The financial importance of international students is undoubted – Universities UK estimates that they contribute £25 billion a year to universities and the UK economy – and it is expected to increase in the coming years. The sector is projecting a rise of 26 per cent in fee income from international (non-EU) students, from £3.6 billion in 2014-15 to £4.8 billion in 2018-19, accounting for 15 per cent of its total income.
This prediction is in line with the British Council’s forecasts in 2014 that the UK would gain 83,000 international postgraduate students over the next 10 years.
A challenge to the sector in meeting these predictions may be that recent growth in international student numbers has been driven primarily by demand from Chinese students.
There was a 22,000 increase in Chinese entrants into full-time taught masters courses from 2007-08 to 2015-16, but only a 5,000 increase in other international masters entrants.
This means that the share of full-time postgraduate masters students who are Chinese increased from 12 to 26 per cent, while the proportion from other non-EU countries declined from 42 to 34 per cent.
The British Council suggests that providers should aim to diversify student populations by attracting students from other rapidly developing economies, such as Pakistan, Indonesia, Saudi Arabia and Vietnam. At present, these countries make up only 6 per cent of all international full-time taught masters students.
Largest increases in Chinese students at high-tariff institutions
The increase in Chinese masters students has been particularly concentrated at institutions with higher entry requirements in terms of UCAS tariff points. Since 2007-08, the number of Chinese taught masters students at these institutions has grown strongly and consistently, whereas numbers have actually declined at medium- and low-tariff institutions in the most recent years.
This means that by 2015-16, 80 per cent of Chinese taught masters students were at high-tariff institutions. This is a considerably higher proportion than that of UK-domiciled students, only 49 per cent of whom attend high-tariff institutions, and higher than the equivalent proportions of students from other non-EU countries, such as India (50 per cent), Saudi Arabia (49 per cent), Pakistan (48 per cent) and Vietnam (30 per cent).
International students, international competition
It is not clear that continued growth in Chinese student numbers is possible, and providers face competition from other parts of the world. Australia has just launched a ‘10- year roadmap’ to attract 720,000 new international students by 2025.
On the other hand, the recent fall in the value of the pound makes an English degree relatively cheaper and should encourage international demand. For example, an MBA from Yale costs $64,200. At exchange rates a year ago this would have been £46,121, making it cheaper than an MBA from Imperial which costs £47,000. However, due to the recent fall of the pound, the Yale MBA now costs £51,777, giving Imperial an advantage.
Overall, the data shows that the composition of the international taught masters student population has changed dramatically over the past decade, with a great shift towards the recruitment of Chinese students. What is not known is whether this trend can continue, or if a rebalancing will occur in the coming years.
This blog post is part of a series that accompanying our latest analysis of higher education in England.