We still don’t have a clue about the income or cost from transnational education

When people talk about international transnational education (TNE), we tend to focus on the benefits for the UK.

Educating students living overseas clearly expands the UK’s soft power, and generates income both for institutions and the economy as a whole. But the core of the argument tends to be that it makes a lot of money. Some £23.7bn from international recruitment in higher education, and a further £2.97bn from TNE (this latter across all educational sector)

Beyond this, TNE has received less push-back than the more common, immigration-focused, approach to educating the world – although occasionally UK based university employees have questioned the wisdom of spending money overseas while cutting at home.

So when the Department for Education publishes data on the UK’s revenue from international education related activity including transnational education, there’s no way of understanding (at a sector or provider level) whether any or all of this activity actually turns a profit. At a point where universities are struggling to make home campuses pay their way, it feels like kind of a big gap in our understanding.

That’s not to say that we have a firm understanding of the income end of the equation either. The latest (2022) data is produced based on a new methodology, although we do get a calculation using the old methodology (£23.07bn for HE, £2.72bn for TNE generally) to help us compare with previous years. What’s the difference? Well, the new routine draws on a March 2023 report from LSE consulting which has tweaked the HE related definitions to include asynchronous online learning, and has added assumptions for other course fees.

Glaring holes still persist – estimates of international student expenditure draw from the 2021-22 Student Income and Expenditure Survey (SIES), uprated for inflation. At least the use of the London Economics 2011 data(!) from 14 provider survey responses(!!) to estimate other international provider income has been discontinued – but it has been replaced by simply ignoring the fact that providers may make overseas income outside of tuition fees, TNE, and research. The pathway provider income data is still provided by pathway provider Kaplan.

However, TNE income is gathered via information on TNE income in the annual financial return and published by HESA – though HESA notes that the data is new and thus likely incomplete. The kicker here is that data is only available for the devolved nations – DfE do a per student income estimate and scale it up to the total UK number!

For non-credit bearing and FE course delivered overseas by HE providers, we guess(!) based on the proportion of overseas HE fee income, as the former is not split by domicile.

To be fair to the department, the problems with the AFR for stuff like this are well known, and OfS is supposed (at some point) to step up and develop better ways to regulate this activity. It will find that the problems are the diversity of practice and income streams – just as DfE has found. It’s worth spending the rest of this piece going over them.

Most famously, some institutions have their own overseas campus – the University of Nottingham campuses in China and Malaysia are a good example of this approach. Digging into Nottingham’s annual accounts, we learn that the UK university owns just under three tenths of the Malaysian campus (valued at 13.3m excluding intellectual property), and just under four tenths of the campus in China (valued at £49.6m excluding intellectual property).

It receives management fees for providing academic quality oversight, and a number of staff are seconded to one of the two overseas campuses for up to three years. In total, for 2024, we saw about £11m of income from China, and £2m from Malaysia – with significant sums still owing from both as of 31 July 2024. This is only direct income – in 2025, the university estimates the value of the relationship with China as between £37m and £70m annually. Annually, Nottingham spends about £350k in Malaysia each year – nothing in China.

Nottingham has been at this for a long time – other providers are later to the game. Middlesex University has campuses in Dubai and Mauritius. Picking apart the finances here suggests that the wholly-owned Middlesex International (Dubai) owns 51 per cent of Middlesex International (Mauritius). Heriot-Watt University also has campuses in Dubai and Malaysia – the latter of which is wholly owned.

Other providers enter into relationships with overseas organisations – the University of Liverpool has a relationship with Xi’an Jiaotong University that goes back to 1980 that drives both overseas and dual-base provision. The University of East London has partners in Europe, Africa, Asia, and the Middle East. Clearly the broad concept of partnership means very different relationships in different places, and we’re including everything from lengthy high-level strategic partnerships through to something closer to the partnership arrangements that UK providers often have with colleges within the UK – all at vastly variable scales of financial and reputational investment.

At first glance collaborative provision feels pretty similar – but in TNE-speak this is broadly equivalent to franchising: where a qualification is awarded by one organisation but taught and/or supported by another. Liverpool John Moores, Cardiff Metropolitan, London Metropolitan, and Greenwich are the big players in this space. LJMU has a global network of partners that offer UK qualifications it validates, in many cases allowing students to start abroad and complete their studies in Liverpool.

This category of students is rounded out with those studying via distance, flexible, or distributed learning. By the nature of such things, students are resident in every corner of the world and study at pretty much any level or intensity you can imagine. The University of London and the Open University are the big players here – with other universities (Oxford Brookes and finance, Edinburgh Napier’s popular suite of online MBAs, Salford’s professional and vocational offers) and specialist private providers (Kaplan, Arden) growing quickly.