LONDON - Thirteen universities face "a very real prospect" of insolvency following the coronavirus crisis unless they receive a government bailout, a study suggests.
High-ranking universities with large numbers of international students face the largest immediate drop in income, says the Institute for Fiscal Studies.
But the least prestigious universities are at the greatest risk, says the IFS.
The IFS does not name the universities, but says a targeted government bailout would be the most cost-effective plan.
The fallout from Covid-19 "poses a significant financial threat" across UK higher education, with most institutions left with reduced net assets, says the analysis.
They say the total size of the sector's losses is "highly uncertain" - anywhere between £3bn and £19bn, or between 7.5% and almost half the sector's annual income.
The researchers' central estimate is an £11bn loss, amounting to a quarter of the sector's annual income.
In addition, universities which are running pension scheme deficits will see them widen during the pandemic as investments stagnate.
But there are big variations between institutions, says the study.
Universities with many international students which also have substantial pension obligations are often also higher-ranking institutions, with "large financial buffers" and the option of alleviating losses by admitting more UK-based students.
But this behaviour could harm less selective universities, which could see their potential students recruited by higher-ranking institutions.
Without significant redundancies, which would impact on teaching quality, universities are unlikely to be able to claw back much of the losses through cost savings, the researchers warn.
Some universities went into the crisis with far stronger finances than others, they add.
"Our analysis shows it is not the universities with the greatest losses, but the institutions in the weakest financial positions before the crisis, that are at the greatest risk of insolvency," they conclude.
The researchers do not name names but, under their central estimate, suggest 13 universities, out of the UK's 165 higher education institutions, would end up with negative reserves "and thus may not be viable in the long run without a government bailout or debt restructuring".
The analysis, which was funded by the Nuffield Foundation, suggests a targeted bailout aimed at "keeping these institutions afloat could cost just £140m".
IFS research economist Elaine Drayton said a targeted bailout would be by far the cheapest option.
"However, rescuing failing institutions may weaken incentives for others to manage their finances prudently in future," she warned.
"General increases in research funding avoid this problem, but are unlikely to help the institutions that are most at risk, as few of them are research active."(FA)