The economic impact of international students in the UK

by Stacey Dingwall

A key concern following Brexit has been the status of international students (and academics) in the UK. Going into the general election, Theresa May has declined calls from universities – and some of her most senior colleagues – to remove students from her government’s target to cut migration by “tens of thousands”.

International students in the UK

In 2014-15, 437,000 students came from overseas to study in the UK, making up 19% of all UK university registrations that year. In February, the Office for National Statistics released net migration statistics which showed that long-term immigration to the UK fell by a “statistically significant” 23% to 134,000 in the year ending September 2016 – the lowest estimate recorded in almost 15 years. The number of international students coming to study in the UK accounted for much of this decrease, at 41,000. The majority of this figure was made up by students from non-EU countries (31,000).

In January, HESA released figures on students enrolled in higher education in 2015-16 which indicated that the number of students coming to the UK from EU member states had increased by 2%. These figures were collected before Brexit, however, so it will be next year’s edition before any impact, if at all, can be identified. Figures from UCAS published at the end of March, however, indicate a 6% decrease in the number of university applications from EU students on the previous year.

The ONS migration figures also showed that students from Asian countries made up 68% of the estimated 87,000 non-EU citizens who came to study in the UK during that year. While the UK remains the second most popular destination for international students in the world, after the USA, this is a fall of 23,000 on the previous year.

An economic impact worth billions

So why are some of Mrs May’s most senior colleagues rebelling against her decision to maintain international students within her migration reduction quota? One major reason is clearly the economic benefits generated for the country by the students. In March this year, research conducted by Oxford Economics for Universities UK suggested that in 2014-15, on- and off-campus spending by international students, and their visitors, generated a knock-on impact worth £25.8 billion in gross output to the UK economy. The 2014-15 international student cohort accounted for £10.8 billion of UK export earnings that year.

Tuition fees account for £4.8 billion of the total figure. The research also found that spending by international students supported over 200,000 jobs in UK university towns and cities and that the economic activity and employment sustained by international students’ off campus spending generated £1 billion in tax revenues.

Conservative rebellion and public opinion

Conservative MP Anna Soubry has pointed out that the economic contribution of international students continues even after they have completed their studies, in the form of “goodwill towards our country”, which “ often results in business deals as well as improved international relations and understanding”. It would appear that the public shares her sentiments: a poll conducted by Comres following the publication of Universities UK’s research found that 74% of those asked would like to see the number of international students in the UK either maintained or increased, after being told of the economic benefits they generate.

Despite this, the Prime Minister’s only concession so far has been to allow the newly created Office for Students to publish separate figures on overseas students, although they will still be recorded as part of the overall migration figures.  It has been suggested that a potential Conservative backbench rebellion over the government’s decision to remove the House of Lords’ amendment to the Higher Education and Research Bill on the issue was only defused by the decision to call a snap election – although MPs from both the Conservative and opposition parties have vowed to continue to fight the government’s stance. The Independent has launched a campaign – Drop the Target – supported by Soubry, which is demanding answers from the government on why they are continuing with the policy, which they argue is economically and socially damaging to the country.


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