Foreign Students

Business, Innovation and Skills written question – answered on 5th December 2011.

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Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

To ask the Secretary of State for Business, Innovation and Skills what his assessment is of potential changes to the level of education exports as a result of (a) student visa changes and (b) a rise in international student tuition fees.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

Research published by BIS(1) estimates the total value of education exports to the UK at £14.1 billion (in 2008/09) and forecasts that total UK education exports could rise to £17.6 billion in 2015 and £26.6 billion by 2025. The research also attempted to forecast the impact of change in immigration policy and the rise in student fees and suggested that:

The change in immigration policy might result in a decrease of £203 million in 2014/15, £232 million by 2019/20 and £268 million by 2024/25.

The change in fee policy for EU and UK domiciled students studying for undergraduate degrees in England might result in a decrease of £339 million in 2014/15, £672 million by 2019/20 and £844 million by 2024/25. The estimate incorporates the fact that a large proportion of EU students coming to the UK to study would be contributing higher fees than is currently the case.

The combined effect of immigration and tuition fee policy changes might result in a decrease of £542 million in 2014/15, £904 million in 2019/20 and £1,112 million in 2024/25.

Separately, the UK Border Agency (UKBA) published its own impact assessment of the reform of the points-based immigration system in June this year, looking at impact over a shorter time scale. The assessment suggested that:

The level of tuition fee income from international students might reduce by £22.5 million in 2011/12; £30.8 million in 2012/13; £59.4 million in 2013/14 and £57.9 million in 2014/15.

The level of international student expenditure might reduce by £47.7 million in 2011/12; £95.1 million in 2012/13; £166.9 million in 2013/14 and £199.6 million in 2014/15. These figures did not include expenditure by students’ dependents, nor do they include the amount generated by students and their dependents through part-time work while in study, which is not the same as the post-study work route.

The aggregate of these changes might result in a decrease of £70.2 million in 2011/12, £125.9 million in 2012/13, £229.3 million in 2013/14 and £257.5 million in 2014/15

The UKBA report also included impact assessment for a number of other items that are not included in the calculation of education exports, such as loss of output from post-study work by students. We have not included detail of these items in this response.

In presenting such estimates, it is important to note that they only represent a snapshot in time and can change. For example, UK work with Brazil on its “Science without Borders” programme could now see an additional 10,000 higher education students coming to study in the UK, under conditions which meet the new immigration policy.

The Government are very clear that we should not be discouraging genuine international students from coming to the UK to study at genuine institutions. We fully appreciate the economic benefits and wider enrichment students bring to the UK. What we are attempting to do is tackle abuse of the system. The aim is to ensure that we get the balance right between providing a user-friendly route for bona fide students and education providers and keeping out those who would seek to abuse the system.

In respect of non-EU students, higher education establishments are free to decide the level at which to set student fees. The Government have never regulated the fees charged by higher education institutions (HEIs) to international students. The market for international students is very competitive. Institutions watch closely what other institutions, in the UK and abroad, are charging when deciding on the level at which to set their own international student fees. It is not in any HEI’s interest to price itself out of the market.

(1) London Economics Report “Estimating the value to the UK of Education Exports”, published by BIS in June 2011.

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