Why we should welcome an influx from overseas

March 5, 2004

Don't be alarmed by a big rise in the number of EU students coming to Britain. The benefits far outweigh the costs, says Libby Aston

The UK is by far the most popular study destination for European Union students -they now comprise about 5 per cent of the UK's total student population.

In May, the ten accession countries will join the EU and from September their students will be treated as other EU and home students in the UK. So the nearly 6,000 accession country students who came to the UK in 2001-02 as international students - a number that has increased significantly since 1998-99 - are likely to be joined by more of their compatriots.

This will have important consequences for the demand for and supply of higher education in this country, and the costs and benefits of the new EU students to the UK.

Demand for higher education within the accession countries is projected to increase, despite a declining young population. Only a relatively small proportion of students from these countries currently studying abroad plumps for the UK. But a British Council survey shows that this country would be the most popular study destination among such students if choice were unconstrained by high fees and visa regulations. One-third of them would then opt for the UK.

From May, UK higher education becomes much more affordable for students from the ten new EU members. Fees that were once set at international rates will now be set at home and EU levels.

Demand for UK higher education in these countries is likely to increase significantly - numbers should at least converge with EU average levels.

That could mean between 20,000 and 30,000 accession country students in the UK by 2010. Even these figures may be an underestimate.

However, just as demand from abroad is set to increase, the supply of available student places in the UK is likely to come under pressure. Some 180,000-250,000 additional undergraduates from England alone are anticipated by 2010.

It means that for the first time in decades there might be a shortage of student places. If supply does not increase sufficiently to meet demand, EU students and home students will face tougher competition for places, and if the latter lose out, the consequences will be seen in reduced UK participation rates.

Assuming that the government will be willing to meet the cost of the increased demand to 2010, based on current proposals, and that average institutional grants will not change after 2006, the total cost to the government will be about £4,800 for each undergraduate EU student and about £2,000 for each postgraduate on average a year (based on fee levels in England).

However, EU students come with significant financial benefits attached as well as costs. Those learning and working in the UK already more than pay for themselves. Based on living expenditure during study, and a conservative estimate of income-tax contributions of the 25 per cent of EU students who stay on to work in the UK, it is estimated that, on average, each EU student provides at least £6,400 a year of direct financial benefit to the UK.

The UK enjoys some £210 million a year from EU students who are not on an exchange programme. And the benefits are not just monetary. There is much to be gained from having a significant proportion of the young future elite of Europe living, studying and working in this country during an important and informative period of their lives.

On the basis of these projections, the net benefit to the UK as a result of opening its higher education system to accession countries is likely to be between £55 million and £80 million a year, with a much higher contribution to gross domestic product from those who remain in the country to work - leaving further unquantified, intangible and non-economic benefits to be reaped at no effective cost.

The one significant fly in the ointment is the government's ability to recover money owed from EU students when they have returned home. The calculations above assume debts will be repaid. The government has not yet outlined how it proposes to do this. Setting up a system for collection of fees across Europe will prove challenging. But putting a robust system in place in good time is essential if this country is to reap the full benefits from EU students.

Libby Aston is senior researcher at the Higher Education Policy Institute Details: www.hepi.ac.uk

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