Economic Benefits of the Graduate Route

An independent thinktank has confirmed that the Graduate route benefits the UK economy by £70 million per year.

The Higher Education Policy Institute, together with Kaplan International Pathways, and the National Union of Students today published the results of their joint research into the Graduate route. 

The Graduate route is a post study visa which allows international students to remain and work in the UK for 2 or 3 years after their studies. To be eligible, the international student must have successfully completed their studies in the UK. The route opened in July 2021 and the report sets out key information from the first full fiscal year.

In the 2022/2023 fiscal year, there were an estimated 66,410 Graduate visa holders, comprising of 56,460 international graduates and 9,950 dependant family members.  The report notes that soon we will begin to see a decline in dependant family members, as the Immigration Rules were recently amended to restrict the ability of international students to bring their family members to the UK. 

The report states that the benefits to the UK in higher tax revenues is £588 million, or £10,410 per international graduate. After accounting for the impact on public services, with an estimated cost of £517 million, or £9,160 per international graduate, the UK receives a net economic benefit of £70 million, or £1,240 per international graduate. The figures entirely exclude any wider or long term benefits to the UK, such as international graduates remaining in the UK, to work and therefore pay tax, through other visa routes, such as Skilled Worker.

Why is this important? In March 2024 the Home Office commissioned a report from the Migration Advisory Committee to conduct a rapid review of the route, with results expected to be published on 14 May 2024. It is thought the government may decide to alter or close this route in their efforts to reduce net migration to the UK.

This research shows that the UK economy benefits from international graduates. The ability to remain in the UK, albeit temporarily, after studies is a big part of international student recruitment. Just one cohort of international students provides an impressive economic benefit of £37.4 billion to the UK.  The UK’s educational influence is significant, with one quarter of global leaders having studied in the UK, enhancing the country’s soft power.

The report emphasises the need for evidence-based policy decisions and warns against negative implications of restricting or abolishing the Graduate route. It stresses the importance of the Graduate route for maintaining the UK’s competitive edge and the net tax benefits it provides