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.
StatsCan dropped some college financial data over the XMAS holidays. I know you guys are probably sick of this subject, but it’s still good to have some national data—even if it is eighteen months out of date and doesn’t really count the last frenzied months of the international student gold rush (aka “doing the Conestoga”). But it does cover the year in which everyone now agrees student visa numbers “got out of control,” so there are some interesting things to be learned here nonetheless.
To start, let’s look quickly at college income by source. Figure 1, below, shows that college income did rise somewhat in 2022-23, due mainly to an increase in tuition income (up 35% between the nadir COVID year of 20-21 and 22-23). But overall, once inflation is taken into account, the increase in college income really wasn’t all that big: about a billion dollars in 2021-22 and about the same again in 2022-23, or about 6-7% per year after inflation. Good? Definitely. Way above what universities were managing, and well above most sectors internationally? But it’s not exactly the banditry that some communicators (including the unofficial national minister of higher education, Marc Miller) like to imply.
Figure 1: College Income by Source, Canada, 2017-18 to 2022-23, in Billions of $2022
Now I know a few of you are looking at this and scratching your heads, asking what the hell is going on in Figure 1. After all, haven’t I (among others) made the point about record surpluses in the college sector? Well, yes. But I’ve only ever really been talking about Ontario, which is the only province where international tuition fees have really taken flight. In Figure 2, I put the results for Ontario and for the other nine provinces side-by-side. And you can see how different the two are. Ontario has seen quite large increases in income, mainly through tuition fees and by ancillary income bouncing back to where it was pre-COVID, while in the other nine provinces income growth is basically non-existent in any of the three categories.
Figure 2a/b. College Income by Source, Ontario vs Other Nine Provinces, 2017-18 to 2022-23, in Billions of $2022
(As an aside, just note here that over 70% of all college tuition income is collected in the province of Ontario, which is kind of wild. At the national level, Canada’s college sector is not really a sector at all…their aims, goals, tools, and income patterns all diverge enormously.)
Figure 3 drills down a little bit on the issue of tuition fee income to show where they have been growing and where they have not. One might look at this and think its irreconcilable with Figure 2, since tuition fees in the seven smaller provinces seem to be increasing at a rate similar to Ontario. What that should tell you, though, is that the base tuition from which these figures are rising are pretty meagre in the seven smallest provinces, and quite significant in Ontario. (Also, remember that in Ontario, domestic tuition fees fell by over 20% or so after inflation between 2019-20 and 2022-23, so this chart is actually underplaying the growth in international fees in that province a bit.)
Figure 3: Change in Real Aggregate Tuition Income by Province, 2017-18 to 2022-23, (2017-18 = 100)
Now I want to look specifically at some of the data with respect to expenditures and to try to ask the question: where did that extra $2.2 billion that the sector acquired in 21-22 and 22-23 (of which, recall, over 70% went to Ontario alone) go?
Figure 4 answers this question in precise detail, and once again the answer depends on whether you are talking about Ontario or the rest of the country. The biggest jump in expenditures by far is “contracted services” in Ontario—an increase of over $500M in just two years. This is probably as close a look as we will ever get at the economics of those PPP colleges that were set up around the GTA since most of this sum is almost certainly made up of public college payments to those institutions for paying the new students had arrived in those two years. If you assume the increase in international students at those colleges was about 40,000 (for a variety of reasons, an exact count on this is difficult), then that implies that colleges were paying their PPP partners about $12,500 per student on average and pocketing the difference, which would have been anywhere between about $2,500 and $10,000, depending on the campus and program. And of course, most of the funds spent on PPP were spent one way or another on teaching expenses for these students.
Figure 4: Change in Expenditures/Surplus, Canadian Colleges 2022-23 vs 2020-21, Ontario vs. Other 9 Provinces, in millions of 2022
On top of that, Ontario colleges threw an extra $300 million into new construction (this is a bit of an exaggeration because 2020-21 was a COVID year and building expenses were abnormally low), and an extra $260 million (half a billion in total) thrown into reserve funds for future years. This last is money that probably would have ended up as capital expenditures in future years if the feds hadn’t come crashing in and destroying the whole system last year but will now probably get used to cover losses over the next year or two instead. Meanwhile, in the rest of Canada, surpluses decreased between 2020-21 and 2022-23, and such spending increases as occurred came mostly under the categories “miscellaneous” and “ancillary enterprises.”
2022-23 of course was not quite “peak international student” so this analysis can’t quite tell the full story of how international students affected colleges. We’ll need to wait another 11 months for that data to show up. But I doubt that the story I have outlined based on the data available to date will not change too much. In short, the financials show that:
Colleges outside Ontario were really not making bank on international students.
Within Ontario, over a third of the additional revenue from international students generated in the 2020-21 to 2022-23 period was paid out to PPP partners, who would have spent most of that on instruction.
Of the remaining billion or so, about a third went into new construction and another 20% was “surplus,” which probably meant it was intended for future capital expenditure.
The increase in core college salary mass was miniscule—in fact only about 3% after inflation.
If there was “empire building” going on, it was in the form of constructing new buildings, not in terms of massive salary rises or hiring sprees.
