On the insistence of university authorities, freshers’ week will be an online affair this year. But if this autumn is not much fun for students, it will be a lot less fun still for university staff whose admissions system has just been thrown into turmoil by the A-level results debacle. While some institutions now face overcrowding, others face financial ruin.

When the Education Secretary Gavin Williamson announced on Monday that he was abandoning the algorithm devised by Ofqual to moderate A-level results and would allow candidates to keep the grades estimated by their teachers, students were relieved — many more will, after all, now be able to go to their favoured university. Admissions officers at the top universities were rather less happy. Every year, they make offers on the assumption that a certain proportion of students will fail to achieve the grades they need. This year, thanks to over–ambitious predictions by many teachers, grades have risen sharply and universities will be obliged to take far more students than they bargained for. Oxford, for example, confirmed in a statement soon after Williamson’s announcement that it will be honouring all offers. At a stroke, many of the 55,000 students who were offered places in clearing last week can now claim a place on their first-choice course.

The problems will be compounded by social distancing measures. Lecture halls and halls of residence will be operating at reduced capacity. One university, for instance, has decided that student houses which normally take 12 residents will now take eight, forcing a third of students to find accommodation elsewhere. As for the less-renowned universities, they have the opposite problem: they may struggle to fill their courses. Students they would have gained through the clearing system will instead take up places at their first-choice institutions. Others, put off by the prospect of a university life stripped of fun, have chosen to defer.

Even for the best universities, there will be no great bonanza in extra income from tuition fees. While universities might be obliged to take extra numbers of domestic students — who bring in up to £9,250 a year — they will lose a great many more lucrative overseas students, whose annual fees can reach up to £58,600. A survey by QS suggested that two-thirds of prospective international students will be deferring this year or not coming at all.

The government tried to protect the less popular universities by introducing a cap on student numbers, which was supposed to stop the top ones signing up extra UK students to make up the shortfall. But following the A-levels U-turn, that cap has been dropped, creating further confusion. As a senior lecturer at one of the 1960s universities puts it: ‘It is all happening at once. We have a demographic dip, with fewer 18- to 19-year-olds. Then heavily indebted universities engaged in capital expenditure projects led by incompetent financial managers (and often vice-chancellors). Then a drop in foreign students, then Covid. Then, at the last minute, comes the decision to remove the student cap.’

The truth is that even before Covid, many universities were on the financial brink. In April, the Higher Education Statistical Agency reported that 119 of 194 universities were in deficit, more than twice the number the year before. And that was in normal years when universities had lots of international students paying through the nose. In April, London Economics calculated that Covid-19 could cost the university sector £2.6 billion next year and lead to 30,000 job losses. The calculations were terrifying: if international student numbers halve, that would cost £1.5 billion in lost revenue. The projected fall in EU students could cost £350 million. The IFS has also produced a sobering forecast, with a central prediction of £11 billion of losses for the university sector in the long run. In this scenario, 13 universities would become financially unviable without a bailout.

So the next education crisis is already well in the making. Will the government bail out failing universities, or let them go bust? One problem is that many of the universities which could end up going under are in red wall constituencies. It’s all very well saying that the market will decide, and unpopular universities should fail. But take away a university from a former mill town and you lose not only a major employer, but also educational opportunities for young people from low-income backgrounds, who are more inclined to attend their local universities. A single university failure would severely undermine the ‘levelling up’ agenda.

The government’s humiliating U-turn on A-levels is an easy political fix. The hard part is what happens to students next year. Unlike this year’s cohort, their grades will presumably not be artificially inflated by teacher assessments. How are universities supposed to choose between a deferred applicant who was given an inflated grade in 2020 and one who took their A-level exams in 2021 after losing half a year’s education? Inevitably, there are going to be calls next year, too, to inflate grades in order to eliminate unfairness.

Russell Group universities have been warning for years that their efforts to widen access have been thwarted by poor levels of attainment at many schools. After next year’s results, the gap between those (often private) schools which maintained a full timetable of lessons online throughout lockdown and those which fobbed off their pupils with an hour or less teaching a day is going to become rather obvious. As ever, universities will be blamed if they don’t hit targets for taking state school pupils, but they are going to find themselves hampered in their ability to do this without a huge effort to repair the damage to pupils’ education after the enforced break. Meanwhile, many universities will have the additional problem of having to provide remedial classes — especially for science and technology courses — for students with large gaps in their knowledge.

The end of university education was predicted by many when the coalition raised tuition fees. Yet student numbers have continued to rise, with 2.4 million enrolled on higher education courses last year, a record high. Recessions also tend to boost these numbers because, with fewer job options available, school leavers as well as more mature people choose to study instead. What the sector has never had to contend with before is the diminution in the quality of the student experience. A large part of the attraction of university — the chance to meet a wide variety of people — will not be possible, at least not next term. Students will be forced to live in small ‘bubbles’ with other people doing their course. One of the frequent complaints of students, even before Covid, was a lack of contact time with teaching staff. That is going to be reduced further. Several universities, including Cambridge, Edinburgh, Warwick, Bristol and Manchester, have already announced that all lectures will be online next term.

Without the social aspects of student life — at least for now — will students still want to pay £9,250 a year in tuition fees? As with every other industry, Covid-19 has created the conditions for rapid disruption. If you are going to have your lectures online, do you really need them to be delivered from another building in Blackburn, or would you prefer to follow a course beamed in from San Francisco at a fraction of the price?

Of course, global changes to higher education will bring opportunities, too. British universities can improve their own distance-learning courses, although that won’t help the bars, restaurants and so on in university towns which rely on the student trade.

In the UK, higher education has become an increasingly important economic sector in recent years. Universities have made big expansion plans (and taken out large debts), relying on their ability to increase student numbers at a significant rate. This is why so many institutions now face the fight of their lives to stay afloat. If no university goes under this year, they will have done a remarkable job.