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The costs and benefits of international students

Arthi Nachiappan summarises recent research on the economic impact of international students and reactions to it.
This article is more than 5 years old

Arthi was an Editorial Assistant at Wonkhe.

After a difficult year for higher education, the HEPI/Kaplan report on the costs and benefits of international students – conducted by London Economics – has been a welcome opportunity for the sector to create a positive media discourse around international students, and to put further pressure on the government to remove them from its targets on net migration. A timely chance for the sector to take control of the debate.

In a 2012 speech at think tank Policy Exchange, then Minister of State for Immigration Damian Green called for greater focus on “quality rather than quantity” of international students entering the UK. Six years on, Green’s broad framing of the debate – as a battle between those concerned with “bogus” students misusing loan entitlements, and those keen to preserve economic and skills gains as well as cultural enrichment – persists.

BBC Panorama broadcast its investigation exposing private providers for recruiting under-qualified foreign students in November of last year, just a couple of months after The Sunday Times accused universities of taking international students “ahead of” domestic students.

What is new about last Thursday’s report is that it calculates the costs of international students in as much detail as the benefits, finding that international students make a net average contribution to the UK economy that is ten times as much as they cost. For example, the 2015/16 cohort contribute £20.35bn over the duration of their courses. EU students make up 26% (58,960) of the 231,065 international students in that cohort, with non-EU students accounting for the remaining 74% (172,105).

The average EU student costs the UK £19,000 in teaching grants, student support and other public costs. The comparable figure for non-EU students is estimated at £7,000. They bring in £87,000 and £102,000 respectively through a combination of fee income, non-fee income (including student spending), and visitor income (from friends and family visiting the UK).

Countrywide impact

The net contribution of international students is between £0.9-2 billion in most UK regions, with a concentration in London (£4.64bn) and the South East (£2.44bn). The impact includes spending by universities (e.g. on supplies and staff), students and their visitors.

The report, in fact, gives a conservative estimate of the benefits associated with international students. This is for two main reasons, first, because international students who come to the UK to study at any other level – for example, those studying towards further education qualifications, or for English language courses – are not included in the data.

Second, the data does not cover students who stay on to work in the UK after completing their studies and the impact of their taxes and contribution to the workforce. This is understandable, they are no longer students. However, the takeaway is that the positive impact derived after an international student transitions from student status are not considered within the report, and as such makes it more than likely international students continue to contribute to the UK economy in a significant way after graduation.


Sean Coughlan of the BBC draws attention to HEPI director Nick Hillman’s comments that the UK should develop a more positive discourse surrounding the impact of international students. Press coverage in the BBC and the Financial Times gives weight to Hillman’s use of the report as evidence for why international students should be removed from the UK’s migration statistics.

The Financial Times includes a comment from the Home Office stating that there was no cap on the number of “genuine” international students who could come to the UK to study.

The notion that a more positive dialogue is needed on the impact of international students was reflected in the sector’s response. Universities UK chief executive Alistair Jarvis called for an expanded international communications campaign to be backed by the government, and pushed for post-Brexit policies such as improving post-study work opportunities, to encourage “suitably qualified” international students to apply to study in the UK.

Hollie Chandler, a senior policy analyst at the Russell Group, highlighted the role of a “smooth, proportionate and predictable” visa process in making sure international students have positive experiences studying in the UK, given it is such a lucrative and competitive market.

It remains yet to be seen whether the sector’s move to influence the debate on international students will stick. The report will be submitted to the Migration Advisory Committee, which is currently evaluating the costs and benefits of international students to the UK economy, before making recommendations to the government in September of this year.

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