Key Takeaways
- Scotland international students decline has cost the UK economy nearly £3 billion.
- Scotland’s universities face growing financial pressure from lower overseas enrollment.
- Experts urge stable immigration policies to keep the UK globally competitive.
A decline in Scotland international students enrollment has reduced Scotland’s economic contribution by nearly £3 billion over the past two academic years, according to a report released Thursday, as immigration policy changes and growing global competition continue to affect UK universities.
International student numbers across the UK have fallen 12% since the 2022/23 academic year, according to a report published by the Higher Education Policy Institute (HEPI) and Kaplan International Pathways. The study, prepared by London Economics, estimates the decline has reduced the UK’s net economic benefit by about £2.9 billion.
Report Highlights Economic Value of International Students
The report found that 404,500 international students beginning higher education courses in the 2024/25 academic year are expected to generate £45.1 billion in economic benefits during their studies while costing the public sector an estimated £4.7 billion. That represents a benefit-to-cost ratio of 9.7 to one.
In Scotland, 36,300 international first-year students are projected to make a net economic contribution of £2.93 billion during the 2024/25 academic year. Researchers estimated that every Scottish parliamentary constituency benefits economically from international students, although the impact varies depending on enrollment.
Using students’ term-time addresses, the report estimated an average economic benefit of between £410 and £480 per resident across Scotland. Each constituency recorded average benefits of about £59 million compared with estimated public costs of £8 million.
The report also found Scotland international students enrollment fell by 4,645 compared with two years earlier, contributing to financial pressures facing colleges and universities.
Immigration Changes and Brexit Affect Enrollment
Researchers attributed the decline Scotland international students numbers to immigration policy changes and stronger competition from other countries recruiting international students.
The report said Britain’s departure from the European Union also continues to affect enrollment. Since the 2020/21 academic year, the number of first-year students from EU countries has dropped 59% across the UK.
Students from outside the European Union now account for about 93% of international first-year enrollments. India remains the largest source of international students, followed by China and Pakistan. Among EU countries, Ireland, France and Germany provide the largest number of students.
International students pay tuition fees that help support universities financially. In Scotland, tuition for Scottish students is funded by the government through allocated places, while universities can enroll unlimited numbers of overseas students. International students also contribute to local economies through housing, transportation, shopping, and spending by visiting family members.
Universities Call for Stable Government Policy
The report ranked Glasgow North as Scotland’s highest-performing parliamentary constituency for economic impact, with about 6,150 international students generating a net contribution of £467 million. Edinburgh East and Musselburgh, Edinburgh South West and Edinburgh South also ranked among Scotland’s strongest contributors.
Linda Cowan, managing director of Kaplan International Pathways, said the UK must remain competitive in an expanding global education market.
“We must continue to demonstrate the value of a UK education and ensure international students feel welcomed from the moment they consider applying,” Cowan said. “Government must also be part of the solution, providing a stable, competitive, and welcoming policy environment.”
Rose Stephenson, director of policy and strategy at HEPI, said policymakers should weigh the economic consequences of reducing overseas student numbers.
“If ministers decide to further reduce Scotland international students‘ numbers, they should be clear that there will be economic costs as well as potential political benefits,” Stephenson said.
Maike Halterbeck, a partner at London Economics, said the report shows international students remain a major contributor to the UK economy but warned further policy changes, including a proposed international student fee levy, could lead to additional declines in enrollment.
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