Tag: immigration white paper

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

    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.

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  • UK unis could take £620m hit from international student levy

    UK unis could take £620m hit from international student levy

    Based on the latest HEPI data, the Institute estimates the levy could “hamper universities’ ability to compete with institutions in other countries,” said independent researcher Mark Fothergill, who compiled the data. 

    The proposed 6% levy on international students’ tuition fees was first introduced in the government’s highly anticipated immigration white paper, coming as a surprise to many in the sector.  

    HEPI has warned that the policy will hit both large internationally engaged universities and smaller specialist institutions. According to the analysis, the largest financial losses are expected to hit big metropolitan universities with high proportions of international students.  

    Namely, University College London (UCL), which derives 79% of its fee income from non-UK students, could be faced with financial losses of £42m. 

    Meanwhile, Manchester University and King’s College London (KCL) could also be hit with heavy losses of £27m and £22m respectively, with 19 institutions paying at least £10m. 

    Stakeholders have pointed out that while the levy is intended to raise money for the “higher education and skills system”, it is unclear if all the money will come back out of the treasury, and how it will be spent if it does. 

    “International students are the backbone of our higher education system, contributing over £10 billion in fees to English universities – around £4.50 of every £10 of fee income,” Fothergill said. 

    “No wonder the 6% levy is seen as a tax on one of the country’s best-performing sectors,” he added.  

    With more details expected in the autumn budget, universities are left with two options: pass the cost onto students and become less competitive or absorb the costs and leave less funding for teaching and research, HEPI suggested.  

    While universities haven’t announced to what extent they would try to absorb the extra costs, a reduction in international student numbers – whose fees subsidise university research – would also hamper sector finances.  

    Speaking at a conference last month, the UK skills minister Jacqui Smith maintained the government was “not levying international students directly”, suggesting it would help show students’ economic contribution to local communities.  

    The levy is a shadow looming large over universities as they prepare for the next academic year

    Nick Hillman, HEPI

    “Threatening an expensive new tax on one of the country’s most successful sectors with only a rough idea of how the money will be used seems far from ideal,” said HEPI director Nick Hillman.  

    “Currently, the levy is a shadow looming large over universities as they prepare for the next academic year,” he added.  

    Amid policy volatility in other markets, the UK has increasingly been cited by students as the most stable of the ‘big four’ study destinations, with stakeholders keen to preserve this reputation.

    “There are good reasons why Australia opted not to implement a levy when it was proposed there a couple of years ago,” warned Fothergil.  

    With the UK higher education sector already facing severe financial headwinds, Hillman said university leaders were worried the levy will be “yet another weight dragging them down in the struggle to remain globally competitive”. 

    According to OfS data, 72% of providers could be in deficit by 2025/26, with a sector-wide deficit totalling £1.6bn.  

    Alongside the levy, the government’s white paper proposed shortening the graduate route visa from two years to 18 months, and tougher Basic Compliance Assessments (BCA), with the latter set to be introduced in September.  

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