Brexit to reduce EU tuition fee revenue for all but Oxbridge, forecasts predict

A report by London Economics for the government suggests Brexit could lead to 57% fewer first-year EU enrolments.

Brexit could reduce tuition fee income from EU students by approximately £196.8 million – with all universities, except Cambridge and Oxford, expected to lose students and revenue, government forecasts suggest.

The figures come from independent projections by London Economics commissioned by the government ahead of the UK’s exit from the European Union.

London Economics delivered its report to government – which assesses the likely impact of Brexit on EU student recruitment and fee revenues – prior to April 2019. The government did not publish the report at the time because of ongoing negotiations with the EU, but has now published it on its website.

It anticipates that Brexit will lead to 35,540 (57%) fewer first-year EU enrolments.

The report considers the separate and combined impact of restricting the right to bring dependants to the UK, to work in the UK indefinitely post-study, to claim home fee status, and access tuition fee loans.

These four policy changes are the most significant for EU applicants after July 2021.

All four changes would lower student intake for all universities. However, the report predicted that if EU students paid the same fees as non-EU international students, universities could counterbalance some – but not all – of their loses.

Forecasters divided UK universities into four categories: cluster one (Oxford and Cambridge), cluster two (the Russell Group), cluster three (medium tariff providers) and cluster four (low tariff providers).

Using 2016/17 enrolment and continuation data, London Economics tried to anticipate the likely aggregate impact of the changes on tuition fee revenue “by modelling the expected duration of study, accounting for completion rates (by study level and mode), and discounting to net present values”.

“On average, the combined impact of all four policy changes associated with the 2016/17 cohort of EU students – over their entire study duration – is estimated to reduce tuition fee income by £1.20 million per institution,” the report explains, but the averages mask “significant differences across university clusters”.

The figures suggest that only Cambridge and Oxford universities (cluster one) will be able to off-set the financial loses of reduced intake with higher fees – and would be “better-off by £8.37 million on average in terms of tuition fee income”.

“In contrast, institutions in cluster two, three and four would be financially worse-off, with losses of £0.85 million, £1.60 million and £1.42 million per institution (on average, respectively). These losses are primarily driven by reductions in the number of EU undergraduate students.”

Across the sector, London Economics predicts the overall reduction could amount to near £200 million.

“In aggregate across all institutions, for the 2016/17 EU student cohort, the combined effect of all four policy changes corresponds to a total loss in tuition fee income of £196.8 million.

“Broken down by study level, the loss in tuition fee income of approximately £206.2 million generated from EU undergraduate students is partially offset by additional fee income from EU postgraduate students of approximately £9.3 million.”

Read more: Hesa releases higher education student data for 2019/20

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