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A Model to Evaluate the Financial and Operational Risk of the UK Universities

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Title: A Model to Evaluate the Financial and Operational Risk of the UK Universities
Language: English
Authors: Vangelis Tsiligkiris (ORCID 0000-0002-5478-3464), Karan Vishwanath, Jeremy Eng-Tuck Cheah (ORCID 0000-0003-2953-3815)
Source: Higher Education Quarterly. 2026 80(1).
Availability: Wiley. Available from: John Wiley & Sons, Inc. 111 River Street, Hoboken, NJ 07030. Tel: 800-835-6770; e-mail: cs-journals@wiley.com; Web site: https://www.wiley.com/en-us
Peer Reviewed: Y
Page Count: 16
Publication Date: 2026
Document Type: Journal Articles
Reports - Research
Education Level: Higher Education
Postsecondary Education
Descriptors: Foreign Countries, Higher Education, Universities, Economic Development, Educational Finance, Financial Problems, Tuition, Risk, Educational Indicators, Costs, Recruitment, Student Satisfaction, Declining Enrollment, College Administration, Efficiency
Geographic Terms: United Kingdom
DOI: 10.1111/hequ.70094
ISSN: 0951-5224
1468-2273
Abstract: The UK higher education sector plays a pivotal role in economic and societal development, generating significant financial returns, fostering innovation and addressing workforce needs. However, the sector faces mounting challenges threatening its financial and operational resilience. These challenges include declining real-term domestic tuition income, increasing reliance on volatile international student markets, and escalating operational costs. This study develops a framework to assess the financial and operational risk of UK universities, employing indicators such as liquidity days, net operating cash flows, recruitment power and student satisfaction rates. Using data from 2016 to 2023 and linear regression models for projections, and machine learning random forest for validation, the study categorises universities into four risk tiers: Stable, Moderate Risk, At Risk and Critical Risk. Findings reveal a substantial proportion of universities are in moderate to high operational risk tiers, with financial vulnerabilities projected to increase, particularly under declining international enrolments. The interplay between financial and operational risks exacerbates sector-wide instability, threatening long-term viability. The study highlights the urgent need for diversified revenue streams, cost efficiency and strategic interventions to mitigate risks. This framework offers actionable insights for policymakers and university management, ensuring institutions maintain their critical contributions to the economy and society amidst an evolving higher education landscape.
Abstractor: As Provided
Entry Date: 2026
Accession Number: EJ1494147
Database: ERIC
FullText Text:
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  Data: A Model to Evaluate the Financial and Operational Risk of the UK Universities
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  Data: <searchLink fieldCode="AR" term="%22Vangelis+Tsiligkiris%22">Vangelis Tsiligkiris</searchLink> (ORCID <externalLink term="https://orcid.org/0000-0002-5478-3464">0000-0002-5478-3464</externalLink>)<br /><searchLink fieldCode="AR" term="%22Karan+Vishwanath%22">Karan Vishwanath</searchLink><br /><searchLink fieldCode="AR" term="%22Jeremy+Eng-Tuck+Cheah%22">Jeremy Eng-Tuck Cheah</searchLink> (ORCID <externalLink term="https://orcid.org/0000-0003-2953-3815">0000-0003-2953-3815</externalLink>)
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  Data: <searchLink fieldCode="SO" term="%22Higher+Education+Quarterly%22"><i>Higher Education Quarterly</i></searchLink>. 2026 80(1).
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  Data: Wiley. Available from: John Wiley & Sons, Inc. 111 River Street, Hoboken, NJ 07030. Tel: 800-835-6770; e-mail: cs-journals@wiley.com; Web site: https://www.wiley.com/en-us
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  Data: Y
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  Data: 16
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  Data: 2026
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  Data: Journal Articles<br />Reports - Research
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  Data: <searchLink fieldCode="EL" term="%22Higher+Education%22">Higher Education</searchLink><br /><searchLink fieldCode="EL" term="%22Postsecondary+Education%22">Postsecondary Education</searchLink>
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  Data: <searchLink fieldCode="DE" term="%22Foreign+Countries%22">Foreign Countries</searchLink><br /><searchLink fieldCode="DE" term="%22Higher+Education%22">Higher Education</searchLink><br /><searchLink fieldCode="DE" term="%22Universities%22">Universities</searchLink><br /><searchLink fieldCode="DE" term="%22Economic+Development%22">Economic Development</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Finance%22">Educational Finance</searchLink><br /><searchLink fieldCode="DE" term="%22Financial+Problems%22">Financial Problems</searchLink><br /><searchLink fieldCode="DE" term="%22Tuition%22">Tuition</searchLink><br /><searchLink fieldCode="DE" term="%22Risk%22">Risk</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Indicators%22">Educational Indicators</searchLink><br /><searchLink fieldCode="DE" term="%22Costs%22">Costs</searchLink><br /><searchLink fieldCode="DE" term="%22Recruitment%22">Recruitment</searchLink><br /><searchLink fieldCode="DE" term="%22Student+Satisfaction%22">Student Satisfaction</searchLink><br /><searchLink fieldCode="DE" term="%22Declining+Enrollment%22">Declining Enrollment</searchLink><br /><searchLink fieldCode="DE" term="%22College+Administration%22">College Administration</searchLink><br /><searchLink fieldCode="DE" term="%22Efficiency%22">Efficiency</searchLink>
– Name: Subject
  Label: Geographic Terms
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  Data: <searchLink fieldCode="DE" term="%22United+Kingdom%22">United Kingdom</searchLink>
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  Data: 10.1111/hequ.70094
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  Data: 0951-5224<br />1468-2273
– Name: Abstract
  Label: Abstract
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  Data: The UK higher education sector plays a pivotal role in economic and societal development, generating significant financial returns, fostering innovation and addressing workforce needs. However, the sector faces mounting challenges threatening its financial and operational resilience. These challenges include declining real-term domestic tuition income, increasing reliance on volatile international student markets, and escalating operational costs. This study develops a framework to assess the financial and operational risk of UK universities, employing indicators such as liquidity days, net operating cash flows, recruitment power and student satisfaction rates. Using data from 2016 to 2023 and linear regression models for projections, and machine learning random forest for validation, the study categorises universities into four risk tiers: Stable, Moderate Risk, At Risk and Critical Risk. Findings reveal a substantial proportion of universities are in moderate to high operational risk tiers, with financial vulnerabilities projected to increase, particularly under declining international enrolments. The interplay between financial and operational risks exacerbates sector-wide instability, threatening long-term viability. The study highlights the urgent need for diversified revenue streams, cost efficiency and strategic interventions to mitigate risks. This framework offers actionable insights for policymakers and university management, ensuring institutions maintain their critical contributions to the economy and society amidst an evolving higher education landscape.
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  Data: 2026
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  Label: Accession Number
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  Data: EJ1494147
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        Value: 10.1111/hequ.70094
    Languages:
      – Text: English
    PhysicalDescription:
      Pagination:
        PageCount: 16
    Subjects:
      – SubjectFull: Foreign Countries
        Type: general
      – SubjectFull: Higher Education
        Type: general
      – SubjectFull: Universities
        Type: general
      – SubjectFull: Economic Development
        Type: general
      – SubjectFull: Educational Finance
        Type: general
      – SubjectFull: Financial Problems
        Type: general
      – SubjectFull: Tuition
        Type: general
      – SubjectFull: Risk
        Type: general
      – SubjectFull: Educational Indicators
        Type: general
      – SubjectFull: Costs
        Type: general
      – SubjectFull: Recruitment
        Type: general
      – SubjectFull: Student Satisfaction
        Type: general
      – SubjectFull: Declining Enrollment
        Type: general
      – SubjectFull: College Administration
        Type: general
      – SubjectFull: Efficiency
        Type: general
      – SubjectFull: United Kingdom
        Type: general
    Titles:
      – TitleFull: A Model to Evaluate the Financial and Operational Risk of the UK Universities
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            NameFull: Karan Vishwanath
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            NameFull: Jeremy Eng-Tuck Cheah
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