Will international recruitment fall even further?

In 2023, there were 457,673 sponsored study visas granted to main applicants – 5 per cent fewer than in 2022, but 70 per cent higher than 2019.

That’s the big headline stat (in its own box out) at the top of this quarter’s Home Office immigration figures, and if anything it underlines the major lobbying problem that the sector faces over international students.

On the way up, because quarterly figures always include the 12 months to the cut off date, the dramatic increases in international students we’ve seen since 2019 have tended to look more gentle than they really were – catching policymakers out when the figures catch up.

Now, to read the press, you’d think that numbers have fallen off a cliff – but the nature of that smoothing effect, combined with the rapidity at which the sector has hit (and exceeded) its ten year target for international students makes it look like a sector crying wolf.

And if anything, under pressure to deliver on broad-brush commitments to bring numbers down, that 5 per cent figure runs the danger of looking too modest for ministers in an election year.

So what’s really going on?

Up on 2019

This chart shows the sharp increases in both the number of main applicant and dependant visas granted following the pandemic and UK’s departure from the EU.

The majority of the increase in main applicants between 2019 and 2023 were from Indian (+85,849) and Nigerian (+35,366) nationals – this chart shows there were 120,110 sponsored study visa grants to main applicants that are Indian nationals in 2023 (26 per cent of the total) – this was 14 per cent fewer than 2022.

Chinese nationals are the second most common nationality granted student visas, accounting for 24 per cent of the total. These 2 nationalities together account for around a half of the international students who come to study in the UK.

Those little crosses in the earlier chart tell the story on dependants. There were 143,595 visas issued to student dependants in 2023, up 7 per cent compared to the year earlier but almost 9 times higher than 2019 – the smoothing effect means that it will take time for the impact of the PGT dependant ban to show up.

Then on the graduate route post-student work visa (which the Migration Advisory Committee is currently reviewing), a total of 114,409 extensions were granted to main applicants in 2023 – some 57 percent (+41,430) higher than in 2022 (72,979). That either underlines what a success the policy has been in attracting students, or signals a need to kill or restrict the route, depending on your political perspective.

Quarterly detail

A dive into the spreadsheets tells a more interesting story. If we look at main applicant visa grants, the story from last quarter was the flattening off in Q3 – which will have generated a situation where plenty of universities’ targets for recruitment weren’t met:

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Now we can see what happened to January starts – and this time there’s a marked downturn:

The question is whether that represents a new floor, or whether that figure will fall further – and what it tells us about September entry.

We still don’t get figures on what level of programme a visa has been issued for, but a clue comes in which countries have seen the sharpest falls.

Here’s the impact on Nigeria:

And here’s the impact on India:

That’s all partly to be expected – Nigerian students tended to have a much higher student-dependant ratio in the boom times, and so it figures that a dependant ban has caused a sharper fall.

But the India drop is likely to be both about dependants and wider issues like reputation, signalling and cost of living – and on that last one there’s little that immigration policy change can do to address what the British Council says will cause a growing number of international students to reconsider applying to UK universities in 2024:

It says that in 2023, the pound sterling appreciated in nominal terms against the local currencies in 11 of the 12 largest student markets for UK education outside of East Asia – meanwhile, in East Asia, the pound strengthened by at least 4 per cent in each of the 12 largest student markets.

Taken together, these 24 markets accounted for more than 87 per cent of all UK study visas issued in the first three quarters of 2023 – and the effect of a stronger pound sterling in 2023 will flow through to 2024, as prospective students and their parents experience “sticker shock” when viewing UK fees denominated in their local currency:

It will be felt most acutely in some of the UK’s largest student markets – Nigeria, Turkey, Pakistan and Ghana – many of which are emerging economies. Yet even in the developed markets of East Asia – Australia, Hong Kong, Japan, Singapore, South Korea, Taiwan – local currencies depreciated significantly against the pound in 2023.

What could this mean for you? Here DK has plotted dependency on international fee income for the most recent year that we have it – 2021/22. A lot has happened since – but it should give you a broad sense of who should be biting their nails right now:

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And as trends differ by country of domicile, DK’s also done a dashboard to help you see which providers are exposed to changes in recruitment from which countries.

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Graduate route panic

The question of whether a new floor is being reached or whether falls are coming (and whether either have been priced in at university or sector-wide level) probably explains the panic at Universities UK over the review of the graduate route.

It points out that data from Enroly in January suggested that international student demand for the UK is down significantly on last year, with overall deposits down by more than a third on the same point in 2023.

Meanwhile data collated by IDP also indicates close to half of applicants (45 per cent) would likely change or consider changing their study destination if the post-study work period was shortened – a third (37 per cent) said the government’s intention to review the Graduate Route visa has meant that they are now re-considering study abroad plans or inclined to choose another destination.

Whether politicians will focus in on the quarter by quarter drama and hold their nerve on the package that’s already in place, or will be under pressure to be seen to go further based on the “smoothed” figures is something we’ll doubtless start to see in coming days.

Either way, with contraction now pretty much a certainty, the other questions concern whether international students can actually pay once here.

Can’t pay won’t pay?

Let’s imagine you’re an international PGT student who applied in 2022-23. The Home Office told you that you’d need £9,207 to live on outside of London – so you budgeted for that. Your agent likely told you that was an overstatement, but you went for it anyway. You check the university’s cost of living pages, and voila – £9,207 for 9 months looks do-able. So you budget your £15k fees and your £9,207 maintenance.

The currency in your home country then collapses in comparison to the pound, and so you borrow £3k of it to get past the Home Office on entry. The university offers three instalments after all.

You rock up in the UK and despite what the agent said, there’s no accommodation in your price range. What there is is both much more expensive than the university said housing would be, and much further out from campus – increasing your transport costs. So having paid 50 per cent upfront, once you’ve found a roof over your head, you try to find a job and find enough money to eat.

The campus food bank helps – but that does involve coming to campus. You daren’t apply for university hardship funding because you hear that if the university found out you can’t really support yourself it’ll report you to UKVI. So on you struggle, but by the end of October you’re being threatened with eviction if you don’t pay your rent, and withdrawal if you don’t pay your fees.

The landlord said full year upfront or out because you had no guarantor. So you paid a deposit, and then you couldn’t pay the full year’s worth plus the next instalment of your fees by the end of October. You pay the landlord. You eat. You ask the university for a more sensible payment plan. But the Finance Office has a playbook – threaten and threaten, in bigger and red fonts, until they pay. You end up withdrawn, and you can’t even afford the air fare home.

Turns out the Home Office hadn’t updated that figure on maintenance in almost five years (and it still hasn’t), the university’s cost of living info was also donkeys years out of date, the agent lied but still got their £3k cut of your deposit, and nobody clocked the currency issues – but everyone agrees it was definitely all your fault.

Once you’d been withdrawn, nobody even contacted you to ascertain why you hadn’t paid – what might have led to that, what might have helped, what went wrong.

Maybe when the UK had a tiny number of international PGTs, when inflation was bubbling along at under 1%, this still happened to a handful of people.

But right now all my conversations with SUs suggest that it’s happening to tens of thousands of people, who travel around the world to improve their lives in pursuit of a British education.

Oh and then you were spat at on the bus, racially abused at work, and local politicians blamed you for their local housing crisis. It’s a wonder to me sometimes that our international numbers haven’t collapsed to zero.

Yes, I know, not all universities are like this and not all students are in this situation. There’s some decent and compassionate practice around. But the main bits are almost universal.

Once a body like a university becomes dependant on an income stream, it’s very hard to wean off that stream. But if contraction isn’t just about immigration changes and is also about cost of living issues, the need to take steps to do so humanely really matters – lest a reputational spiral of cruelty gets added to the mix of those immigration policy changes and the general mood music around the UK as a preferred destination.