London South Bank University has written off £16 million in “bad debt” in light of “weaker repayments” on debts including tuition fees owed by overseas students, pushing the institution into deficit and affecting a banking covenant.
Unlike home students, whose fees are paid to universities by the Student Loans Company (SLC), overseas students and employers funding students are responsible for making their own fee payments to universities.
With domestic teaching funding falling under the frozen £9,250 fee cap in England, many universities have sought to step up international recruitment – but that could leave some facing problems with unpaid fees if there is recruitment from nations where students struggle to fund themselves, or as the cost-of-living crisis affects students.
LSBU’s 2022-23 financial statements refer to a “£16.3 million charge to the bad debt provision”, saying this charge shifted the institution’s overall operating break-even position “to a deficit of £16.4 million”.
