PhD fees only cover 20 per cent of costs at some UK universities

Some UK universities are spending £4 of their own money for every £1 they receive for PhD training, according to a study that highlights the pivotal role of quality-related (QR) funding and overseas student income in supporting doctoral education.

The extent of institutional shortfalls is revealed in a new report commissioned by UK Research and Innovation (UKRI) on the wider costs of PhD education, which routinely outstrip the £5,006 annual tuition fees paid directly to UK universities.

According to Transparent Approach to Costing (TRAC) data submitted by institutions, universities recover only about 46 per cent of what they spend on educating PhD students, leading to a £1.8 billion loss on doctoral training in 2022-23 alone.

This deficit led UKRI to investigate why institutions are racking up such losses on doctoral students, as part of the New Deal for Postgraduate Research programme launched in 2023.

The study, which was conducted by academics from Oxford Brookes University and the University of Warwick and published on 21 March, explains that some less research-intensive universities are incurring much higher losses on PhD students than imagined.

One interviewee told researchers that their institution’s cost recovery rate was “more like 20-22 per cent”, which was “consistent with our peer group”.

Universities “that get the most funding get to have the biggest cost recovery as they have access to bigger industry and more research council spending”, they added.

Interviewees from other universities also felt the 46 per cent cost recovery rate was an underestimate of the true cost of educating PhD students, with one suggesting that their institution recovered only about 30 per cent of their costs via tuition fees and other grants.

Costs related to well-being and mental health support, estates, PhD student training and the student experience were not reflected in submissions to TRAC, other interviewees explained, leading the authors to suggest that universities “lack an accurate understanding of the precise unit per student”.

These costs were often higher for less research-intensive universities given they have fewer PhD students and were less able to spread the costs over a cohort, the study explains.

Despite the hefty losses incurred in doctoral education, however, many universities explained that they “invest resources into their postgraduate researcher environment as part of their overall strategy and duty to train the next generation”, notes the report.

Helping students through the cost-of-living crisis

Some institutions point to  the “cost-benefit offset and the contribution PGR students make to the research community (e.g. through teaching undergraduates, and research outputs)”.

However, many interviewees explained that they would be unable to train as many PhD researchers if quality-related (QR) funding – both the £1.3 billion mainstream fund and the £344 million research degree programme strand – was reduced. One said they would struggle to offer any training to PhD students without this QR funding.

About one in three interviewees described the importance of QR funding to PhD funding, with institutions stating that they used QR funding to cover doctoral studentships and stipends and pay for the time of academic supervisors.

Fees from international students, both undergraduate and postgraduate, are also crucial for cross-subsidising doctoral training, interviewees explained. 

“Some view current immigration policies in the wake of the UK’s exit from the EU – such as not being able to bring over family while studying – as a potential threat to their research talent pipeline,” says the study.

Asked what a reasonable recovery rate might be, several interviewees suggested “in the region of 80 per cent to 100 per cent” should be covered by UKRI – similar to the 80 per cent cost recovery for grants – although many felt this was “unfeasible” or “idealistic”.

However, many felt that UKRI “has kept fees low without taking into consideration wider associated costs”, suggesting an uplift was overdue.

In a separate report published on 21 March, consultants also examined the broader issue of the recovery of research costs by institutions. UKRI currently funds 80 per cent of the cost of the research it funds but UK universities claim cost recovery is now just below 70 per cent. Inflationary pressures, unexpected staff costs and undercosting of research projects by principal investigators could explain some of the current shortfall, the report suggests.

Responding to the two reports, UKRI said it would fund all equipment purchases at 80 per cent of their full economic cost, barring fully funded equipment for specific infrastructure opportunities, and raise the threshold for capital equipment from £10,000 to £25,000 – a move that would reflect the higher costs of research and reduce administrative burdens on smaller purchases.

UKRI said it would also provide clearer guidance on institutional matched funding to ensure transparency and fairness in research funding. The default position will be no expectation of matched funding, it said, reflecting a recommendation from the latter report.

Jessica Corner, executive chair of Research England, said she was “confident these changes will be welcomed by the UK research community as a step toward greater financial sustainability.”

jack.grove@timeshighereducation.com