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Student visa crackdown will hit university income

Responding to the proposed reform of the student visa system by the Home Office, ippr is warning of serious impacts on university and college income.

Sarah Mulley, ippr Associate Director for Migration, Trade and Development, said:

'Cuts in the number of foreign students will only have a limited impact on net migration levels over the long-term because so few stay permanently. To have a serious impact, the reduction of foreign students will need to be massive and will hit university and college income at a time of funding cuts.

'Foreign students contribute a huge amount to the UK education sector and to the wider economy. It is right to clamp down on abuse of the visa system but these proposals are driven primarily by the government's objective of reducing net migration by more than half. In its efforts to meet this objective, the government risks causing significant harm to a highly successful export sector at a time when the economy is still vulnerable.

'Half of foreign degree students actually start their studies in the UK on a sub-degree level course. English language courses at UK colleges sell Britain and British business to the rest of the world.'

Notes to editors

Yesterday’s Home Office announcement is available at: Government sets out proposals for major reform of the student visa system

International students are the group of migrants least likely to settle here. The Home Office’s own report The Migrant Journey (published 6 September) shows that in 2004, of the 186,500 students granted visas, only 5,568 later gained settlement rights. This is just 3 per cent. The vast majority of entrants gaining settlement rights (84 per cent) came to the UK on family and work visas.

  • £2.5 billion is estimated to be earned by universities from foreign students’ fees alone.
  • For the majority of universities these fees represent between 10 and 30 per cent of total income.
  • Another £2.5 billion is spent by international students on goods and services in local communities, giving a total of some £5 billion.
  • When income to private sector colleges is added, the total value of international students to the UK economy was £8.5 billion.

This is an expanding market – last year, income from international students' fees was worth more than £2.2 billion to British universities – a total of 9 per cent of the sector's income. Institutions like the London School of Economics, University College London and the University of Manchester, who all take high numbers of international students, are likely to be worst affected by any changes.

The 66,500 international students on technical courses in FE colleges in England contribute £42 million to college budgets from fees alone. 

Of the 281,000 non-EU students approved to study at educational establishments licensed by the UK Border Agency in 2009, the Home Office has estimated that 150,000 were at degree level and above, mostly at universities, while 131,000 were at sub-degree level, mostly at privately funded institutions. Around half of foreign degree students start their studies in the UK on a sub-degree level course.

Home Office research found that a fifth of students who came to the UK in 2004 were still in the UK in 2009. UK Border Agency data suggest that these were split between those who remained as students, and those granted leave to remain for work and family reasons (through marriage, for example). Only a small number of those entering in 2004 as students applied for settlement. In 2009, only just over 4000 visas (plus just under 2500 dependents’ visas) were issued through the Tier 1 Post-Study Work Route, which allows foreign students to stay in the UK in order to seek work.


Tim Finch, ippr Director of Communications: 0207 7470 6110 / 07595 920 899 /

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