Sally Wheeler, who is eight months into her tenure as vice-chancellor at Birkbeck, University of London, said that returning to the institution felt like ¡°coming home¡±.

Although she spent seven years in a series of senior roles at the Australian National University, and before that worked at Queen¡¯s University Belfast, she still has fond memories of her time as a law academic at London¡¯s ¡°night university¡± between 2001 and 2004.

Although?a great deal has changed since the last time Professor Wheeler was at Birkbeck, tuition fees were held at ?9,250 for the duration of her stay in Australia, creating a situation in which growing numbers of universities are reporting deficits. Birkbeck is not immune to this, with a ?550,000 deficit in 2021-22 widening to ?2.2 million in 2022-23. A major restructure was accompanied by the saving of millions of pounds in staff costs, including via voluntary redundancies.

¡°Obviously the financial situation of universities is not great, and I think it probably was easier in 2001. But it was terrible when I started my career in the 1980s. These things do go in cycles; you have to be realistic,¡± Professor Wheeler told Times Higher Education.

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¡°If Birkbeck was the only university that was struggling financially, I¡¯d be much more worried in some ways, but we¡¯re in a sector that is struggling financially. Do I worry about the whole sector¡¯s viability? Yes.¡±

Birkbeck¡¯s traditional model of part-time education has been struggling ever since the introduction of higher tuition fees in 2012, with adult learners proving reluctant to take out hefty loans, and the institution has pivoted to full-time courses, but even these have been a tough sell, with total new enrolments dropping from 7,900 in 2020-21 to 6,643 in 2022-23.

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To tackle the funding issues faced by part-time and mature students, the Conservative government pledged to introduce the Lifelong Learning Entitlement, which will give learners access to flexible loans worth the equivalent of four years¡¯ worth of study, which can be put towards individual modules or other short courses.

But Professor Wheeler warned that the LLE, now due to launch in 2026, ¡°isn¡¯t going to drum up student numbers¡±.

¡°I don¡¯t think there are many people who would like to return to university who want to take on a loan,¡± she said. ¡°They tend to be at the point of their life when they¡¯re either getting a mortgage or want a mortgage, or they have kids, or they have other pulls on their expenditure. The idea of tying themselves to a loan is not something that they necessarily want to do.¡±

Professor Wheeler said the UK could learn from the Australian model, which allows students to take loans out for much smaller units, such as microcredentials.?

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A lacklustre pilot of the LLE, which received only 125 applications across all participating universities, was evidence the current system is ¡°just not attractive¡±, and instead needs a ¡°major rethink of how you fund it¡±, according to Professor Wheeler.

This leaves the new Labour government in a catch-22 situation. While there is a need for drastic action on sector funding, ¡°no government wants to be the government that raises tuition fees¡±, she said.

Professor Wheeler said the best option was to reframe the debate. ¡°Nobody wants to see a fee rise that impedes access. So how, within the same envelope, can we achieve some sort of redistribution?¡±

A more inclusive system could include bigger maintenance grants for low-income students, or a system like Australia¡¯s Commonwealth supported places scheme, where the government pays part of a certain number of students¡¯ fees at each provider.

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¡°It should be possible to tinker around the margins, and improve the cost package for people at the bottom end, and change it for people at the top end,¡± Professor Wheeler said.

Something that remained consistent, whether Professor Wheeler was talking about the future of the sector or the opportunities of artificial intelligence, was an acute sense of hope, despite the challenges ahead, noting that, ¡°You can be despairing if you want, but it doesn¡¯t normally improve things.¡±

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¡°I¡¯m always an optimist,¡± she added. ¡°I feel challenged about things every day. But I cling on to the fact that Birkbeck is a place where we have new opportunities to exploit. Perhaps I would feel differently if I was at an institution where that wasn¡¯t the case. But if you¡¯re standing looking at a mountain, the only way is up.¡±

juliette.rowsell@timeshighereducation.com