Student numbers are falling more sharply than previously predicted, and cuts are looming

Every year, the Concern and Control departments of colleges and universities eagerly await the OCW reference estimate with the expected student numbers for the coming years. This estimate largely predicts the financial scope for higher education institutions. This year, for the third year in a row, the estimate is lower than previously predicted.

Until a few years ago, the predicted number of students was always lower than the actual number, giving higher education institutions a windfall. However, the estimate has been adjusted downwards in recent years.

After fat years, now the lean years

The resources that universities and colleges receive from the government grant are largely determined by the reference estimate and are therefore dependent on the development of national student numbers. This concerns EEA students in the Netherlands. After years of positive estimates, the estimate issued in 2022 for the period 2022-2027 was slightly negative. The 2023 estimate, for the period 2023-2028, has already been significantly revised downwards, and the latest estimate for 2024 shows an even more negative picture.

If student numbers are lower than estimated, the amount that higher education institutions receive per student from OCW also decreases. The idea is that fewer investments will be needed in infrastructure and support. The same applies if more students come: more than expected will have to be invested in facilities and staff, so the amount per student will increase.

The unprecedented growth in student numbers over the past fifteen years, especially at universities, often led to positive surprises when the reference estimate came true. Those fat years now seem to be followed by a time of lean years.

The influx of international students is lower

The latest estimate states that the adjustment in the expected number of students is large, especially in the long-term estimate for 2024-2030, which is reflected in the budget of institutions. “The adjustments are large in higher education, with 23,500 (-5.4 percent) fewer students in higher professional education and 18,600 (-5.1 percent) fewer students in university education in 2030.” There are two important causes for this, according to the OCW accountants. The number of graduates who progress to higher education without a gap year was lower than expected last year, and the influx of international students is lower than expected last year.

The number of full-time HBO bachelor’s students in particular is declining. An increase in the number of students is expected for Associate degree programs and HBO masters. The universities will continue to grow slightly in the coming years – in both bachelor’s and master’s education – from 341,800 students now to 347,300 in 2030. However, this growth is smaller than previously estimated.

At universities of applied sciences, which are more dependent on Dutch inflows and benefit less from international students, the effect of demographic shrinkage has been visible in the estimates for some time. According to the accountants at OCW, universities are now also faced with a substantially lower influx than previously predicted.

Universities are becoming increasingly international

Although the growth in the number of foreign students is decreasing, the demographic shrinkage in the Netherlands is causing the share of foreign students as part of the entire population to increase in scientific education. Fewer children have been born in the Netherlands in recent decades, which was first noticeable in primary education. This decline in the number of students has now also reached secondary education and MBO, and will soon affect HBO and WO.

Higher professional education is also becoming increasingly international. “The number of international students in higher professional education is expected to grow. This growth comes almost entirely from non-EEA students, while the number of EEA students will not increase in the long term. The number of non-EEA students will grow from 10,800 in 2023 to 13,300 students in 2030,” the estimate states.

The shortages will increase over several years

That universities closely follow this estimate became clear, for example, in the 2024 budget of Radboud University. People there were already gloomy about the reference estimate from 2023: because it had been adjusted downwards, Radboud University must further cut expenditure, as stated in the budget. “Due to the negative reference estimate for 2023, which will affect the government grant from 2024, the additional structural resources have been reduced by 7 million euros from 2024 onwards. The multi-year negative reference estimate for 2023 will increase further to approximately 17 million.”

Now that the latest estimate is once again more negative, this deficit at Radboud University, for example, will increase further. The university says it will continue to monitor the estimates closely. “In the coming years, the developments in the reference estimates will be closely monitored and it will be assessed annually in the context of the policy letters whether, and if so, what steps need to be taken to remain financially healthy in a sustainable manner,” Radboud University said in its latest budget.

The reference estimate is also closely monitored at universities of applied sciences; Here too, the estimates largely determine the financial scope for the future. For example, the Amsterdam University of Applied Sciences had to report in its last annual report that the lower reference estimate has already led to more than 17 million euros less in government funding than previously budgeted. Such setbacks will increase further with the latest estimate from OCW.

These estimates do not include predictions about possible policy changes as are currently being prepared by the Ministry of Education, Culture and Science. For example, the Balanced Internationalization Act, which is feared by universities, could reduce intake figures even further in the coming years, resulting in an even greater decrease in government funding.