It is entirely appropriate that the two main topics in this our relaunch anniversary issue are students and research. Because, like the hokey-cokey, that's what it's all about.

When graduates are facing the bleakest employment prospects in decades, the teaching, the research, the joy of learning and campus life are more important than ever before, especially with the Government's prediction of a graduate earnings premium of ?120,000 over a lifetime now looking wildly optimistic.

In our survey of the student experience - a naff term, as one academic points out in our feature, but one that everyone seems to understand - it is the students who decide what is important and who rate these factors.

But for universities trying to distil what the student experience is, it's not that easy. As Chris Lusk of the University of St Andrews says, "I could see it everywhere, but it was like trying to define and point out what air is: it is everywhere and it is something that is vital to the oxygen of the university."

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And for those who would like to bottle some of the air at top-ranking Loughborough University, merely donning a tracksuit may not be enough. True, it is well known for its sport, but Loughborough also scores highly on many other measures, including teaching and the quality of its courses. And as a member of its staff says, "Almost all our modules are based on colleagues' research interests and when we get scores that say lecturers are very enthusiastic, it is not rocket science."

Which brings us to research. When David Eastwood, chief executive of the Higher Education Funding Council for England, said the outcome of the recent research assessment exercise showed "more clearly than ever that there is excellent research to be found across the sector", there were a few raised eyebrows. But the findings of Andrew Oswald of the University of Warwick in a survey of his own discipline of economics seem to bear that out.

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Oswald's results are important, especially when an RAE subject panel has argued that funding should be directed towards excellence wherever it is found. And Oswald concurs.

Hefce will announce the quality-related research (QR) funding formula in March, but research-intensive institutions are already worried. Michael Arthur, vice-chancellor of the University of Leeds, says that although increased funding across the sector would lead to an improvement overall, it would be "a reasonably well-funded mediocrity". He warns that any loss of income for the top research universities will compromise their performance and "eventually they will no longer be world-leading institutions able to compete with the very best universities in the US or elsewhere."

And, of course, loss of status will have an effect on student numbers, bringing us full circle to the student experience and the question we asked a year ago: what are universities for? In these straitened times, it may be necessary to remind ourselves of universities' mission. Surely the Government should now be telling students to forget how much they can earn and instead concentrate on how much they can learn. A well-funded research base and a highly educated workforce are crucial to any comeback from recession.

For Hefce and the Government, the amount of funding and its distribution will be vital. For the sector, even the most carefully considered approach to allocation is likely to disappoint some of the institutions waiting anxiously to know how they will fare.

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Ultimately, it's not counting the cost of funding research and educating the next generation that we should be worried about, but the cost of not doing so.