How Foreign Students Influences UK Economy?

Two recent analyses emphasize the significance of international students to the UK economy and what would be at stake in terms of the UK’s capacity to maintain market share in comparison to other prominent study abroad destinations. The first is a London Economics statement issued by the Higher Education Policy Institute and Universities UK International, whereas the other is a UUKi and IDP Connect report.

Many of you must be looking for the best universities in the world to further your education. Finding overseas study programs can be a time-consuming process. You take into account several things including what college education to seek and which college to join. It’s a lengthy list of ideas while what you do not know is that the United Kingdom has set a goal of welcoming 600,000 international students by 2030, boosted international enrolments in 2019/20, and remains the second most popular student destination behind the United States. At the very same moment, UK educators are facing increasing competition as other countries compete for students based on pricing, post-study employment rights, and pledges of security and accessibility to international students.

Even though a mere batch of foreign students will spend £3.2 billion on the UK economy over the next ten years through taxable income and National Insurance contributions, the government is proposing tighter limitations on post-study work visas (Sabrina Collier, 2021).

In 2018/19, the UK economy received £25.9 billion.

According to the London Economics report, a 2018/19 cohort of overseas students studying in the UK provided a benefit to the economy of £25.9 billion (US$35.9 billion) to the UK economy, up 19% from the last analysis in 2015/16. The cohort consisted of 272,920 first-year overseas students who began their studies at UK institutions in 2018/19, and the study looked at the cohort’s total economic impact on the UK economy throughout their studies.

The analysis needed to consider the following factors when calculating the net economic benefit:

• Tuition fees for students and the economy’s indirect benefit from these fees (through university spending on employees, commodities, and services);
• Non-tuition spending by students (e.g., living expenses) and how this spending impacted sectors of the economy;
• The cash generated by students’ families and friends attending them while they’re in the UK, which flowed via a variety of industries.

“Every 14 EU students, as well as every 10 non-EU students generate 1 million dollars ’ worth of net effect on the economy for the UK economy throughout their study,” according to the analysis’ conclusions.

Students from outside the EU spent more than students from within the EU.

Three-quarters (76%) of the over 273,000 international first-year people who attended secondary education in the UK in 2018/19 were from outside the EU, a considerable rise of 20% over 2015/16. (See this recent piece for further information on the strategic impact of nonstudents in the UK.) The remaining 24% came from the European Union.

A group of non-EU students provided a net gain to the economy of £109,000, compared to £94,000 for just an EU student. The disparity is mostly due to non-EU students paying more tuition in 2018/19 than EU students – a disparity that will decrease once EU students pay the same tuition prices as non-EU students as a result of Brexit negotiations.

When all new foreign students, both EU and non-EU, began studies in 2018/19, they contributed £25.9 billion, up from £21.7 billion in 2015/16, owing to a 17 percent rise in international students (mostly non-EU students) in 2018/19 relative to 2015/16.

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What is the UK’s current competitiveness?

Universities UK commissioned a London Economics analysis, which highlights the value of international students to the British economy, whereas a completely separate report released this fall by UUKi and IDP Connect shows that the UK’s competitive position is at risk due to increased competition for students from other popular cities.

The UUKi/IDP Connect research compared the UK to Australia, Canada, China, France, Germany, Japan, Malaysia, New Zealand, and the United States, as well as the techniques used by these countries to attract students. The report’s purpose is to help higher education institutions, the broader sector, and the UK government in their efforts to meet a goal of 600,000 foreign students by 2030. Foreign enrollment rates in the UK increased to 556,625 for the 2019/20 academic year.

Quantitative data analysis of HESA and UNESCO statistics, secondary research, and qualitative interviews with prospective students, graduates, and agencies from South Korea, India, Indonesia, Brazil, Nigeria, Pakistan, Saudi Arabia, and Vietnam influenced the report.

Education must be of high quality.

While the UK remains an appealing choice for overseas students, especially considering its image for educational quality, the research revealed that the country has certain limitations in terms of its capacity to attract students when compared to other countries. These are some of them:

• International students may find the United Kingdom to be prohibitively pricey.
• Students are not given adequate information about regional possibilities in the United Kingdom;
• The Study UK campaign lacks a scholarship search tool;
• Work prospects after graduation are a little more limited.
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Restrictions on post-study employment visas and their impact

The analysis also revealed that the government’s move in 2012 to abolish post-study employment permits (which formerly enabled international graduates to stay in the UK for up to 2 years) had cost the economy £150 million each year. International (non-EU) graduates who want to remain and work in the UK after graduation have only four months to register for a Tier 2 General Work Visa by finding a job that typically pays £20,800 per year or by seeking sponsorship as an entrepreneur.

And, while the amount of students in the UK continues to rise year after year, this is not nearly as fast-growing as the number of international students who choose to study in other English-speaking countries such as Canada or Australia, both of which are thought to offer more friendly and open post-study work visa options.