The unseen but keenly felt grip of inflation will become increasingly familiar in the months ahead.

But not all will be affected equally ¨C as?usual, those with less will experience more of any hardship.

If this is true of individuals balancing their household books, it is also true of higher education institutions. The insulated elites, particularly those with endowment funds swollen by the stock market success of 2021, will face far fewer tough decisions than those with precarious finances.

National differences in funding and fees policy, and the ease with which other revenue streams can be increased, will also play a part in variations across the higher education landscape.

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These dynamics are explored in detail in an article by Sir?Anton Muscatelli, economist and?principal?of the University of Glasgow, who assesses the implications of the inflationary environment on universities, and the options they might have to respond.

For the marketised systems with the ability to attract fee-paying students from abroad, this is the tap that is often turned up at times of financial difficulty.

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The pandemic has, of course, thrown a toolbox of spanners into this market, but take the UK as an example of a country that has largely maintained open borders and supported higher education exports, and the are rosier than might be expected.

The number of international students at UK institutions increased to?605,000 in?2020-21, hitting a?government target of 600,000 a?decade earlier than forecast.

This was an 8.7?per cent increase on the previous year, with a slight decline in the number of first-year, non-European Union students offset by increases in non-EU postgraduates, and enrolments from the EU (this was the final year that such students paid the same lower tuition fees as UK domestic students).

Given the Covid-stricken circumstances, these numbers reflect strong ongoing demand for international study, for the UK¡¯s universities specifically (albeit with some big shifts in the mix of face-to-face and online provision), and the success of policies such as changes to post-study work visas (the number of students from India grew most rapidly, a group seen as being particularly influenced by improvements to the terms of post-study opportunities).

So far so good, if UK universities are to turn to overseas students in their moment of inflationary need. But there are challenges here,?too.

As we have reported, the latest data from Ucas show that the number of EU students accepting places at UK universities has fallen off a?cliff in?2021, with some seeing close to 100?per cent decline. This was almost inevitable given the changes to fees following Brexit, but it is nevertheless sobering to see the numbers in black and white.

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In our cover feature, we take a deep dive into the dynamics of the global market for international students, assessing the situation, strategies and challenges across a range of countries.

As we detail, while the UK and the US may be feeling cautiously optimistic, in Australia ¨C which has for some time been among the most reliant on overseas student fees ¨C circumstances have been more straitened as borders stayed shut for longer than international competitors.

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We are also a long way from understanding the ultimate shift from in-person to digital and hybrid delivery, and the implications for international?versus transnational models (and associated revenues).

And the spectre of future Covid variants leading to new travel restrictions?along with the longer-term impact of China¡¯s strict Covid-security measures and a general chilling of international relations remain factors that are likely to play a part in the months and years ahead.

If this focus on international student revenues seems, well, unseemly, it should be acknowledged that, despite inflation soaring, it is hard to see domestic funding or fee levels increasing significantly in the current context ¨C particularly when, as we report in our news pages, the level of public awareness of universities¡¯ extraordinary contributions during the pandemic is dispiritingly?low.

As Mark Corver, founder of the consultancy DataHE, tells us, inflation is ¡°accelerating the process of reducing the real value of the UK fees, which have been more or less fixed since 2012.

¡°This will inevitably drive universities to need greater shares of international and postgraduate students to balance the books. Left unaddressed, at some point there will inevitably be a collapse in the willingness of universities to supply UK full-time undergraduate places; it simply will not be economically viable for them.¡±

After endless headlines about degree inflation undermining universities in recent years, in 2022 it is the real thing that risks bringing institutions to their knees.

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john.gill@timeshighereducation.com