There has been an ongoing debate within the UK about the pros and cons of international student recruitment. The issue has risen on the political agenda because it has become entwined with issues of immigration. This blog will offer an overview of the economic benefits and acknowledge the tension that has arisen between these and the issue of immigration in contemporary British politics.
International student fees are important to the UK economy, and important to the Higher Education (HE) sector. How important? Really important. Crucial, key, vital are some superlative words which are not, on balance and reflection, inappropriate. Their impact is not simply upon individual Higher Education Institutions (HEIs) but upon the regions within which these institutions are based and the national economy.
Growing financial dependence of HEIs on international students
UK tuition fees have not substantively risen since 2012 (£9,000) and have been frozen since 2017 (£9,250). Unsurprisingly inflation has eroded the value of these fees. If tuition fees had increased in line with consumer prices, they would now be more than £12,000. Research produced by the Russell Group says there will be a shortfall of around £2,500 per undergraduate this year. It is the fees from international students, who usually pay about double the fees charged to home students that provide the necessary income for universities to function. The fee income from international students has increasingly been cross subsidising undergraduate (UG) home students. Almost 20% of HEI income now comes from international students. A little over a decade ago, this proportion was 10%.
Economic costs and benefits???
A recent HEPI and UUK International report (May 2023) undertook a cost benefit analysis of the impact of international students on the UK. It states that the net impact on the UK economy of the cohort of first year international students at UK HEIs for the academic year 2021-2022 is £37.4 billion across the duration of their studies. The net impact per EU student is £125,000 and the net impact per non-EU student is £96,000. This means that every nine EU students and every eleven non-EU students generate £1m worth of net economic impact for the UK economy over the duration of their studies. The difference between the two numbers arises because EU students are more likely to undertake first degrees with a longer study duration as compared with PG taught degrees with a shorter study duration. The benefits associated with EU students accrue over a longer period.
Where the international students are in the UK
During the academic year 2021-2022 there were 679,970 international students registered at HEIs within the UK. This is approximately 24% of all Higher Education students and they are spread throughout the regions within the UK.
| First Year Students | Geographical location |
| 98,825 | London |
| 34,660 | South East |
| 31,360 | Yorkshire and Humberside |
| 29,750 | West Midlands |
| 27,680 | North West |
| 24,835 | East of England |
| 24,235 | East Midlands |
| 18,715 | North East |
| 44,085 | Scotland |
| 14,905 | Wales |
| 12,615 | Northern Ireland |
Why international students want to come to the UK
The rise in international students studying in the UK is in part a consequence of:
- Global reputation and recognition of UK qualifications
- Teaching in English
- The attraction of one-year Masters courses (most countries require two years of study)
- Government policy
A turbulent environment
Changing government policy has impacted the inflow of international students. Home Office policies were designed to limit incoming students and as a result there was no growth in international student numbers during the years 2010-2016. The government launched the International Education Strategy with a national target in 2019. This led to an increase in numbers. Brexit contributed an additional complexity, reducing the number of EU students. The environment, which might be described as one of ‘flux’, is illustrated by the post study work visas. These were first introduced in Scotland in 2005, adopted across the UK in 2008 , abolished in 2012, re-introduced in 2021 and are now currently under review and it is rumoured that they might cease.
HEIs are operating in an environment where the real value of home fees is declining but the realpolitik means it will be difficult to increase them. International students have become crucial in a cross-subsidy scenario which has developed. The ebb and flow of government policy means that the magnitude of this income source is uncertain. The issue of immigration is not small within the UK, and it does not appear that it will become a ‘small’ issue any time soon. With the numbers of international students inveigled with such a ‘hot’ political issue it is probable that clarity and consistency of Government policy will not prevail in this area for some time. HEIs are left in a position of hoping these issues, which are substantively out of their control, will be resolved. However, experience suggests that management based on ‘hope’ tends not to be successful.
Walter Benjamin once wrote:
“It is only for the sake of those without hope that hope is given to us”.
