is needed about how degrees are funded and whether the governments’ share matches the value universities deliver for society.”
Tuition fees for domestic students are set to rise with inflation from the 2026-27 academic year, but sector leaders argue this merely maintains the current real-terms value rather than addressing the historical erosion caused by the freeze. Meanwhile, maintenance loans — the government support students rely on for living costs — are also due to increase in line with inflation from the same date. But Martin Lewis, the consumer finance expert, has warned the rise is “still not enough” to cover actual costs. Analysis shows that students in England were up to £1,906 worse off in the 2024-25 academic year compared with if maintenance support had kept pace with inflation, forcing many to work longer hours or rely on food banks.
Impact on disadvantaged students: ‘pulling up the ladder’
The prospect of cuts to hardship funds and outreach programmes has drawn sharp criticism from campaigners, who say the burden would fall hardest on those already struggling to stay at university. Katy Hampshire, director of programmes at the Sutton Trust, which campaigns for fairer access to education, warned that cutting hardship support could dramatically affect the lives of the poorest students.
“They’re more likely to have skipped meals to save on food costs, and missed lectures or deadlines to undertake paid work,” Hampshire said. “They also graduate with the highest levels of student debt compared to their more affluent peers. This is fundamentally unfair. Cutting hardship support would hit those with the least financial support hardest, and risk undermining their ability to succeed once they reach university.”
She added that cutting work on participation and outreach “risks widening access gaps between the most and least affluent young people that universities have spent years trying to close.”
Professor Lee Elliot-Major, a social mobility expert at the University of Exeter, framed the potential retreat as a generational injustice. “A retreat from access and hardship funding risks pulling up the ladder on a whole generation at a time when growing numbers of students are facing unprecedented financial pressures and increasing uncertainty about the value of a degree,” he said. “It would represent a huge waste of human potential at precisely the moment the country can least afford it. We’re in real danger of returning to an era in which university once again becomes the preserve of those advantaged enough to afford it.”
The scale of student debt adds to the pressure. The average UK student debt reached approximately £45,600 in 2022-23, while English graduates who completed courses in 2024 carried an average of £53,000. Under Plan 2 loan terms, balances can double or triple over time because of high interest rates. Beyond official loans, students are also accumulating “hidden debts” to universities — unpaid accommodation and support loans totalling nearly £500 million across the UK.
Alex Stanley, the National Union of Students’ vice-president for higher education, said: “For the students, this comes alongside maintenance loans that haven’t kept in line with inflation while their costs, and their debts, continue to grow at astronomical rates.” The NUS has campaigned for the reintroduction of maintenance grants, a move the government has now announced for the most disadvantaged students in England.
Job losses, mergers and course reductions
The vice-chancellors surveyed said cuts could occur across the board if financial conditions worsen, including to research, buildings and maintenance, and that many are considering mergers or partnerships. An estimated 30,000 jobs have already been lost across UK higher education over the past three years, and nearly half of universities have reduced their course offerings through consolidation or closures.
Earlier this month King’s College London announced it will absorb Cranfield University, the technology and management postgraduate institution based in Bedfordshire, in a move that signals growing consolidation. The two institutions aim to create a new UK “super-university” by August 2027. The Universities of Kent and Greenwich are also in the process of merging. Nottingham University has announced plans to cut around 600 jobs, while Sheffield University is considering cuts to its chemistry department. Staff at London South Bank University have voted to strike over planned job cuts.
Jo Grady, general secretary of the University and College Union, said: “Mergers and takeovers are not a solution to this crisis, they are a symptom. The governments and vice-chancellors now urgently need to listen to university staff, invest in jobs, shore up capacity and re-establish the UK as a global higher education leader.” The UCU has also advocated for an “education levy” on businesses to provide a new stream of funding for universities.
Funding for the UniConnect programme, which supports disadvantaged students in accessing university, has been significantly reduced, compounding fears that the access gap will widen. Staff across the sector have reported increased workloads and anxiety, affecting teaching quality and research output.
