UK: Budget cuts may drive numbers down

Britain is the second most popular destination for students from overseas, after the US and the UK receives more than 350,000 international students each year, more than 20% of the world's share. But university leaders fear public spending cuts over the next three years may put the strength of the higher education sector at risk.

Last week the Russell Group of older, research-intensive universities warned that the projections beyond budget cuts and efficiency savings announced just before Christmas could have a devastating impact. By laying itself open to the charge of 'talking down' its strengths in its effort to head off the cuts, the group risks bringing about the very crisis in international perception university leaders are trying to avoid.

There is no doubt universities in the UK have been spectacularly successful in recruiting international students over the past decade. Britain's advantages include universities and courses of internationally recognised quality, efficient three-year degrees (except in Scotland where four years is the norm) and English-language tuition.

Many UK universities have invested in special facilities for international students to ease their transition into the system, and some have partnered with private sector companies to provide special bridging courses to bring prospective students who lack study and linguistic skills up to speed.

While not all international students pay higher fees than UK nationals, the revenue they bring to universities is a significant revenue stream that is entirely within universities' control without regulation by government (other than through visa policy) or by the funding agencies.

In 2007 the now-defunct House of Commons Education and Skills Committee told universities they could find themselves reliant on an income that is not stable in the medium or long term if they allowed recruitment of international students to be driven by short-term gains in fee income.

No university would ever admit to that motivation but, instead of longer term relationships with specific overseas universities, the sector still regards international recruitment as a crucial marketing role.

The committee told universities that as the UK could not compete on price it had to rely on quality. It is this quality that the sector's leaders fear may be under threat.

Most home students in the UK pay an annual tuition fee, currently capped at £3,225 (US$5,242), and are able to borrow at a subsidised rate to cover the cost with the loan repayable after graduation (subject to an income threshold).

There are complex exceptions arising from the devolution of powers to Scotland and Wales, where in effect students from those regions studying at university in their home country pay no fees. Students from the European Union and a number of other categories such as refugees pay tuition fees at the home rate.

All other students pay fees at rates set by the admitting institution and there is no tariff - to operate one would be seen as an illegal cartel. Generally students pay more for courses in medicine and in laboratory-based subjects than for so-called 'classroom' subjects where capital costs are lower. Fees range from £6,750 to an exceptional £18,000 per year depending on the institution, the level of course and the type of course, according to the latest survey by Universities UK. Most are between £8,000 and £10,000.

Fee differentiation was introduced in the late 1960s, culminating in 1980 with the decision by the incoming Conservative government of Margaret Thatcher that universities should charge overseas students the full cost of a course of study. This decision (which could not apply to students from the European Community which Britain had joined in 1972) caused consternation to many members of the Commonwealth.

The most striking but unsurprising trend of recent years has been the growth in the number of EU students: they now make up almost 41% of all international students on undergraduate courses in the UK.

In 2007-08, the most recent year for which figures are available, there were 137,382 international students in undergraduate courses, of whom 55,829 were from the EU. The big three European senders are Ireland, France and Germany which together comprise a third of EU students. Poland last year overtook Cyprus to take fourth place with 9.3%.

Of the 81,553 non-EU students, 16,887 (20.7%) were from China (down from 22% the previous year), with Malaysia (7,684, 9.4%), Hong Kong (6,614, 8.1%) and India (4,247, 5.2%) the next largest groups.

Year-on-year variations in distribution between sender nations are small, according to the analysis published by the Complete University Guide. Revenue from international students is estimated to exceed £2 billion - about a tenth of the universities' annual income.

There have been a series of warnings over the years that the UK university sector is too dependent on revenue from non-EU international students. With competition from Australia ever more intense and a recognition by the US that it needs to restore its reputation as the world's leading provider, there are signs the presence of new players in the market - India, Malaysia and China prominent among them - will have an inevitable impact.

One of the UK's strengths has been its generally open attitude to other cultures and there has yet to be any significant backlash as a result of its involvement in the Iraq conflict. But there is a growing concern that this may not be sustainable as the recession impacts on the employment market.

Claims of language problems and lowering of standards to accommodate 'paying customers' surface from time to time within the sector but have yet to dent the UK's international image. Self-flagellation may fill that vacuum.

david.jobbins@uw-news.com