UK’s international fee levy could slash enrolments by over 77k

Some 16,100 international students could be deterred from studying in the UK in the first year universities are levied 6% of all their international student fees, comes the stark warning from a new report from the think tank Public First.

Should the government make good on the proposal – outlined in the immigration white paper earlier this year – this figure could rocket to more than 77,000 students in the first five years of its implementation, the report predicts.

The government expects universities to pass the increased costs onto international students themselves by raising fees. But Public First cautioned that such a move would have catastrophic consequences by driving international students away, hitting the UK’s economy by £2.2 billion over five years and leading to a reduction of 135,000 university places for domestic students.

The think tank projected that a 6.38% international student fee increase – necessary for universities to pass on the entire cost of the levy – would have a far greater impact on students’ decision to study in the UK than the government has anticipated.

This is because the government’s forecasts were based on data for EU students. However, Public First noted that price elasticity of demand for non-EU students is greater than their EU counterparts – meaning they would be more likely to be look elsewhere if they found UK fees too expensive.

Jonathan Simons, partner at Public First and author of the report, noted that the projected impact of the levy “is much more severe than had been predicted previously”.

It is not widely understood just how much our economy is supported by international students and it’s really crucial that any policy that could affect international student numbers is considered through this lens

Jonathan Simons, Public First

“This, of course, will hit our universities, around 40% of whom are already in deficit, and that could lead to a further loss of jobs, a loss of university places for UK students and a loss of vital research investment,” he added.

“Perhaps even more significant, though, is the hit an international student levy could cause to local, regional and national economies across the UK. It is not widely understood just how much our economy is supported by international students and it’s really crucial that any policy that could affect international student numbers is considered through this lens.”

Henri Murison, chief executive of the Northern Powerhouse Partnership and chair of the Growing Together Alliance, said that the levy was opposed by all of England’s major regional employer organisations “because the resulting decline in international students would be hugely damaging to all the regions of the country”.

“The Chancellor should take note of the economic damage of this policy which undermines a critical UK export and we have requested an urgent meeting to raise our concerns,” he said.

The proposed levy has been widely criticised by higher education institutions.

Last month, a HEPI analysis predicted that UK universities could take a £621m hit if the policy goes ahead, with those situated in big metropolitan cities set to be the worst affected.