Inquiry into universities’ funding reliance on international students

The Education Committee has launched a new inquiry into some universities’ reliance on revenue from international student tuition fees and whether this is sustainable.
 
The proportion of higher education providers with an annual overspend increased year-on-year from 5 per cent in 2015, to 32 per cent in 2020.

As a result, universities are increasingly looking to international students to cover budget shortfalls, as they pay significantly higher fees than domestic students.
 
In 2021 to 22, there were almost 680,000 overseas students at UK universities (including undergraduate and postgraduate students), representing around a quarter of the total student population.

This is up from 469,000 four years earlier.

The 2022 figure was a record high, with the UK ranked as the third most popular destination for international students. There have also been media reports that some Russell Group universities now get a minority of tuition fee revenue from domestic students.

Following recent changes to visa rules for international students, there is now greater concern that the sector has become over-reliant on overseas students.

Changes introduced in January 2024 included restrictions on non-research students’ entitlement to bring dependants to the UK, and removing the possibility of switching to a work visa before completing studies.
 
The Migration Advisory Committee is also currently reviewing the system of graduate visas and is due to report in May. Universities UK has warned that a significant number of international applicants now feel discouraged from studying in the UK.
 
The inquiry will also examine the effectiveness of the government’s 2019 International Education Strategy, trends in the types of courses that attract more or fewer international students, and whether a high proportion of international students might impact availability of places for domestic students.
 
Education Committee Chair Robin Walker MP said: “That the UK is the third most popular destination for international students is a source of pride and a credit to the strength of our world class universities. The contribution that those students bring is also hugely valued in our cities, industries and institutions. It boosts exports and strengthens UK soft power when students who have studied here return to their home countries with a positive experience of study in the UK.
 
“However, England’s universities, including some of its elite institutions, are facing significant challenges, with a growing number finding themselves increasingly dependent on income from international students to balance the books. This inquiry will explore concerns that some universities have become too reliant on students from abroad to shore up their balance sheets, and to what extent this is sustainable.  
 
“My cross-party Committee will investigate what these challenges are likely to mean for the future of higher education in England. We will explore how the sector, and the government, intend to address the potential financial risks associated with an increased reliance on international students, as well as looking at the overall contributions international students make in our universities.”