A fall in international students applying for visas risks prolonging the existential threat facing some of England’s universities, sources in higher education say, amid warnings that an increase in tuition fees has already been “wiped out” by the government’s tax rises.
Despite the decision by ministers to increase fees for UK students this year to £9,535 – the first rise in eight years – figures across the universities sector said the financial situation remained dire, with further course closures and redundancies being widely considered.
The increase in employer national insurance contributions has actually left many institutions worse off overall, the Observer has been told.
Some universities will also be unable to apply the fee increase to current students and only get the higher payments from new arrivals. “The fee increase was welcomed, but has mostly been wiped out,” said a senior source.
Concerns have been underlined by official data showing that applications for study visas were 13% lower in the year to the end of January than they were a year earlier, driven by a clampdown on students bringing dependants. Universities use lucrative income from overseas students to subsidise both domestic student courses and research.
Universities have to make up funding deficits of £5.3bn a year for research and about £1.7bn a year for teaching domestic undergraduates, with sources saying those deficits are “growing year on year”.
Vice-chancellors are now gearing up to demand an end to more rules and rhetoric damaging their international intakes as part of a continuing refresh of the government’s overseas students strategy. It risks becoming a flashpoint between the education department and the Home Office.
The news comes amid new research that suggests the public are not opposed to the arrival of international students. In fact, it suggests that a majority of people – 61% – would prefer current levels of international student migration to stay the same or increase. The polling is included in a report by the British Future thinktank that has found just over a quarter of the public want to reduce or stop international student migration, which makes up about 40% of total UK immigration. Only 28% of the public think of international students as migrants.
However, the report revealed concerns over housing pressures. “As the immigration debate becomes more contested and polarised, universities and those who represent the sector should not take that support for granted,” said Heather Rolfe, research director for British Future, who led the study.
“Universities will need to reassure the public that international recruitment does not mean that home students lose out and that local pressures – for example, on housing – are being well managed by universities and local authorities.”
Nick Hillman, director of the Higher Education Policy Institute thinktank, said that while the fall in visas could have been worse, the finances of the sector remained “a mess”.
He added: “The tuition fee rise for home students does not ameliorate the challenges. It makes literally no difference, because every single penny and more is being taken by the national insurance increase. Even before you take inflation into account, universities are actually down, not up.”
Vice-chancellors do see some positive signs on the horizon, however. There is widespread support for a shift in tone from the education secretary, Bridget Phillipson, who released a video in August appealing to international students.
Harry Anderson, deputy director at Universities UK International (UUKi), said: “The UK is a leading destination for international students, reflecting the strength and reputation of our higher education sector. Not only do these students contribute to the success of our universities through the significant cultural and social contributions they make, but they also boost the UK economy by £41.9bn each year.”
There is increasing hope that a combination of a government solely focused on growth, together with increased hostility to international students in the US, Canada and Australia, could see Britain benefit as a relatively stable location to study. Ben Moore of the Russell Group of universities said the popularity of Britain with international students “should be seen as a genuine UK success story”.
He added: “We know there is strong public support for international students, and we also welcome the education secretary’s recent positive messaging. We would like to see this backed up by stable, supportive immigration policy.”
The Department for Education was approached for comment.
