International students worth £22.6 billion to economy

International students are contributing £22.6 billion (US$31 billion) to the UK economy, 10 times their cost, and are worth £310 per UK resident, according to a detailed analysis of the costs and benefits to the UK of welcoming 231,000 new international students each year.

The gross benefits on average amount to £87,000 for each student from the European Union and £102,000 for each non-EU student.

The analysis, The Costs and Benefits of International Students by Parliamentary Constituency, undertaken by London Economics, was published jointly by the Higher Education Policy Institute, or HEPI, and Kaplan International Pathways.

The findings will further support the argument of the universities sector that international students should be left out of the government figures for long-term immigration, which are used to set targets for cutting immigration levels.

Nick Hillman, director of HEPI, said: “International students bring economic benefits to the UK that are worth 10 times the costs of hosting them.

“Trying to persuade the Home Office that international students nearly always benefit the UK can feel like banging one’s head against a brick wall. In the past, they have not accepted figures on the benefits on the grounds that they ignore the costs. Our work, in contrast, includes all the potential costs and conclusively proves these are small compared to the huge benefits.”

He said HEPI welcomed the government’s decision to ask the Migration Advisory Committee to investigate international students and urged ministers and civil servants as well as the Migration Advisory Committee to take this new evidence “with the seriousness that it merits”.

The analysis found that the public costs of hosting international students, including education, health and social security, total £2.3 billion, which breaks down as £19,000 for each EU student and £7,000 for each non-EU student.

The net impact, that is, the benefits minus the cost, of hosting international students totals £20.3 billion.

The net impact is on average £68,000 for each EU student and £95,000 for each non-EU student. The net impact of international students on average per parliamentary constituency is £31.3 million, with students in one constituency, Sheffield Central, generating £226 million.

Linda Cowan, managing director, Kaplan International Pathways, said: “This research is different to previous work in a number of important respects. In particular, by calculating the net impact by region and constituency, the study shows that international students bring economic benefits to regions throughout the UK.

“We need a bold commitment from government as it considers the Immigration Bill to show the UK welcomes international students more than ever. A key step would be to stop counting students as immigrants in net migration statistics.”

The analysis found that the five regions experiencing the highest net impact of international students are London (£4.64 billion), the South East (£2.44 billion), the West Midlands (£1.95 billion), Scotland (£1.94 billion), and the North West (£1.91 billion).

Gavan Conlon, partner at London Economics, said: “This research fills important gaps in our knowledge: while we knew that the benefits of hosting so many international students are large, we did not previously know how limited the costs are. Nor did we know how the benefits break down geographically across the UK.

“It is vital that policy-makers do not ignore these findings. Migration policy needs to be more rooted in evidence than has been the case over the past few years.”

Responding to the new study, Alistair Jarvis, chief executive of Universities UK, said the report confirms the vital net contribution international students make to the UK.

“This is both in terms of their contribution to the economy, and their positive cultural and academic impact on campuses. It is clear that this positive impact extends to university towns and cities in all corners of the UK. It is estimated that international students support over 200,000 jobs in communities across the UK.

“Looking ahead, we need to see a new post-Brexit immigration policy that encourages all suitably qualified international students to choose to study in the UK.”

He suggested the UK should enhance the post-study work opportunities for qualified international graduates, “as many of our international competitors have been doing to improve their student visa offer”.

This should be coupled with an expanded international communications campaign, backed by government, to highlight that international students are welcomed and valued visitors to the UK, Jarvis said.

The analysis concentrates on the cohort of international – EU and non-EU – first-year students attending UK universities in 2015-16, which is the most recent cohort for which detailed data exist.