Too much of a good thing?

Think tank: Social Market Foundation

Author(s): Zeki Dolen

June 25, 2024

This report from UK think tank the Social Market Foundation looks at international students and the financial stability of English higher education.

International students benefit the UK, but the speed of the increase in their numbers since 2019 has diluted these benefits and created pressures on student housing.

This Social Market Foundation briefing lays out how to manage their numbers to reduce these pressures without creating a financial stability risk for the higher education sector. International student numbers grew 37% between the student visa reforms of 2019 and the 2021/22 academic year. Post-2019 international student flows have had different characteristics, driven by master’s students from India, Nigeria and Pakistan, while Chinese and EU student numbers have stagnated and fallen. New international students are also much more likely to bring dependants.

Although international students bring many benefits to the UK, this rapid expansion has diluted these benefits while creating pressures on the student housing market. Meanwhile, universities have become overreliant on international fees for funding, despite this being a fundamentally insecure income stream, creating a financial sustainability risk. To control international student numbers without adding to the financial pressure universities are under, the government should limit the increase of international student numbers, particular where there is evidence of housing shortages, to ensure sustainable growth. To mitigate the funding shortfall this could cause, it should compensate universities with an increased teaching grant. It should also update the International Education Strategy with new targets for diversification of international student flows.

Finally, the government should consider reforming visa charges and salary thresholds to maintain the UK’s attractiveness to international students.