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The HEPI blog was kindly authored by James Pitman, Chair of IHE and Managing Director U.K. and Ireland, Study Group
The Graduate Route has been extraordinarily powerful in driving international education value in the UK. Although all the surveys show students choose universities and courses for their reputation or fit, the opportunity to translate this into a first job in another country to strengthen English language skills as they earn is evidenced by what happens as soon as that is taken away.
The correlation between removing the Post Study Work Visa scheme on the back of statistically invalid analysis and the drop in international students choosing the UK in 2012 is irrefutable. This is strengthened by the significant international student growth linked to the re-introduction of the Graduate Route in 2021.
Why is the graduate route visa such a powerful incentive for some international students to come and study in the UK? The simplest explanation came from an agent in India, who explained:
‘An Indian student can recoup much of their investment in a UK degree over a few years of employment in the UK when it would take several decades to do the same back in India.’
International students contribute a net £100,000 to the UK economy during their degree study. A degree is required to enter the Graduate Route. Therefore, one could consider the ‘entry ticket’ for a Graduate Route visa to be a £100,000 investment in the UK – which may be worth up to £30,000 to the exchequer. From a Treasury growth perspective, international students drive employment and economic benefit in every constituency of the UK, especially in university towns and cities. I doubt the mandarins at the Treasury could think of a more cost-effective measure that seeds prosperity right across the country while building connections and loyalty that last a lifetime amongst the very group who will, in years to come, shape societies and build companies.
Oxford Economics concluded that every 10 international students supports 6 jobs, with half in Higher Education and half in the local economy. If this remains accurate, the reported loss of approximately 10,000 jobs in Higher Education last year, mainly attributed to the decline in international students, should correspond to a similar loss in local economies across the country.
And yet this is economic harm proactively driven by policy choices which raised uncertainty regarding the future of the Graduate Route. If you were thinking of making a £100,000 investment, uncertainty would not exactly be conducive to choosing to invest in the UK. As one local businessman in Sheffield put it, “If you walk past a shop window swinging a baseball bat for a couple of weeks, it doesn’t matter if you never hit it, the people inside will still get worried.” Even just the threat of future policy changes creates “a massive amount of uncertainty, and uncertainty for students is a big problem.”
Subsidising the domestic tax payer
Students on the Graduate Route, like all international students, pay the Immigration Health Surcharge (currently £776 p.a. for students and £1035 p.a. for graduates on the Graduate Route). The actual costs according to the Department of Health and Social Care in 2018 were £480 p.a. including dependants. Given the restrictions on dependants, a shift in the mix (until recent restrictions) to shorter PG courses, the prevalence of private insurance that many students have and the reality of waiting times for treatment, this is a subsidy to the NHS.
Another subsidy is less well known, but any student on the Graduate Route employed at any salary level, high or low, is actually subsiding the UK tax payer. In comparison with a domestic employee at the exact same level of remuneration, international students pay the same income tax and National Insurance, but critically, they can only access less than half of the services that those taxes pay for. International students on the Graduate Route are barred from benefiting from services provided in the areas of Education, Social Protection, and Housing, and they already subsidise the NHS, as shown above. Those four areas account for c.65% of public sector expenditure on services (PESA 2023/4). Another way of putting this is that international students employed on the Graduate Route are effectively paying income tax at double the rate of a domestic equivalent worker.
The dependants dilemma — a third way
However, the Migration Advisory Committee has argued that there is a subsidy element for international students. This seems to be based on the fact that international students could, until last year, bring unlimited numbers of dependants and that any child dependants had access to free education at the UK taxpayer’s cost. This option was then removed with a devastating knock-on impact for university finances.
However, it is instructive to note that the options considered around this issue were binary — either close the dependants route (the approach taken for any students other than for those on research-intensive PG courses) or leave the system as was. What was not considered was adapting the dependants’ visa by removing access to free childhood education but leaving the route, which would have caused far less damage to international student recruitment in 2024. Instead, removing the dependant’s route caused significant damage that disadvantaged female students and students from cultures where chaperones are required. I know the options considered, because the Home Office responded to an FOI on this matter. Let us also remember that dependants have always been (as the name implies) dependant on the international student that they accompany, not the UK tax payer.
Cost-benefit analysis
In reality, in economic terms, international graduates are more akin to tourists, having no recourse to public funds (apart from the historical significant exception of child dependants) and bringing resources into the UK to sustain themselves. However, unlike tourists, they do have to pay the Immigration Health Surcharge.
To give an indicator of the cost to the UK of restricting international students coming to study in the UK over that period, I compared the government-published data on value and growth rates of international education from 2010 to 2024 to the equivalent global international student mobility value growth rates published by Holon IQ (part of the QS Quacquarelli Symonds, group). It is only an indicator, but against the UK having been permitted by government to grow at the same growth rate as the global market (which I doubt many in the sector would have bet against), cumulative loss to GDP over that period was £66 billion, implying a cumulative loss of income to the exchequer of £23 Billion. How many hospitals, schools and roads would be in better shape today if that scale of investment had been funded by international education? What a wasted opportunity, and for what purpose?
Now, the Prime Minister tells us his priorities are security and growth. On both, international students can be a key part of a progressive policy shift. And yet it is sad to say that our new government, whilst saying the right things, has not yet done anything to undo the damage of the past. If reports are to be believed, they are even being tempted to impose even more restrictions on international students in the Immigration White Paper to be published this month, preceding the new iteration of the International Education Strategy in April.
Once again, it appears that those who are tasked with reducing immigration are acting in direct opposition to the avowed growth agenda of the Treasury, the Department of Business and Trade, the Department for Education and others and, quite frankly, considering the above, against the demonstrable interests of the UK.
Rethinking terms
I have a clear understanding of the root cause of this ambivalence towards international students, and I direct any interested readers to the HEPI blog ‘When is an Immigrant not an Immigrant’. Allpolling of the general public (most recently by Public Future) shows that they recognise international students are not immigrants, and a strong majority cannot comprehend why they are categorised in the same way. If our government is serious about growth, I urge them to separate international students from immigration immediately.
Finally, again, to demonstrate the value of international students, we should consider the increasingly dangerous situation we find ourselves in and the government’s commitment to ramp up defence spending. That incremental 0.2% GDP or £6 billion spend, announced recently, could have avoided the contentious cut in the overseas budget.
Why didn’t the Treasury consider international education instead? With no investment needed beyond the political will to enhance the UK’s international education offering, we could provide high-quality education to an additional 175,000 international students (that’s merely, on average, 1,250 per university). At current rates, this would generate around £6 billion for the exchequer from each cohort while also supporting the creation of approximately 50,000 jobs in higher education and another 50,000 jobs for hard-pressed families in local communities across the UK. Furthermore, it would significantly enhance the UK’s soft power in the long term.
Many in the international education sector believe that our ability to welcome students is, in financial terms, as near as our country can get to a golden goose, although not one that will live forever. The Graduate Route is a key golden lever in its nest. International students bring huge investments in order to access the benefits of the Graduate Route, subsidise the UK taxpayer while they are on it and can only remain in the UK after that with another category of visa.
Since OpenAI first released ChatGPT in November 2022, early adopters have been informing the public that artificial intelligence will shake up the world of work, with everything from recruitment to retirement left unrecognizable. Ever more cautious than the private sector, higher ed has been slow to respond to AI technologies. Such caution has opened a divide within the academy, with the debate often positioned as AI optimism versus pessimism—a narrow aperture that leaves little room for realistic discussion about how AI is shaping student experience.
In relation to graduate outcomes (simply put, where students end up after completing their degrees, with a general focus on careers and employability), universities are about to grapple with the initial wave of graduates seriously impacted by AI. The Class of 2025 will be the first to have widespread access to large language models (LLMs) for the majority of their student lives. If, as we have been repeatedly told, we believe that AI will be the “great leveler” for students by transforming their access to learning, then it follows that graduate outcomes will be significantly impacted. Most importantly, we should expect to see more students entering careers that meaningfully engage with their studies.
The reality on the ground presents a stark difference. Many professionals working in career advice and guidance are struggling with the opposite effect: Rather than acting as the great leveler, AI tools are only deepening existing divides.
Much has been said about educators’ ability to trust student work in a post-LLM landscape. Yet, when it comes to student outcomes, a more pressing concern is students’ trust in AI tools. As international studies show, a broad range of sectors is already placing too much faith in AI, failing to put proper checks and balances in place. If businesses beholden to regulatory bodies and investors are left vulnerable, then time-poor students seeking out quick-fix solutions are faring worse.
This is reflected in what we are seeing on the ground. We were both schoolteachers when ChatGPT launched and both now work in student employability. As is common, the issues we first witnessed in the school system are now being borne out in higher ed: Students often implicitly trust that AI will perform tasks better than they are able to. This means graduates are using AI to write CVs, cover letters and other digital documentation without first understanding why such documentation is needed. Although we are seeing a generally higher (albeit more generic) caliber of writing, when students are pressed to expand upon their answers, they struggle to do so. Overreliance on AI tools is deskilling students by preventing them from understanding the purpose of their writing, thereby creating a split between what a candidate looks like on paper and how they present in real life. Students can only mask a lack of skills for so long.
The generation of students now arriving at university were in their early teens when the pandemic hit. This long-term disruption to schooling had a profound impact on social and emotional skills, and, crucially, learning loss also impacted students from disadvantaged backgrounds at a much higher rate. With these students now moving into college, many are turning to AI to try and ameliorate feelings of being underprepared.
Such a skills gap is tangible when working with students. Those who already present high levels of critical thinking and independence can use AI tools in an agile manner, writing more effective prompts before tailoring and enhancing answers. Conversely, those who struggle with literacy are often unable to properly evaluate how appropriate the answers provided by AI are.
What we are seeing is high-performing students using AI to generate more effective results, outpacing their peers and further entrenching the divide. Without intervention, the schoolchildren who couldn’t answer comprehensions questions such as “What does this word mean?” about their own AI-generated homework are set to become the graduates left marooned at interview where they can no longer hide behind writing. The pandemic has already drawn economic battle lines for students in terms of learning loss, attainment and the very awarding of student grades—if we are not vigilant, inequitable AI use is set to become a further barrier to entry for those from disadvantaged backgrounds.
Current graduates are entering a tough job market. Reports have shown both that graduate-level job postings are down and that employers are fatigued by high volumes of AI-written job applications. At the same time, employers are increasingly turning to AI to transform hiring processes. Students are keenly attuned to this, with many reporting low morale that their “dream role” is now one that AI will fulfill or one that they can see becoming replaced by AI in the near future.
Across many institutions, higher education career advice and guidance is poorly equipped to deal with such changes, still often rooted in an outdated model that is focused on traditional job markets and the presumption that students will follow a “one degree, one career” trajectory, when the reality is most students do not follow linear career progression. Without swift and effective changes that respond to how AI is disrupting students’ career journeys, we are unable to make targeted interventions that reflect the job market and therefore make a meaningful impact.
Nonetheless, such changes are where higher education career advice and guidance services can make the greatest impact. If we hope to continue leveling the playing field for students who face barriers to entry, we must tackle AI head-on by teaching students to use tools responsibly and critically, not in a general sense, but specifically to improve their career readiness.
Equally, career plans could be forward-thinking and linked to the careers created by AI, using market data to focus on which industries will grow. By evaluating student need on our campuses and responding to the movements of the current job market, we can create tailored training that allows students to successfully transition from higher education into a graduate-level career.
If we fail to achieve this and blindly accept platitudes around AI improving equity, we risk deepening structural imbalances among students that uphold long-standing issues in graduate outcomes.
![How to Unlock Graduate Enrollment Growth [Webinar]](https://blog.college-counseling.com/wp-content/uploads/2025/04/How-to-Unlock-Graduate-Enrollment-Growth-Webinar.webp.webp)
Your graduate programs should be thriving, but if you’re relying on outdated outreach tactics, you’re leaving enrollments on the table. Today’s grad students expect more personalization, relevance, and connection. And if you’re not aligning with their needs, another institution will. The only way to meet them where they are is by asking the right questions and getting real answers. That’s exactly what Collegis Education and UPCEA did, and now we’re pulling back the curtain to share what we found.
Tracy Chapman
Chief Academic Officer
Collegis Education
Bruce Etter
Senior Director Research & Consulting
UPCEA
Join Tracy Chapman, Chief Academic Officer at Collegis Education, and Bruce Etter, Senior Director of Research & Consulting at UPCEA, for their upcoming webinar “Unlock Graduate Enrollment Growth: Proven Strategies for Engaging Graduate Students.” In this session, they’ll reveal some surprising discoveries about graduate enrollment and the factors that drive impact and growth.
At the end, we’ll leave room for questions and conversion, and all attendees will receive a copy of the entire research report.
See you on April 8!
Your graduate programs should be thriving, but if you’re relying on outdated outreach tactics, you’re leaving enrollments on the table. Today’s grad students expect more personalization, relevance, and connection. And if you’re not aligning with their needs, another institution will. The only way to meet them where they are is by asking the right questions and getting real answers. That’s exactly what Collegis Education and UPCEA did, and now we’re pulling back the curtain to share what we found.
Unlock Graduate Enrollment Growt
Proven Strategies for Engaging Graduate Students
Date: April 8, 2025
Time: 2:00 pm (Eastern) / 1:00 pm (Central)
Join Tracy Chapman, Chief Academic Officer at Collegis Education, and Bruce Etter, Senior Director of Research & Consulting at UPCEA, for their upcoming webinar “Unlock Graduate Enrollment Growth: Proven Strategies for Engaging Graduate Students.” In this session, they’ll reveal some surprising discoveries about graduate enrollment and the factors that drive impact and growth.
Walk away with a clear understanding of:
Who should attend:
At the end, we’ll leave room for questions and conversion, and all attendees will receive a copy of the entire research report. See you on April 8!
“Our universities have a paramount place in an economy driven by knowledge and ideas.”
These are the opening words of the 2016 white paper Success as a Knowledge Economy, which created the funding and regulatory architecture governing English higher education today. The arrangements are founded on a broad faith in the economic benefits of generating and communicating knowledge.
This vision assumes that an increasing supply of university graduates and research, coupled with open markets that reward enterprise, leads to endogenous economic growth. That can happen anywhere because ideas are boundless and non-rivalrous, but particularly in England because our universities are among the best in the knowledge business.
English higher education has grown by integrating the development of specific skills for the workplace alongside universally applicable knowledge. This is clear from the progress of most English universities from institutes established for professional and technical training towards university status, the absorption of training for an increasing range of professions within higher education, and the way in which universities can now articulate the workplace capabilities of all graduates, regardless of their discipline.
Notwithstanding this, the reforms proposed in 2016 emphasised knowledge more than skills. By that time, most of the cost of teaching in English universities had been transferred to student tuition fees backed by income-contingent loans. So, the reforms mostly focused on providing confidence for the investments made by students and the risks carried by the exchequer. This would be delivered through regulation focused on issues important to students and the government, whilst positioning students as the pivotal influence on provision through competition for their choices.
Universities would compete to increase and improve the supply of graduates. This would then enhance the capacity of businesses and public services to capitalise on innovation and new technologies, which would yield improved productivity and jobs requiring graduates. That is a crude characterisation, but it provides a starting point for understanding the new imperatives for higher education policy, which are influenced by challenges to this vision of nearly a decade ago.
Despite an expansion of university graduates, the UK has had slow productivity growth since the recession of 2008–09. Rather than the economy growing alongside and absorbing a more highly educated workforce, there are declining returns for some courses compared with other options and concerns that AI technologies will replace roles previously reliant on graduates. Employers report sustained gaps and mismatches between the attributes they need and those embodied in the domestic workforce. Alongside this, ministers appear to be more concerned about people that do not go to university, who are shaping politics in the USA and Europe as well as the UK.
These are common challenges for countries experiencing increasing higher education participation. The shift from elite to mass higher education is often associated with a “breakdown of consensus” and “permanent state of tension” because established assumptions are challenged by the scale and range of people encountering universities. This is particularly the case when governments place reliance on market forces, which leads to misalignment between the private choices made by individuals and the public expectations for which ministers are held to account. Universities are expected to embody historically elite modes of higher education reflected in media narratives and rankings, whilst also catering for the more diverse circumstances and practical skills needed by a broader population.
In England, the government has told universities that it wants them to improve access, quality and efficiency, whilst also becoming more closely aligned with the needs of the economy and civil society in their local areas. These priorities may be associated with tensions that have arisen due to the drivers of university behaviour in a mass market.
In a system driven by demand from young people, there has been improved but unequal access reflecting attainment gaps in schools. This might not be such a problem if increasing participation had been accompanied by a growing economy that improves opportunities for everyone. But governments have relied on market signals, rather than sustained industrial strategies, to align an increasing supply of graduates with the capabilities necessary to capitalise on them in the workplace. This has yielded anaemic growth since the 2007 banking crash, together with suggestions that higher education expansion diminishes the prospects of people and places without universities.
In a competitive environment, universities may be perceived to focus on recruiting students, rather than providing them with adequate support, and to invest in non-academic services, rather than the quality of teaching. These conditions may also encourage universities to seek global measures of esteem recognised by league tables, rather than serving local people and communities through the civic mission for which most were established.
Market forces were expected to increase the diversity of provision as universities compete to serve the needs of an expanding student population. But higher education does not work like other markets, even when the price is not controlled as for undergraduates in England. Competition yields convergence around established courses and modes of learning that are understood by potential students, rather than those that may be more efficient or strategically important for the nation as a whole.
After more than a decade of reforms encouraging competition and choice, there appears to be less faith in well-regulated market forces positioning knowledgeable graduates to drive growth. Universities are now expected to become embedded within local and national growth plans and industrial strategy sectors, which prioritise skills that can be deployed in specific settings ahead of broadly applicable knowledge. This asks universities to consider the particular needs of industry, public services and communities in their local areas, rather than demand from students alone.
Despite these different imperatives, English higher education will continue to be financed mostly by students’ tuition fees and governed by regulatory powers designed to provide confidence for their choices. We suggest four ingredients for navigating this, which are concerned with strategy, architecture, regulation and funding.
The government has promised a single strategy for post-16 education and a new body, Skills England, to oversee it. A more unified approach across the different parts of post-compulsory education should encourage pathways between different types of learning, and a more coherent offer for both learners and employers. But it also needs to align factors that influence the demand for graduates, such as research and innovation, with decisions that influence their supply. That requires a new mindset for education policy, which has tended to prioritise national rules ahead of local responsiveness, or indeed coherence with other sectors and parts of government.
Delivery of a unified strategy is hampered by the fragmented and complex architecture governing post-16 education. Skills England will provide underpinning evidence, both influencing and drawing on Local Skills Improvement Plans (LSIPs), but it remains uncertain how this will be translated into measures that influence provision, particularly in universities. A unified strategy demands structures for convening universities, colleges, employers and local authorities to deliver it in local areas across the country.
That could be addressed by extending the remit of LSIPs beyond a shopping list of skills requirements and enhancing the role of universities within them. Universities have the expertise to diagnose needs and broker responses, aligning innovation that shapes products and services with the skills needed to work with them. They will, though, only engage this full capability if local structures are accompanied by national regulatory and funding incentives, so there is a unified local body responsible for skills and innovation within a national framework.
Regulation remains essential for providing confidence to students and taxpayers, but there could be a re-balancing of regulatory duties, so they have regard to place and promote coherence, rather than competition for individual students alone. This could influence regulatory decisions affecting neighbouring universities and colleges, as well as the ways in which university performance is measured in relation to issues such as quality and access. A clear typology of civic impact, together with indicators for measuring it, could shift the incentives for universities, particularly if there is a joined-up approach across the funding and regulation of teaching, research and knowledge exchange.
Regulation creates the conditions for activity, but funding shapes it. Higher education tends to be a lower priority than schools within the Department for Education, and research will now be balanced alongside digital technologies within the Department for Science, Innovation and Technology. A new Lifelong Learning Entitlement and reformed Growth and Skills Levy may provide new opportunities for some universities, but any headroom for higher education spending is likely to be tied to specific goals. This will include place and industry-oriented research and innovation programmes and single-pot allocations for some MSAs, alongside the substantial public and private income universities will continue to generate in sectors such as health and defence. In this context, aligning universities with the post-16 education strategy relies on pooling different sources of finance around common goals.
Closer alignment of this kind should not undermine the importance of knowledge or indeed create divisions with skills that are inconsistent with the character and development of English higher education to date. The shift in emphasis from knowledge towards skills reframes how the contributions of universities are articulated and valued in policy and public debate, but it need not fundamentally change their responsibility for knowledge creation and intellectual development.
This appears to have been recognised by ministers, given the statements they have made about the positioning of foundational knowledge within strategies for schools, research and the economy. We have, though, entered a new era, which requires greater consideration of the demand for and take-up of graduates and ideas locally and nationally, and a different approach from universities in response to this.
As a higher education leader, it’s no secret that you’re facing a fiercely competitive graduate enrollment landscape. You know as well as I do that understanding what prospective students want and how they behave isn’t just helpful – it’s crucial to your institution’s success. That’s why we teamed up with UPCEA to conduct a deep dive into today’s post-baccalaureate students, uncovering their unique needs, expectations, and wants.
We’ve published those insights in our latest report to help colleges and universities fine-tune their graduate enrollment strategies and deliver real results. You can download the complete report here: “Building a Better Pipeline: Enrollment Funnel Needs and Perspectives from Potential Post-Baccalaureate Students“
Our research focused on individuals who expressed at least some interest in pursuing advanced education, and this study sheds light on what matters most to potential graduate students—everything from program types and communication preferences to application expectations.
As we dug into the data, some obvious themes emerged. Here are five key findings that can prepare your institution to stand out in this tight market and guide you in shaping strategies that resonate, engage, and deliver results.
This is no surprise to those working in higher ed in recent years. Graduate enrollment is slowing, with just a 1.1% projected increase over the next five years. Adding to the challenge, 20% of institutions dominate 77% of the market. For everyone else, it’s a fierce battle for a shrinking pool of candidates. To win, you’ll need a sharp, focused approach.
Did you know that 71% of prospective students are “extremely” or “very” interested in fully online programs? Hybrid formats come in a close second, while traditional in-person options are struggling to keep pace. The data confirms that flexibility isn’t a trend—it’s a necessity.
Here’s something we see far too often: quality programs losing prospective students simply because critical details—like tuition costs and course requirements—are buried or missing entirely from the school’s website. In fact, 62% of students indicated they would drop off early in their search for this exact reason.
The fix? It’s simpler than you might think. By optimizing your program pages and doubling down on SEO, you can turn passive visitors into engaged prospects.
Sticker shock is real. High application fees, vague cost information, and limited financial aid details are among the top reasons students abandon the application process late in the game. By addressing these concerns clearly and directly, you’re not just solving a problem, you’re building trust.
When it comes to connecting with prospective graduate students, email reigns supreme. Whether it’s inquiring about programs (47%), application follow-ups (67%), or receiving application decisions (69%), email is the channel students trust the most.
But here’s the catch: your emails have to be timely, personalized, and relevant in order to make an impact.
The insights highlighted above are just the tip of the iceberg. Imagine what’s possible when you apply them to your graduate enrollment strategy.
If you’re ready to refine your approach and stay ahead of the curve, we’ve got you covered. Our report dives deeper into the data and uncovers actionable insights, including:
Grab your complimentary copy of the report today, and let’s start building a better pipeline together!
Your roadmap to winning in the competitive graduate market.
Get the latest data on graduate student enrollment trends. Download the full report now.
Speaking at an event in Glasgow this week, John Swinney blasted the UK’s “disastrous” decision to leave the European Union, but suggested a new migration route specifically for students who choose to study in Scotland.
“Twenty years ago, the Scottish and UK governments worked together to launch a tailored migration route designed to enable international students to stay in Scotland after they graduated,” he said. “I see no reason why this cannot happen again.”
Under the plans, designed to keep highly skilled graduates in the country, the Scottish Graduate Visa would be linked to a Scottish tax code and be issued on the understanding that recipients would live and work in Scotland.
But despite Swinney’s assurances that he was “ready to work with” Downing Street on making the proposal a reality, his idea already appears to have been rebuffed by the UK government.
A government spokesperson quoted by The Evening Standard indicated that there were “no plans” for a new Scottish visa, citing the UK’s Graduate Route already in place that allows international students to stay in the country for up to two years after they graduate.
In his speech, Swinney said a new Scottish Graduate Visa would benefit not only the country’s institutions but its economy after international students’ graduation, highlighting that this group contributes £4.75 billion a year.
“In small but important ways, it would make our economy more robust, and our public services more sustainable. It would play a part in making our communities more prosperous,” he said.
In small but important ways, it would make our economy more robust, and our public services more sustainable
John Swinney, Scottish first minister
Pointing out that Scotland’s projected population is expected to dip for the next two generations, Universities Scotland convener Paul Grice highlighted the benefits a Scottish Graduate Visa could bring the country and said he hoped the proposal would “progress in a meaningful way”.
“It would be enormously helpful if a policy space could be created between governments to consider greater regional variation of migration within an overall UK framework,” he said.
“Inward migration will be essential to Scotland’s future and there is a really positive opportunity for Scotland’s universities, as magnets for the attraction and retention of highly-skilled people, to help deliver this as a win-win for the sector and Scotland as a whole. There is a lot to like in this outline proposal.”
Although it does not appear to welcome the idea of a Scottish Graduate Visa for the time being, the UK government seems to be embracing international students.
This week, education secretary Bridget Phillipson recorded a video message to international students in the UK promoting the country’s post-graduation work opportunities.
Thanks to the CDBU and to HEPI for the invitation to attend and take part in today’s discussion.
My speech today has been titled ‘A graduate contribution model’. Of course, for UK graduates not from Scotland, I’m sure they would make the point that they very much do contribute through their fees, but the situation is very different in Scotland and I’m really grateful that I have the opportunity to feed the Scottish situation into today’s discussion.
I thought it may be helpful if I gave a quick overview of the Scottish situation, as it differs somewhat to the overview Nick gave this morning covering the rest of the UK.
Although tuition fees were introduced throughout the UK in 1998, the advent of devolution in 1999 and the passing of responsibility for higher education to Holyrood began the period of diverging funding policies.
The then Labour / Lib Dem Scottish Executive, as it was then known, scrapped tuition fees and replaced them with a graduate endowment from 2001-02, with the first students becoming liable to pay the fee from April 2005. The scheme called for students to pay back £2,000 once they started earning over £10,000.
The graduate endowment was then scrapped by the SNP in February 2008. A quirk of EU law meant that students from EU countries could not be charged tuition fees if Scottish students were not paying them but students from England, Wales and Northern Ireland could be charged. This meant that from 2008 to 2021/22 EU students did not need to pay fees to attend Scottish universities, though students from the rest of the UK did.
We’re used to politics in Scotland being highly polarised and often toxic with few areas of commonality, but for the most part the policy of ‘free’ higher education has been supported by all of the political parties. Indeed at the last Scottish election in 2021 all parties committed to maintaining the policy in their manifestos. It is only recently that the Scottish Tories have suggested a move away from this following the election of their new leader, Russell Finlay.
But behind this unusual political consensus, the ‘free’ policy is becoming increasingly unsustainable and unaffordable. Politicians will privately admit this, but politics, and a rock with an ill-advised slogan, have made it harder to have the much needed debate.
The Cap
While we don’t have tuition fees, we do have a cap on student numbers. And while more Scots are going to university, places are unable to keep up with demand. Since 2006 there has been a 56% increase in applicants, but an 84% increase in the number refused entry.
It is increasingly the case that students from the rest of the UK or overseas are accepted on to courses in Scotland while their Scottish counterparts are denied. For example, when clearing options are posted, often those places at Scotland’s top universities are only available to students from the rest of the UK and not to Scottish students, even if the latter have better grades. As a result, Scots can feel that they are denied access to education on their doorstep that those from elsewhere can obtain. Indeed, there are growing anecdotes about those who can afford it buying or renting property elsewhere in the UK so that they can attend a Scottish university, pay the higher fee and get around the cap.
Basically, more people want to go to university, but the fiscal arrangements are holding ambition them back. This problem was highlighted by the Scottish Affairs Select Committee’s report on Universities from 2021.
Some commentators in Scotland have blamed the lack of places on widening access programmes, but I would challenge this. It is undoubtedly a good thing that more people from non-traditional backgrounds are getting into university, it is the cap that is limiting Scottish places, not access programmes. This is a point that has been backed by individuals such as the Principal of St Andrews, Professor Dame Sally Mapstone [who also serves as HEPI’s Chair].
Financial Woes
The higher education sector in Scotland, as with elsewhere in the UK, is not in great financial health. Audit Scotland warned back in 2019 that half of our institutions were facing growing deficits. Pressures including pensions contributions, Brexit and estate maintenance have all played a role and in the face of this decline, but nothing has changed and we’re now seeing crisis like those at Dundee emerge. Against this backdrop, income from those students who pay higher fees is an important revenue stream.
There is obviously a huge variation in what the fees are to attend a Scottish university, considerably more so than in the rest of the UK.
For example, to study Accounting and Business as an undergraduate at Edinburgh University, the cost for a full-time new student for 2024/25 is £1,820 per year for a Scottish-domiciled student (met by the Scottish Government), £9,250 per year for someone from the rest of the UK and £26,500 for an international student.
It is clear why international students and UK students from outside Scotland are therefore so much more attractive than Scottish students.
However, there is by no means an equal distribution of higher fee paying students among our institutions.
For example, at St Andrews about one-third of undergraduate full-time students were Scots, with one-third from the rest of the UK and one-third international. The numbers for Edinburgh are similar.
At the other end of the scale, at the University of the Highlands and Islands and Glasgow Caledonian, around 90% of students are Scottish, with only around only 1% being international.
So it is clear that institutions’ ability to raise money from fee-paying students varies very dramatically, increasing the financial pressures on those with low fee income.
However, when looking at the issue, it is important to recognise that it is not just our universities who are struggling, Scotland’s colleges are facing huge financial pressures as well.
The current proposed Scottish budget would leave colleges struggling with a persistent, real-terms funding cut of 17 per cent since 2021/22. Our college sector is hugely important in terms of the delivery of skills, working with local economies and as a route to university for so many, but for too long colleges have been treated like the Cinderella service in Scotland. The prioritising of ‘free’ university tuition over the college sector is adding to this problem.
Regardless of who wins the Holyrood election next year, money is, and will remain, tight for some time. It would be lovely to be able to have lots of taxpayer funded ‘free’ services, but that is simply unsustainable and difficult choices need to be made.
This is why we believe that the current situation is unfair, unsustainable, unaffordable and needs to change.
Reform Scotland would offer another alternative solution. We believe that there needs to be a better balance between the individual graduate and Scottish taxpayers in the contribution towards higher education.
One way this could be achieved is through a fee after graduation, to be repaid once they earn more than the Scottish average salary. This would not be a fee incurred on starting university and deferred until after graduation, rather the fee would be incurred on graduation.
In terms of what that fee could be, the Cubie report over 25 years ago suggested a graduate fee of £3,000, which would be about £5,500 today. This could perhaps be the starting point for consideration.
Any figure should take account of different variations in terms of the true cost of the course and potential skill shortages.
However, introducing a graduate fee would not necessarily mean an end to ‘free’ tuition.
Rather it provides an opportunity to look at the skills gaps that exist in Scotland and the possibility of developing schemes which cut off or scrap repayments for graduates who work in specific geographic areas or sectors of Scotland for set periods of time.
Such schemes could also look to incorporate students from elsewhere for Scotland is facing a demographic crisis. Our population is set to become older and smaller, and we are the only part of the UK projected to have a smaller population by 2045.
We desperately need to retain and attract more working-age people. Perhaps such graduate repayment waiver schemes could also be offered to students from the rest of the UK who choose to study in Scotland – stay here and work after graduation and we will pay a proportion of your fee. A wide range of different schemes could be considered and linked into the wider policy issues facing Scotland.
According to the Higher Education Statistics Authority (HESA) there were 3,370 graduates from the rest of the UK who attended a Scottish institution in 2020/21. Of those, only 990 chose to remain in Scotland for work after graduation. Could we encourage more people to stay after studying?
Conclusion
A graduate fee is only one possible solution, but I would argue that it is also one with a short shelf life. As graduates would not incur the fee until they graduated, there would be a four-year delay between the change in policy and revenue beginning to be received. Our institutions are facing very real fiscal problems and there is a danger of a university going to the wall.
If we get to the 2026 election and political parties refuse to shift the dial and at least recognise that the current system is unsustainable, then there is a danger that nothing will change for another Parliamentary term. I don’t think we can afford to wait until 2031.
There is another interesting dynamic now as well. Labour in Scotland currently, publicly at least, oppose tuition fees. However, there are now 37 Scottish Labour MPs at Westminster who are backing the increase of fees on students from outside Scotland, or Scottish students studying down south. Given the unpopularity of the Labour government as well as the tight contest between the SNP and Labour for Holyrood, it seems unlikely that position can be maintained.
All across the UK there are increasing signs of the stark financial situation we are facing. Against that backdrop, along with the restrictions placed on the number being able to attend, free university tuition is unsustainable and unaffordable. People outside Scottish politics seem to be able to see this reality, privately so do many of our politicians. We need to shift this debate in to the public domain in Scotland and develop a workable solution.
As a higher education leader, it’s no secret that you’re facing a fiercely competitive graduate enrollment landscape. You know as well as I do that understanding what prospective students want and how they behave isn’t just helpful – it’s crucial to your institution’s success. That’s why we teamed up with UPCEA to conduct a deep dive into today’s post-baccalaureate students, uncovering their unique needs, expectations, and wants.
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This is no surprise to those working in higher ed in recent years. Graduate enrollment is slowing, with just a 1.1% projected increase over the next five years. Adding to the challenge, 20% of institutions dominate 77% of the market. For everyone else, it’s a fierce battle for a shrinking pool of candidates. To win, you’ll need a sharp, focused approach.
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Here’s something we see far too often: quality programs losing prospective students simply because critical details—like tuition costs and course requirements—are buried or missing entirely from the school’s website. In fact, 62% of students indicated they would drop off early in their search for this exact reason.
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Sticker shock is real. High application fees, vague cost information, and limited financial aid details are among the top reasons students abandon the application process late in the game. By addressing these concerns clearly and directly, you’re not just solving a problem, you’re building trust.
When it comes to connecting with prospective graduate students, email reigns supreme. Whether it’s inquiring about programs (47%), application follow-ups (67%), or receiving application decisions (69%), email is the channel students trust the most.
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The insights highlighted above are just the tip of the iceberg. Imagine what’s possible when you apply them to your graduate enrollment strategy.
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Your roadmap to winning in the competitive graduate market.
