Overseas students’ economic impact up by a fifth pre-pandemic

New analysis commissioned by Hepi and UUKi offers ‘stark reminder’ of financial impact that overseas students bring

September 9, 2021
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The net economic benefit that international students bring to the UK increased by almost a fifth in the three years before the Covid-19 pandemic, according to a new report.

According to the analysis, carried out by London Economics for the Higher Education Policy Institute and Universities UK International, the cohort that started courses in 2018-19 brought almost £29 billion in fee income, additional spending and knock-on benefits for the economy.

However, the costs, including public funding to support such students and use of services like healthcare, only amounted to about £3 billion, bringing a net impact of almost £26 billion.

This was a 19 per cent increase on a similar analysis carried out for Hepi in 2018 on the 2015-16 cohort of international students, when the net economic benefit was estimated to be less than £22 billion.

The analysis says the rise reflects the 17 per cent increase in the number of international students over the three years – mainly from outside the European Union – and increases in fees. Students from outside the EU and – as of this year, from inside it, because of Brexit – pay higher tuition fees and do not have access to government-backed loans.

As well as giving the total net economic impact of international students, the report also breaks this down for each of the 650 Westminster constituencies in the UK based on census data for where students live.

It suggests international students brought the highest net economic impact to the constituency of Sheffield Central, at £290 million or about £2,500 per resident, with areas in Nottingham, London, Newcastle and Cambridge also reaping major financial benefits.

Although international recruitment continued to climb in 2019-20 – the year after the report’s analysis – it has since been disrupted by the Covid-19 pandemic, which may have dented the economic impacts set out in the report. The latest visa data suggest that the number of non-EU students seeking to study in the UK has recovered, but many of these may still have opted to learn online for at least some of their course.

Early data from admissions service Ucas also suggest that recruitment of EU undergraduates may have halved for 2021-22, the first year where such students face the same higher fees and lack of government financial support as those from outside the EU.

Nick Hillman, director of Hepi, said this in particular was a reminder that “future success cannot be taken for granted” when it came to attracting students to the UK.

“International students do not just bring financial benefits. They also bring educational benefits by making our campuses more diverse and exciting places to be,” he said.

“To make the most of these benefits, we need to provide a warm welcome, ensure our educational offer remains competitive and help international students secure fulfilling careers after study.”

Vivienne Stern, director of UUKi, said that the sector would still need “fresh ideas and stronger momentum” to achieve a target in the government’s international education strategy to attract at least 600,000 international students every year by 2030 “and the good this will bring to everyone”.

“While there has been a growing realisation of the tremendous social and cultural benefits of international students, this study provides a stark reminder of their financial importance to communities across the UK, economic recovery and the levelling up agenda,” she said.


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