How much are international students worth to the UK?

Research from the Higher Education Policy Institute (HEPI) has shown that international students contribute over GBP 20 billion a year to the UK economy. The HEPI firmly believes that the benefits international students bring to the economy, thoroughly outweigh hosting costs 10-fold.

It was, therefore, met with great disappointment by higher education institutions when the UK government confirmed that the Erasmus scheme would be suspended post-Brexit. Although Erasmus will be replaced by the new Turing scheme, it’s thought that this will only cover UK students learning abroad and not international students looking to study in the UK.

The Turing scheme will commence in September 2021 but has been subject to much criticism due to its current inability to benefit international students in the UK. Around 30,000 international students entered the UK each year via the Erasmus programme. Following the programme’s suspension, it could prove much more difficult for international students to study in the UK, which will undoubtedly leave a dent in the UK economy.

Costs and benefits for each international student by constituency

The costs and benefits of international students by parliamentary constituency provides a detailed analysis of the UK’s international students each year.

Among its main findings are:

• The gross benefits, including tuition fees, other spending and economic knock-on effects of international students is around GBP 22.6 billion. This is, on average, GBP 87,000 for each EU student and GBP 102,000 for each non-EU student
• The public cost of hosting international students, including education, health and social security is GBP 2.3 billion. This total figure covers GBP 19,000 on average for each EU student and GBP 7,000 for each non-EU student
• The net impact (benefits minus costs) of hosting international students is GBP 20.3 billion. This net impact is GBP 68,000 on average for each EU student and GBP 95,000 for each non-EU student
• The net impact of international students is spread throughout the UK
• Students in London generate around GBP 4.64 billion
• Students in the South East generate around GBP 2.44 billion
• Students in the West Midlands generate around GBP 1.95 billion
• Students in Scotland generate around GBP 1.94 billion
• Students in the North West generate GBP 1.91 billion
• Students in Yorkshire and the Humber generate around GBP 1.59 billion
• Students in the East of England generate around GBP 1.34 billion
• Students in the East Midlands generate around GBP 1.28 billion
• Students in the South West generate around GBP 1.21 billion
• Students in the North East generate around GBP 0.98 billion
• Students in Wales generate around GBP 0.90 billion
• Students in Northern Ireland generate GBP 0.17 billion.

Source: The Higher Education Policy Institute and Kaplan International Pathways.

The analysis in the report concentrates on EU and non-EU first-year students attending UK universities in 2015/16. The figures are presented in 2015/16 prices and are discounted to reflect net present values.

For the academic year 2019/20, according to Higher Education Statistics Agency (HESA), there were 556,625 non-UK students studying in the UK, compared to 496,315 the previous year. China continues to make up the majority of international students in the UK, making up 35% of all non-EU students 2019/20.

There has also been a substantial increase in the number of students from India to the UK, seeing an increase of 38,580 students over the past five years.

Amongst European countries, most international students domiciled from Italy in 2019/20, with 14,585, followed by France with 14,015 and Germany with 12,875.

Future of international students post-Brexit

Linda Cowan, Managing Director, of Kaplan International Pathways, says, “In recent decades, the UK has been phenomenally successful in recruiting international students, second only to the US, with countries such as Australia catching up.”

However, the suspension of Erasmus post-Brexit could see a decline in the number of international students in the UK from 2021 onwards. Nick Hillman, Director of HEPI, believes the fact the number of international students has not declined on the build up to Brexit is a testament to the strengths of the UK’s higher education sector.

Professor Graham Galbraith, Vice-Chancellor of Portsmouth University, says “the main beneficiaries of international students are spread right across the country – from Newcastle, through Liverpool, Leeds, Sheffield, Coventry, and Cardiff to Portsmouth. Encouraging international students to come to the UK and study should be central to the UK’s industrial strategy and a key part of supporting a global Britain post-Brexit.”

Nick Hillman is also concerned that the UK government does not recognise the extent of the financial strength that international students bring to the UK. Hillman highlighted that the Migration Advisory Committee still claims that there is insufficient evidence to prove that international students bring a positive contribution to the UK economy.

In addition to financial support, Linda Cowan stated that international students also fill skills shortages within the UK. “Given their high level of English competency and impressive academic achievements, we should be doing everything possible to encourage them to stay and work here. To do this, we need to reinstate attractive and competitive post-study work rights for all international students. “

Higher education institutions are also concerned that further post-Brexit rules and regulations could deter European students from entering the UK going forward. New post-Brexit regulations state that EU students studying in the UK are to pay over GBP 1,000 in healthcare surcharges and then apply to claim it back. However, MPs are urging the UK government to remove such rules in what they are labelling as a ‘red tape nightmare’.

It’s hoped that any unnecessary post-Brexit regulations impacting international students will be ironed out over the coming year to continue to make the UK a desirable place to work and study.