The first chapter of the report, The politics of student mobility, examines how government policy across the world has impacted the health and vitality of higher education institutions.
In Australia for example, universities have successfully demonstrated the value of international students, which directly led to a relaxation of immigration policy following the publication of the Knight Review in 2011. The latest government statistics saw an 8% increase in the number of overseas students studying at Australian higher education institutions in 2015*.
Conversely, in the UK, there has been a reduction in the number of students from outside the EU over the last five years, with market share falling 3% between 2010/2011 and 2013/2014**. In her speech to the Conservative Party Conference, Home Secretary Amber Rudd, announced that the government will shortly consult on a new student immigration system which may have further consequences for the UK’s higher education sector.
Many higher education institutions across the globe, particularly those in developed countries, are looking at how to increase international student numbers to help them expand
The second chapter of the report, Financing international student mobility, demonstrates that fees from international students provide some global higher education institutions with up to 30% of their revenue, and this looks set to increase for those who can attract the best students. It is estimated that the current international student market is worth £20bn*** and the OECD forecasts that the number of international students will increase to 8 million by 2025.
Grant Thornton’s analysis reveals that international students’ tuition fees accounted for 12% of UK and 17% of Australian HEI total income in 2014/15. The analysis shows that in the UK, nine universities draw more than a quarter of their total income from non-EU international students. The report also considers new models that higher education institutions can look at to attract international students and protect the revenue they bring.
Commenting on the findings of the reports, Richard Shaw, Head of Education at Grant Thornton UK LLP, said: “Many higher education institutions across the globe, particularly those in developed countries, are looking at how to increase international student numbers to help them expand. In the UK, higher education institutions are experiencing increased competition from US and Australian institutions in particular, and mainland European institutions are also seeking to expand their international reach by offering more courses in English. It is therefore concerning that just at the time when competitor countries are looking to increase their international student numbers, there are proposals for a tightening of student visas in the UK.”
It is more important than ever for higher education institutions to consider how they react and respond to both the challenges and opportunities in the international student market
Grant Thornton reports that many countries are using international student mobility to increase their influence and reputation. In Germany for example, a new programme has been introduced to encourage half of all degree students to study abroad by 2020, and historically this strategy of ‘soft power’ has been very successful for the UK.
While consultations around visas may have legitimate political rationale behind them, history shows us that changes to foreign, economic and security policy can have a significant impact on the international student market. Richard Shaw said that, ‘In light of the UK government’s proposed consultation around student visas, it is more important than ever for higher education institutions to consider how they react and respond to both the challenges and opportunities in the international student market.’
The report notes a number of aspects that higher education institutions should consider including, increasing the diversity of their student intake, perhaps by using targeted fee reductions; striking a balance between maximising income while still providing sufficient financial support to students; and ensuring that any overseas partnership or affiliate programmes enhance not only the experience of students, but also the institutions’ global reputation.
The report concludes that higher education institutions need to pay close attention to the motivations of international students and provide them with the right incentives to study. By protecting and growing the income they receive from international students, institutions will be in a better position to fund strategic priorities and avoid market shocks.
*** Grant Thornton estimate [based on reported income from tuition and fees in the US (US$ 19,754,000,000 [£13.8 billion as of 16 June 2016]: The Economic Benefit of International Students. Washington D.C.: NAFSA, 2014. Web. 7 June 2016.) and analysis of HEI income in the UK (£4 billion: Grant Thornton UK LLP. Adapting to Change. 2016. Web. 7 June 2016. The Financial Health of the Education Sector.) and Australia (A$4.7 billion [£2.4 billion as of 16 June 2016]: Ibid.)