The past few months have been a roller-coaster for the UK’s approach to international students. The government rejected sector proposals for a post-study work visa in September, proposing instead to relax Tier 2 visa requirements for newly-graduating international students for up to 2 years and extend the time they can remain in the UK after graduation.
Then came the UK’s global education strategy, a plan to increase international student numbers followed swiftly by the shock announcement that students from the European Economic Area (EEA) would lose access to student loans and be required to pay international fees from 2021-22. The latter proposal has drawn consternation across the board, including from the EU Parliament’s Brexit Steering Group, policy experts and political opposition, and even former Universities Minister Sam Gyimah.
Finally, Jo Johnson, brother of Boris Johnson and another former Universities Minister, stepped in to try and save the day with a cross-party amendment to the government’s post-Brexit Immigration Bill seeking to bring back the post-study work visa. The amendment bears the signature of heavyweights including Shadow Home Secretary Diane Abbott and (somewhat surprisingly) Boris Johnson, and has the implicit support of Home Secretary Sajid Javid.
Amidst a sea of confusion, one thing remains clear: international students are good for the UK, and almost everyone wants to bring in more of them. Research by HEPI and London Economics shows that international students bring a net benefit of £20.3 billion to the UK, and that just 1 cohort of international graduates working in the UK can generate £3.2 billion in tax revenue. With the Augar Review proposing lower home fees and a tighter hand on university funding, universities are no doubt also looking at international students to make up the difference. The debate so far, however, has focused on whether to permit international students to work after graduation – what if we did it the other way round, and asked them to stay?
International education, Singapore-style
Singapore, which has been touted by Foreign Secretary Jeremy Hunt as holding lessons for the UK, has a unique model for encouraging international students not only to study, but to stay and contribute after graduating, rather than taking their talents elsewhere. Its Ministry of Education offers a Tuition Grant scheme for Singaporeans, Singapore Permanent Residents (who are non-citizens with indefinite leave to remain) and international students. The discounts, which differ according to whether someone is a Singaporean, Permanent Resident or international student, can be significant – for the upcoming academic year 2019/20, a LLB at the National University of Singapore will cost S$38,300 (£21,565) per year before the grant, and S$27,050 (£15,230) for an international student after.
The Tuition Grant is automatically awarded to Singaporeans. For non-Singaporeans, however, the scheme comes with a catch; in exchange for a tuition fee reduction, Permanent Residents and international students are obliged to work in Singapore (or for a Singaporean company abroad) for a total of 3 years after graduating. If they wish to break the bond or fail to fulfil its conditions, they must pay liquidated damages comprising the grant amount plus compound interest at a rate of 10 per cent per year of study.
Like the UK, Singapore is a world leader in higher education. Its 2 biggest universities, the National University of Singapore and the Nanyang Technological University, are leading institutions in Asia and come 23rd and 51st respectively in THE’s World University Rankings for 2019. The proportion of international students in Singapore is also comparable to that in the UK. Excluding EU students given their similar fee and visa treatment to home students, 13% of students in UK higher education were international students in 2016/17; in the same time period, international students made up around 10% of university students in Singapore.
Combined with the sector’s existing zeal for international student recruitment and uncapped international student numbers, a Singapore-style tuition grant policy could help the UK hit its target of 600,000 international students by 2030 and fill its persistent skills shortage with international talent.
What could it look like?
Such a scheme sounds ambitious, but it could be possible. A model can be found in the Commonwealth Shared Scholarship, which allows universities to submit bids for a fixed number of scholarships. Universities are responsible for recruiting and assessing scholarship applicants, while the Commonwealth Scholarship Commission is responsible for paying their tuition fees.
Similarly, an international tuition grant could be administered by universities in the first instance, with the government responsible for paying out the grants awarded. Universities could bid for a share of a fixed pool of grants, distributed fairly among the UK’s regions and nations. They would be free to allocate these grants to students based on merit and need, and possibly to further assign grants to different courses where they see fit. For example, a university with 500 grants which wanted to drive international recruitment for its new engineering department could allocate all the grants to that department, if it wished.
The government would then be responsible for paying the home fee for undergraduate students awarded the grant, and an amount equivalent to a postgraduate loan otherwise, for the full duration of the course. This would essentially limit the upfront cost of the grant to that of a home student’s loan.
Like in Singapore, the grant would come with a multi-year bond commencing after graduation. This would require the recipient to work for a UK-based company or its overseas subsidiary, or to become self-employed as an incorporated company in the UK, for a cumulative and fixed number of days within a fixed number of years. Periods of unemployment and job-seeking would not be counted against the bond, and failure to complete the terms of the bond would require the payment of liquidated damages (barring exceptional circumstances such as becoming unfit for work due to disability). The bond could even work with a post-study work visa, allowing recipients a long minimum period to seek work in the UK before having to apply for an extension.
What are the challenges?
Any government looking to implement this policy will face two key challenges. The first would be the upfront cost of the scheme. International tuition grants would require the government to pay upfront without any obligation on students to repay them. Giving the entire 2016/17 cohort of over 235,000 new international students in HEPI and London Economics’s tax revenue study a tuition grant equivalent to the maximum tuition loan at their level of study, as outlined above, would cost around £2.4 billion a year at home undergraduate fees of £9,250. If home undergraduate fees were dropped to £7,500, as recommended by the Augar Review, £178.5 million would be shaved off that number.
In practice, however, the number of tuition grants is likely to be strictly limited to control the impact on labour supply. The same study found that on average, only around 30,000 international students per year stay on in the UK without any incentives. This means that offering tuition grants to just 10% of each year’s cohort could potentially provide a sharp boost to student numbers, more than double the supply of international graduates staying on to work after graduation, and pay for itself in the long term through increased tax revenues and greater net contributions by the international students.
The second key challenge would be winning the political argument. The Migration Advisory Committee’s report on international students is symptomatic of the anti-immigration sentiment that pervades much discourse around international students. Rebuking the sector for trying to drive demand for education through work rights, it warns that a “post-study work regime could become a pre-work study regime”. It might be difficult, in a political climate that is hostile to immigration, to suggest a policy that amounts to investing taxpayer money to encourage (short-term) immigration that delivers long-term economic benefits.
Difficult, however, does not mean impossible. The fact that a post-study work visa proposal has broad cross-party support is a promising sign of a narrative shift on international students. The government’s commitments in its Immigration White Paper to accepting “intermediate”-skilled workers for Tier 2 visas, ensuring international graduates “can switch easily, and in-country, into highly-skilled work” and working with “the education and business sectors to develop proposals to support students to move into work-based visa routes” also signal at least some recognition that international graduates, and the skills they bring, are too economically valuable to pass up.
There is now broad, if occasionally grudging, acceptance across government, universities and businesses that international students are worth it. Singapore has benefited from its strong universities not only by educating its citizens, but through attracting the best and brightest from around the world to study and asking them to stay on. To raise international student numbers, bring in much-needed talent and help the university sector fill in any post-Augar funding gaps, the UK should consider following suit.