International students: A+ or D- for the UK?

The UK’s approach to international students coming to the UK has changed significantly in the last couple of years.

Under Labour, international students were an economic silver-bullet, a win-win for both the education sector and the broader economy, and as a result the Labour government introduced initiatives aimed at significantly increasing the number of international students coming to Britain. But the Coalition government sees the issue of international students rather differently, and this month (March 2011) announced plans that will, they say, reduce the number of student visas issued by 70-80,000 (Theresa May statement to Parliament, 22 March 2011).

There has, unsurprisingly, been significant opposition from universities, further education institutions and others. A series of reports pointed out that international students deliver significant economic benefits to Britain – estimates range from £3.48 bn (COMPAS breakfast briefing, October 2010) to £40bn annually (Home Affairs Select Committee report March 2011) depending on how you calculate them.

So, if students really are so valuable to the UK economy, why is the government trying to reduce their numbers?

One important reason is the target the government has committed to – reducing net migration “to the tens of thousands”.

The Migration Advisory Committee (MAC) suggested last year that, since students comprise 60% of non-EU immigration, student migration needs to be responsible for 60% of the cut to net migration (assuming each route takes a proportional cut).

There were 253,845 student visas issued in 2010, with another 31,770 for dependents, but achieving cuts in net migration is much more complicated than just cutting the number of visas issued. There is a balancing act to be performed between numbers of people coming in and the number leaving – and even then, the figures are contentious.

Which brings us to the changes the government introduced in March 2011.

Much of the policy focus is on tackling abuse of the student visa route. The sudden spike in student visa applications from India, Bangladesh and Nepal following the introduction of the Points Based System in 2008 suggested potential abuse – in Nepal applications increased from 581 in 2008 to 10,104 in 2009, declining to 2,333 in 2010. Policies introduced last week were partly designed to discourage economic migrants from taking advantage of the student visa system by making it harder for students to work or stay in the UK after their course finishes, toughening-up entry requirements and tackling ‘bogus’ colleges that provide immigration papers to students but do not provide education.

So, what will be the impact of these new policies on visas issued?

The government predicts the policies will cut the number of student visas issued by 70-80,000, but two factors make it hard to assess whether this will happen. First, there is no numerical cap on student visas, so visas won’t stop being issued when they reach a certain level. Second, the government has not specified which policies will deliver what proportion of the 80,000 cuts. The government’s impact assessment may go some way to answering this, but its release (initially due yesterday, 31 March 2011) has been postponed.

The key thrust of the new policy – stamping out abuses of the system – will reduce student migration by only a fraction of government targets. UKBA’s own analysis (UK Borders Agency December 2010) suggests that only about 2% of university students and 14% of other international students were considered to be “potentially non-compliant” with their visa restrictions in 2009-2010 (meaning they were not studying or not known to have left the country when their visa expired). These figures are based on a non-representative sample of universities on the UKBA’s “highly-trusted sponsor list” and further education colleges and language schools which had been investigated for suspected abuse.

A lack of effective exit data also means that we simply don’t know how many of these potential non-compliant students are still in the UK. So the available evidence places the overall number of overstaying ‘bogus’ students well under the government’s planned 80,000 student visa reduction.

Aside from measures specifically designed to stamp-out abuse, the potential impacts of other elements of the new policies are also unclear. The changes to permission to work and the Post Study Work (PSW) route may additionally discourage some from applying to courses in the UK but we can’t reliably estimate how many. The PSW is used by around 10% of students, though more than half said it was a factor in deciding to come to the UK. Both of these changes may also impact on the UK’s attempts to attract and keep the “brightest and the best” here.

But, presuming that the government’s changes do deliver their hoped-for cut of 80,000 student visas issued, what will the impact on net migration be?

The government is using Office for National Statistics (ONS) data on long-term migration flows (i.e. those entering and leaving the UK for a minimum of one year) to measure net migration. The ONS estimates that long term net migration to the UK was around 226,000 in the year to June 2010, meaning that getting net migration down to the tens of thousands would need a cut of over 126,000 in net migration.

Following the MAC’s methodology – which the MAC points out is crude – students need to be responsible for 60% of the cut. That means that net student migration would need to be cut by more than 75,000.

But the government’s 80,000 figure is not based on long-term net migration, but on actual visas issued. Reducing visas by 80,000 does not lead to a reduction of 80,000 in long-term migration to the UK because, for example, some visa holders do not come to the UK while others may stay for less than one year. Using MAC methodology to convert visas issued into ONS long-term immigration statistics, 80,000 visas translates into a decrease of about 43,000 in long-term inflows.

The calculation of the impact on net migration is more uncertain, but it is safe to assume that the long-term impact on annual net migration must be somewhat less than the immediate impact on inflows. This is because reducing inflows now means there will be fewer people to leave later.

If all of this gives you a headache, you are not alone – but the fundamental problem faced by the government is actually quite a straightforward one. Abuse of the UK’s student visa system is a problem, but while addressing it is important, it will only have a limited impact on net migration figures.

So, the government is essentially stuck between a rock and a hard place. It is clear that the announced reduction in student visas won’t be enough to reduce net migration of students to help bring overall net migration down to the ”tens of thousands” but it is already drawing criticisms for possible damage to the UK’s education sector. This means that the question of how precisely the government is going to meet its target of reducing net migration to the tens of thousands is still not clear.

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Further information

• See our briefing ‘Non-European Student Migration to the UK‘

Author: Robert McNeil