Income from non-EU foreign students dwarfs costs – Study

International students in London are contributing £2.8 billion (US$4.3 billion) a year to the UK economy through fees and spending that they, their friends and families bring to the UK.

Some £1.32 billion is spent on fees, £1.36 billion on living costs and £121 million through visitor spending, says a new report.

The £1 billion of direct spending on tuition fees paid by non-European Union international students from countries such as China and India represents 39% of the total fee income of London’s universities; and total spending by international students supports nearly 70,000 jobs in the UK capital, researchers found.

The economic contribution of international students is documented in London Calling: International students’ contribution to Britain’s economic growth, a report published by London First and the consultancy PwC. It was supported by a quarter of London’s universities.

The report focuses on the net contribution made to Britain by students from outside the EU and aims to influence the ongoing political debate in the UK about immigration, which was high on the agenda during the recent General Election. David Cameron’s new government, which has a narrow majority of just 12 MPs, is expected to bring in more curbs on immigration.

Baroness Jo Valentine, chief executive of London First, said: “International students are made to feel unwelcome because of anti-immigration rhetoric – and the fact that they are currently included in the government’s net migration target. But students’ expenditure here is a modern-day export: they pay substantial fees and contribute significantly in consumer spending.”

The report claims, for the first time, to quantify the positive effect of international students in London on the UK and makes suggestions to future governments about how to maximise their beneficial impact.

Julia Onslow-Cole, head of global immigration at PwC, said: “While politicians recognise the importance of international students, there has been considerable debate over the economic value.

“This is the first study to quantify the benefits of student migration. We need more hard data like this to inform immigration policies and targets.”

While international students have often been mentioned in political debate about the high rate of immigration, the report says only 12% of international students remain in the UK after their studies have finished, so that employers could make use of their skills.

“The vast majority is likely to return home to work,” the report says. “Around 5,000 international students switch into work visa routes and enter the UK labour market each year after completing their studies.”

The majority of those work in education and cultural activities, financial services, and retail, earning an average salary of £19,000 (US$29,500) per annum and contributing an estimated £9 million (US$14 million) a year to the UK government in income tax and £17 million (US$26 million) a year in National Insurance contributions.

The report says suggestions that international students are a net drain on the economy are “wrong”. The oft-cited concern about rising immigration in general is the pressure it puts on public services such as schools and the National Health Service, or NHS, and the cost in welfare benefits.

The report points out that international students have no recourse to public welfare benefits as a condition of their visas. Although they do consume public services, including use of the NHS, at an estimated cost of £540 million, this is dwarfed by their contribution to the economy.

London’s international students, for instance, bring a net benefit of £2.3 billion (US$3.6 billion) per annum to the economy, or around £34,122 (US$53,000) per student on average, the report says.

“These students are attracted to London for a number of reasons, including the reputation of London’s universities, quality of education, English-speaking education and London’s status as a social and cultural centre,” the report says.

London has “more world-class universities than any other city in the world” and as the “most popular city in the world for international students”, hosts 40,000 from continental Europe and 67,000 from the rest of the world, the report adds.

More than one in five of the 310,000 international students studying in the UK studies at a London university and 18% of students in London are international.

“The £2.3 billion [net] benefit of international students illustrates there is a huge amount at stake,” said Onslow-Cole.

Importance of feeling welcome

The report says more than 90% of those students who felt welcome would recommend studying in the UK to their friends and family. However, some 24% of students studying in London did not feel welcome.

This may relate to the fact that more than one in three students responding to the survey found Britain’s complex immigration system negatively affected their experience of studying in the UK and most students commented on the difficulty of securing work in the UK after they had completed their studies.

Anecdotal evidence suggested they feel that UK employers are deterred from recruiting international students because of the bureaucratic process and cost of securing a sponsor licence, the report said.

The report called for the abolition of the net migration target, which is dependent on the number of British citizens choosing to work abroad or return home.

It recommended that students should be defined as temporary visitors not migrants, which would remove them from the immigration debate, unless they obtain a job post-study.

Baroness Valentine said: “As a matter of priority, our new government should follow the lead of Australia and Canada and reclassify international students as temporary visitors, not migrants. It makes no sense to imply through classification and rhetoric that they are unwelcome, which is harming our universities’ abilities to sell education to talented students around the world.”

However, Immigration and Security Minister James Brokenshire, commenting on the research, told the Financial Times that it was right to include students in the net migration figure because “all immigrants who are in the UK have an impact on our communities, on housing and on our public services”.

He said that official statistics showed that 85,000 of the 133,000 non-EU students who entered the country last year did not leave and the government would pursue “further reforms to tackle abuse”.

The report also recommended that it should be made easier for international students to work in the UK post-study, either by reinstating the automatic option or making it easier for international students to work in the UK for a few years after graduation.

In-bound student trends

The report provided some interesting background information on significant trends in international students coming to study in the UK in the past five years.

Since 2009-10 the number of international students from non-EU countries studying in UK higher education institutions has increased by 6%, but there have been conflicting trends below the headline figure.

The number of students from India studying in the UK has fallen by 50%, whereas the number of students from China has risen by more than 50%.

The number of students from Singapore and Hong Kong has risen by 80% and 50% respectively.

Nicola Dandridge, chief executive of representative body Universities UK, said: “UK universities remain extremely attractive to international students, at a time when there is growing demand for quality higher education across the world.

“If the UK wants to fulfil its potential in this growth area, it must present a welcoming climate for genuine international students and ensure that visa and immigration rules are consistent and properly communicated.”


The new conservative bill on immigration has already stated there will be no limit to universities on how many international students they can recruit. However, nothing has been said about how UK universities are treating international students as cash cows. Try reporting on that!

Ray K P Lee on the University World News Facebook page