Academics in Crewe are waiting in limbo. The campus, which is run by Manchester Metropolitan University, is the main centre for higher education in south Cheshire. But in February it was confirmed it would close in the summer of 2019, with 160 academic jobs at risk, and this week those academics will stage a two-day walkout in protest.

Students have been told they can finish their degrees, but many worry their lecturers will not be around to teach them. Unless the closure is reversed, the campus, which has 100 years of history, will become a ghost town. Welcome to life at the sharp end of the market revolution in English higher education.

The atmosphere among staff is grim, said a senior academic from Crewe. “People are suffering from stress, anxiety and depression. People who haven’t had a day off in 20 years, now they’re taking two, three, four days off because they can’t really cope.”

They aren’t alone. Across the country, universities are preparing for hundreds of redundancies as they deal with ferocious competition, Brexit and the launch of the government’s official “gold, silver and bronze” league table.

Figures seen by the Observer show that already some universities are struggling. Between 2011 and 2015 the number of young students starting full-time courses at Russell Group universities grew by 15%, while the number of entrants to MillionPlus institutions, which represent former polytechnics and colleges, shrank by 22.9%. The analysis, which looked at broad trends, found the number of students starting at University Alliance, which represents those focusing on local business links, and smaller specialist universities, fell by 3.4% and 7.1% respectively.

The squeeze follows moves by Russell Group universities – traditionally the most selective – to lower their entrance requirements in some subjects. Sarah Stevens, head of policy at the Russell Group, said a number were making lower tariff offers to students with high potential. “These young women and men are typically from groups who have historically been under-represented in higher education.”

Entry grades at Russell Group universities have fallen by 30 tariff points (a grade and a half) for maths and history, and at least 20 tariff points for English and creative writing, law, economics, philosophy and politics between 2012 and 2015. The data used only refers to students aged 20 or younger at the start of their course, and is drawn from the measure of entry standards that appears in the Guardian’s University Guide.

Pam Tatlow, chief executive of MillionPlus, said recent government policy has favoured research-intensive institutions. From 2012, universities were allowed to recruit unlimited numbers of high-achieving students, while number controls were lifted entirely in 2015.

“At the same time Michael Gove [the former education secretary] changed definitions for social mobility so that schools were no longer judged on how many students they supported to progress to higher education, but on the number of students who went on to study at this small sub-set of universities,” said Tatlow. Non-Russell Group universities have also been hit by large falls in the number of mature students.

As competition between universities intensifies, at least 16 have proposed redundancy programmes for academic staff, including some in the Russell Group.

At Manchester Metropolitan University (MMU), staff are also nervously awaiting cuts to their own campus. “Every faculty has been asked to present plans that include massive cost savings; they’re of such an extent that we can’t see how it’s at all possible without future job losses,” said Julie Wilkinson, the University College Union’s branch secretary at MMU.

The Teaching Excellence Framework will hit elite institutions including the London School of Economics. Photograph: Bloomberg/Bloomberg via Getty Images

MMU said that student numbers at its Cheshire campus had fallen by 45% in the past five years. It added that 80 academics from Crewe had been given roles at its Manchester campus, and that job losses were inevitable to ensure the university’s sustainability.

Alan Smithers, director of the centre for education and employment research at the University of Buckingham, said some universities may merge to survive, while elsewhere departments that were less profitable would have to close. Universities, or branch campuses such as Crewe, which tended to recruit larger numbers of local students from working-class backgrounds, were especially vulnerable.

The introduction of the Teaching Excellence Framework, a government audit of higher education teaching, which is to be released on Thursday, has put additional pressure on universities. The TEF will rank universities using metrics such as graduate employment rates and student satisfaction scores. This system, says Wilkinson, penalises universities that recruit large numbers of students from poorer backgrounds. “Universities obviously make a massive difference to our students’ employability but the key factor is what you come in with – that’s partly what you achieve at A-level and partly a more general idea of social capital.”

Others argue that the TEF could be good news for modern universities. Some of the prestigious Russell Group universities, including the London School of Economics and Political Science (LSE), are expected to perform poorly as a result of low student satisfaction scores. Other institutions that have expanded rapidly may also risk negative feedback from students who feel they have been crammed into lecture halls.

Smithers questioned how well academics are coping with the huge increases in numbers at some universities. “Universities have actually lowered their entry requirements to take in the extra students. These students are likely to need extra support,” he said. But while university staff are facing additional pressures, their numbers are being cut across the country.

At MMU and Crewe, academics say that it is not just their jobs but their university’s mission that is at stake. “We are amazing at recruiting students who come from non-traditional backgrounds. You meet parents and, because we have so many first-time university students, you change whole families, the idea of what a family can achieve and do. We have a real sense of being engaged with the community,” said Wilkinson.

Closing campuses such as Crewe would leave a hole in the local economy, she said, and leave disadvantaged students – who want to stay at home and study locally – with nowhere to go.