The impact of international students on the UK economy

A report published by The Higher Education Policy Institute (HEPI) has found that in the financial year 2021/2022, international students contributed a net income of £37.4 billion to the UK economy. This is a 58% net increase from the financial year 2015-2016.

The report considers students from a range of higher education courses from pathway to PhD and accounts for tuition fees, non-tuition fee expenditure including living costs and income associated with visits from friends and family. The report does not consider the wider contributions from employment-related taxes which many students will later pay into the UK economy.

The policy

Student numbers have increased in recent years in line with Government policy, as it was at the time, and its recognition of the financial and academic value provided by international students. In 2019, the UK Government at the time published an International Education Strategy which proposed to increase the value of education exports to £35 billion per year by 2030 and to increase the total number of international students to 600,000 by 2030.

In a policy U-turn, the Home Secretary is now proposing to reduce the numbers of international students. On 23 May 2023, she announced plans to implement the following:

• Removing the right for international students to bring dependants unless they are on postgraduate courses currently designated as research programmes;
• Removing the ability for international students to switch out of the student route into work routes before their studies have been completed; and
• Reviewing the maintenance requirements for students and dependants.

If these proposals are implemented, it is currently anticipated that they will be brought into force in January 2024 following the Home Office’s consultation with UK universities.

The UK Government claims to be committed to ‘attracting the brightest and the best to the UK’, but it is difficult to reconcile such a statement with these proposed measures. It is expected and intended that these policies will deter many high achieving and talented students from applying to the UK’s world-class universities.

The Home Office could consider whether targeting international students to reduce net migration is a wise policy decision given the financial and academic benefits associated with the international student population.

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If you wish for further information or wish to discuss how we can help you, please contact Trainee Solicitor, Megan Moorhouse or another member of our Immigration Team who will be happy to assist.