The HEPI Report Highlights Urgent Challenges for English Higher Education
The Higher Education Policy Institute (HEPI) has released a new analysis warning of significant risks to English universities stemming from falling numbers of young people and aggressive recruitment tactics by some institutions. Published on 28 May 2026 as HEPI Report 201, the study by Bahram Bekhradnia examines how demographic shifts after 2030 could reshape the sector unless action is taken.
England’s higher education system relies heavily on domestic undergraduates, with 18- to 20-year-olds accounting for around 80 per cent of entrants. The report projects a sharp drop in this age group once the current growth phase ends, leading to an overall reduction in home undergraduate income of nearly 20 per cent by the late 2030s if participation rates remain flat.
Understanding the Demographic Shift in England
England has experienced a period of rising numbers of 18-year-olds in recent years, supporting modest growth in university applications. However, official population projections show this trend reversing after 2030. The 18-year-old population is expected to decline by approximately 17 per cent between its 2030 peak and 2040.
This change matters because the majority of undergraduate places are filled by young domestic students. Without a sustained rise in the proportion of young people entering higher education – something the report notes shows no current sign of happening, and may even be reversing – universities face a smaller pool of potential home students.
Strategic plans at many institutions still assume continued growth or stability in student numbers. The HEPI analysis argues this optimism does not reflect the demographic reality ahead.
Predatory Recruitment Practices Among Higher-Tariff Universities
Over the past decade, higher-tariff universities – those with the most demanding entry requirements according to UCAS data – have expanded their intake of students with lower prior attainment. Students achieving the equivalent of three B grades or lower at A-level now make up nearly 30 per cent of entrants to these institutions, up from 15 per cent in 2016.
This shift has occurred as real-terms funding per student has fallen by 25 to 30 per cent, prompting prestigious universities to protect their income by widening their recruitment net. The result has been a redistribution of students away from non-higher-tariff providers.
Thirty per cent of all students with three Bs or lower now attend higher-tariff universities, compared with 22 per cent in 2016. Non-higher-tariff institutions have collectively struggled to maintain numbers even during the recent period of population growth.
Projected Impacts on Different Types of Institutions
The report models several scenarios for the coming decade. If higher-tariff universities maintain current recruitment levels, they would share the demographic downturn and face an average 20 per cent reduction in home undergraduate income.
More likely, based on recent behaviour, higher-tariff institutions will continue expanding their intake of lower-attaining students. In that case, non-higher-tariff universities could lose up to 29 per cent of their home undergraduate income on average, with some facing losses approaching 25 per cent within ten years.
These figures represent a substantial threat to financial sustainability for many providers that serve regional economies and offer valuable courses outside the most selective institutions.
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Stakeholder Perspectives and Sector Responses
Bahram Bekhradnia, HEPI’s founder and president and author of the report, described the findings as a “very serious story” that governing bodies must confront. He noted that many institutions’ forward plans do not yet reflect the scale of the coming decline.
Nick Hillman, HEPI director, emphasised that “demography is destiny” and urged every university manager and governor to model what their institution will look like in the 2030s. He also highlighted the need for policymakers to clarify what happens if a university becomes insolvent.
The Russell Group, representing 24 research-intensive universities, responded that growth in places at its members supports student aspiration and employer needs. Its chief executive, Libby Hackett, argued against central planning or recruitment caps, instead calling for sustained public funding for high-quality provision across the sector.
Potential Consequences for English Universities and Students
The report warns that without intervention, “perfectly good universities – institutions that are doing an excellent job and adding real value for the students they recruit and the regions they serve – may fail.” Such outcomes would damage national infrastructure, particularly in regions reliant on local higher education providers.
Students could face reduced choice if institutions close or merge, while staff at affected universities would encounter job insecurity. Regional economies that benefit from university spending and graduate retention could also suffer.
Many providers have already faced financial pressures from frozen tuition fees and rising costs. The additional demographic squeeze risks accelerating existing vulnerabilities.
Policy Options and Recommendations from the Report
The analysis presents policymakers with a clear choice: allow market forces alone to determine outcomes, or introduce limited curbs on recruitment by higher-tariff institutions. The latter approach would echo student number controls used in the 1990s.
Bekhradnia stated that the higher-tariff universities “cannot be blamed for seeking to protect their income,” but that the consequences for the rest of the sector require a policy response. Reintroducing some form of individual institution recruitment caps is presented as one practical mechanism.
The report stops short of prescribing exact mechanisms, instead urging evidence-based discussion involving government, regulators such as the Office for Students, and sector bodies.
Broader Context Within UK Higher Education Policy
English higher education operates under a distinct regulatory and funding framework compared with Scotland, Wales and Northern Ireland. Recent government white papers have signalled ambitions for a more sustainable, specialised and efficient sector aligned with economic needs.
Collaboration, specialisation and potential mergers are already under discussion. The demographic pressures identified by HEPI add urgency to these conversations and could accelerate consolidation in parts of the sector.
International student recruitment offers some mitigation for individual institutions but does not address the underlying domestic demographic trend or the competitive dynamics between domestic providers.
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Implications for University Administrators and Academics
University leaders are advised to model multiple demographic scenarios in their strategic planning rather than assuming continued growth. This includes stress-testing income projections against the 20–29 per cent range of potential losses for non-higher-tariff providers.
Academic staff and professional services teams may need to prepare for greater emphasis on efficiency, programme rationalisation and regional partnerships. Early consideration of collaboration opportunities could help institutions strengthen their position.
Those involved in widening participation work may find renewed focus on raising overall participation rates, though the report notes limited evidence of upward movement in recent years.
Future Outlook and Actionable Insights
The coming decade will test the resilience of English higher education in new ways. Institutions that diversify income, strengthen regional ties and demonstrate clear value to students and employers are likely to fare better.
Policymakers face decisions on whether to intervene in recruitment patterns or accept a more concentrated sector. Either path carries implications for student choice, institutional diversity and regional access to higher education.
Regular monitoring of UCAS data on application patterns and participation rates will provide early indicators of how the trends develop. Sector-wide dialogue facilitated by bodies such as HEPI, Universities UK and the Russell Group will be essential in shaping a managed response.
Readers seeking the full analysis can access the report directly from the HEPI website. Further commentary appears in Times Higher Education and the Russell Group response.