What does history tell us about vulnerability to international recruitment changes?

International students from outside the EU are an important marker of prestige for some UK universities, signalling an institution’s appeal in the global higher education market.

They are also a critical source of funding for UK higher education institutions, particularly for research-intensive universities that use their fees to cross-subsidise prestige-producing activities such as research. As the former Minister for Universities David Willetts put it, non-EU international students are the UK’s “great British export opportunity”. However, the shape and scale of this “export opportunity” is likely to change in light of the Covid-19 pandemic. We should expect a reduction in the number of overseas students seeking to gain a degree from a UK university. However, what can history teach us about which universities are more vulnerable to these changes?

A potted (recent) history of international students in UK universities

The sector’s reliance on non-EU international students is a relatively new phenomenon, coinciding with sector-wide reforms that sought to make universities more autonomous from the public purse to fund their activities. In 1979, the first Thatcher Government decided that students coming from outside the then European Economic Area had to pay for the full cost of their higher education. At first, the sector reacted virulently, arguing that this threatened UK’s cosmopolitanism. However, ten years later, international students had not stopped coming and UK institutions understood their potential as an important source of discretionary income: an industry flourished.

Since the late 1990s, until very recently, subsequent governments developed policies that attempted to either foster or restrict international student mobility to the UK. These policies, as Sylvie Lomer explains, were motivated by ideas that understood overseas students as beneficial for the economy –like Tony Blair’s 1999 “Prime Minister’s Initiative” for international students (PMI)– or as part of the solution to reduce net migration, an electoral commitment of the 2010 Coalition Government. In this sense, this recent history of policy-making around international students gives us the opportunity to understand the impact of a drop in incoming international students to UK higher education, which is the likely outcome of the COVID-19 pandemic.

The impact of a drop in international students: which universities are more vulnerable?

I’ve looked at the impact of the policies above on the distribution of international students across the sector. I was particularly interested in understanding the market value of a degree in different UK universities depending on the conditions in which international students make the decision to come to UK higher education. For instance, after 1999, visa application procedures became shorter and cheaper, and international students had access to more scholarships and had it easier to work in the UK during their degrees and after graduation. Conversely, after the election of the Coalition Government, visa conditions tightened and international students were required to return to their home countries after finishing their degrees. This had a profound impact in the numbers of students coming to the UK, particularly to certain universities.

I’ve found that, after the election of the Coalition Government in 2010, those universities that are regarded to be less prestigious suffered a significant hit in the number of international students they recruited, both at the undergraduate and master’s level. Using a HESA bespoke dataset with information on UK higher education students in Full-Time Equivalent numbers (FTE) from 1995-96 to 2016-17, I looked at the evolution of non-EU international student numbers across four groups of universities based on reputational disparities:

• “golden triangle” universities: Oxford, Cambridge, UCL, Imperial, LSE and King’s;
• other Russell Group institutions;
• other  universities founded before 1992; and
• new institutions that received their university title after 1992.

Figures 1 and 2 show this evolution at the undergraduate and master’s level respectively.

Figure 1. Evolution of undergraduate non-EU international student numbers across institutional types.

Figure 2. Evolution of master’s non-EU international student numbers across institutional types.

In figures 1 and 2 we observe two significant episodes of plateau and decline, particularly among post-1992 universities:

1. between 2003-04 and 2006-07, coinciding with a period where pound sterling was particularly strong, and
2. after the election of the Coalition Government in 2010. The latter was especially stark for post-1992 universities at the master’s level. On the other hand, the “golden triangle” and other Russell Group universities managed to keep their international student intakes growing.

International student recruitment in times of stagnation: lessons from history

A possible interpretation of my findings is that, during times of stagnation caused by circumstances that make international study more difficult, the institutions that suffer the hardest hit are those that are perceived to be less prestigious. In the case of the COVID-19 pandemic, this may also be the case both during the pandemic and when international returns to “normal”.

It seems plausible that UK universities will start the new academic year online. This raises questions about the preferences of prospective international students: will traditional status hierarchies remain relevant for international distance learning? Will prospective international students prefer universities with a long history of distance learning instead, such as the Open University? Or will these students prefer to access online higher education at home? All these scenarios are possible and will probably coexist.

It is reasonable to believe that those students who would have been otherwise physically mobile, will still value status hierarchies. Moreover, on the supply-side, well-resourced research-intensive universities, which sit at the top of these status hierarchies, will be better prepared to invest in producing high-quality online education that goes beyond imitating traditional lectures and seminars, which will make them more attractive to international students.

When the pandemic ends, the world will be in recession, which will decrease students’ capacity to fund their studies abroad. It is reasonable to think that newer UK universities, which charge substantially lower international fees, cater for the global less affluent middle-classes, which will be severely hit by this economic milieu.

Recent history shows that, in competitive environments, less prestigious universities are more vulnerable to lose out when the number of incoming international students is reduced. This situation may be aggravated by the current pandemic.