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Graduate visa critically important for UK jobs, growth and global ambitions
Last updated on Friday 1 Mar 2024 at 12:13pm
Since the launch of the government’s International Education Strategy in 2019, growth in international student recruitment to the UK has delivered a boost of more than £60 billion to the UK’s economy, new analysis shows.
- Graduate route visa is vital to the UK’s attractiveness as a study destination says Universities UK, as it calls on all political parties to commit to retaining a competitive post-study work offer.
- Emerging data shows international student demand and enrolments are falling, with reductions at postgraduate level most significant.
- New survey shows only a very small minority (3%) of the public realise the scale of the economic contribution made by international students, or the size of the contribution to the NHS via the Immigration Health Surcharge.
The analysis by Universities UK (UUK), drawing on London Economics data, demonstrates the extraordinary economic contribution from increased international student numbers in that time; a period which saw the launch of the Graduate visa which allows students to stay and work in the UK after completing their studies for two or three years. The £60bn in additional economic impact over the duration of their studies sits alongside huge cultural, academic, and soft power benefits from attracting global talent into UK higher education.
The UK government’s International Education Strategy aimed to improve the UK’s competitiveness in international recruitment and drive growth, reversing more than a decade of stagnation in international student numbers. It set the ambition to host at least 600,000 international students each year and announced that a new post-study work offer would be reintroduced. Together, these actions helped the UK regain our position as a leading destination for international students.
However, recent policy and rhetoric puts our continued success at risk. Uncertainty over the long-term commitment to the UK’s post-study work offer - most recently following the announcement that the Migration Advisory Committee would be asked to review the Graduate route - is impacting on the decision making of prospective students. Increases in visa fees and new restrictions on the ability to bring dependants have both had a negative impact on the perception of the UK as a study destination.
Data has shown uncertainty over post-study work opportunities is an important factor in international student decision making, while a recent survey undertaken by UUK suggests that international student numbers are now declining, following a peak in 2022/23. The results, from over 70 universities, reveal a significant decline in enrolments, especially of postgraduate taught students – which were reported to be down by more than 40% in January 2024 following the immigration rules changes.
This picture is reinforced by the latest data from Enroly, a platform used by around 60 universities. It suggests that international student demand for the UK is down significantly on last year, with overall deposits down by more than a third on the same point in 2023. Meanwhile data collated by IDP also indicates close to half of applicants (45%) would likely change or consider changing their study destination if the post-study work period was shortened. A third (37%) said the Government’s intention to review the Graduate visa has meant that they are now re-considering study abroad plans or inclined to choose another destination.
Most universities are bracing for further drops in international student numbers this autumn as the government’s reforms take effect and UUK calls the outlook for September “bleak.” The British Council have also warned that UK universities face “slower growth rates and rising competition” for international students.
A significant further reduction in the number of international students would threaten a hugely significant economic contribution. However, new survey data from Censuswide, commissioned by UUK, suggests the public are largely unaware of the scale of the positive economic contribution international students make to the UK economy. Indeed, only 3% of 2,000 adults surveyed correctly answered that the annual economic impact of one year’s intake in 2021/22 was above £10bn – and the exact figure is £41.9bn.
Similarly, when asked how much international students should pay every year towards the NHS, irrespective of whether they use it, only 3% selected the highest option offered, of £700, with the average figure across respondents coming out as £346.59. The NHS surcharge is currently £776 per year. Research from London Economics calculates that in 2021/22, the annual cost per student or dependent to the health service was £232, making international students a substantial net contributor to the NHS.
The UK is extremely fortunate to be a popular destination for international students. The whole country benefits from their decision to spend a few formative years with us. I regret the fact the government appears to want to diminish our success in this area. Our new data shows that if they wanted to see a reduction in numbers, they have already achieved that through policy changes introduced earlier this year. If they go further, they will damage the economies of towns and cities throughout the UK, as well as many universities. Given we should be doing everything we can to promote economic growth, this seems to be getting the priorities wrong.
“Our polling shows the vast majority of the public have no idea of the scale of the economic contribution international students make.
“Beyond playing a major part in the growth which has made a £60bn economic contribution, the Graduate visa has helped to keep the UK as a top study destination in an increasingly competitive global market, supporting thousands of jobs up and down the country and bolstering the country’s reputation and soft power influence. The students who have chosen to study here because of it have helped to make our universities culturally vibrant international places of learning.
“The number of international students coming to the UK is already falling, but there is now a real danger of an over-correction.
“We call on all political parties in the run up to a general election to reassure prospective international students that the UK remains open, and the Graduate visa here to stay. Any further knee-jerk reforms could have serious consequences for jobs across the country, economic growth, and UK higher education institutions.
Vivienne Stern MBE
Chief Executive, UUK
Business benefits from being able to attract talent via the Graduate visa, and business leaders have also expressed concern about the impact of any changes to this route.
International students make a big contribution to local economies right across the UK while they are here. When they go home, they are ambassadors for the UK around the world. Selling a British education is an export success story for the UK. That's why business backed the International Education Strategy and the re-introduction of the Graduate Visa route.
“This analysis shows that speculation comes with a cost, with uncertainty surrounding whether the Government will change or withdraw the graduate visa already damaging UK universities' competitiveness.
John Foster
Chief Policy and Campaigns Officer for the CBI
We support the Graduate visa route as it gives small employers an opportunity to recruit skilled talent with reduced bureaucracy and without high immigration fees. It also allows employers to fill skills gaps which would otherwise stifle the growth of small and micro businesses. Our Small Business Index for Q4 2023 found that 21% of small businesses perceive appropriately skilled staff as one of the greatest barriers to their growth aspirations.
“The flexibility of the graduate visa also allows small firms to evaluate the performance of their graduate employees for two or three years before making a longer commitment to hire them permanently.
Tina McKenzie
Policy Chair at the Federation of Small Businesses
Notes to editors
- UUK’s analysis of the London Economics data is attached as a PDF to this email and is available here from 00.01 28 February.
- UUK and BUILA surveyed member institutions to build a clearer picture of the current international student recruitment landscape. The survey gathered information on forecasts and actuals for September 2023 and January 2024 enrolments. 73 universities submitted responses.
- Responses to UUK’s survey showed a 44% drop in enrolments in January 2024 following a 0.4% drop in September 2023. When put into context against university forecasts and expectations, the September 2023 figure was 9.8% lower than forecast (11.3% lower at postgraduate taught level) and the January 2024 figure was 35.9% lower (41.3% at postgraduate taught level).
- Despite recent UCAS data showing an increase in international students, this applied to undergraduate (UG) level whereas the majority of international students are at postgraduate taught (PGT) level. UK students still make up the vast majority at UG level. A full breakdown of the latest available data is available via HESA.
- The Department for Education (DfE) and the Department for International Trade (DIT) launched the International Education Strategy in 2019. The strategy sets out the government’s ambition to increase the value of education exports to £35 billion per year by 2030 and increase the total number of international students choosing to study in the UK higher education system each year to 600,000 by 2030.
- As part of this strategy, the government stated it wanted to “continue to provide a welcoming environment for international students and develop an increasingly competitive offer. This includes extending the post-study leave period.” Following this, the government introduced the Graduate visa which was deliberately designed with no skill or salary requirements in order to provide “an opportunity for international students who have been awarded their degree to stay in the UK and work, or look for work, at any skill level for two years, or three years for doctoral students.”
- Last year, London Economics data show that one intake of international students in 2021/22 made each of the 650 parliamentary constituencies on average £58 million better off because of international students, equivalent to approximately £560 per citizen.
- The latest figures show there were 679,000 international students in the UK in 2021-22. The data for 2022-23 will be published in the months ahead and is likely to show an increase on the prior year – but is still data with a long lag. Emerging evidence, such as the UUK survey mentioned above, makes sector experts increasingly confident that the new data will represent the high water mark of international recruitment.
- UUK has published a mythbuster looking at some of the common perceptions on international student recruitment.
- The Enroly platform streamlines the international admissions and compliance process for Enroly’s university partners, their students and agents. A third of international students arriving in the UK use the platform.
- The Enroly data cited compares the January 2024 intake with the January 2023 intake and is taken from a representative sample of 68,000+ international student offers. Figures given are based on CAS issuance and deposits paid by students.