In the 2015/16 academic year, according to official estimations, first-year international students brought to the UK economy a total of £22.6 billion. Since the non-EU students are charged with higher tuition fees than EU students and Brits, and they share a larger portion of international students their contribution to the UK’s budget was significantly higher. Non-EU students generated £17.5 billion of the total benefits as opposed to £5.1 billion generated by EU-students.
International education is one of the greatest export sectors of UK. The country currently hosts over a million international students being the second most popular study destination in the world. The presence of these scholars benefits the country in many aspects. Besides adding the overall diversity, these students bring on a lot of financial benefits to the local communities. There are many universities whose budgeting and their functioning as well, fully depends on international student tuition fees. Not to mention here that the economy of small towns highly depends on the profits foreigners bring.
The UK universities are arguably global leaders in higher education. But, along with being worth-seeking, a British degree comes at a higher price. In addition to higher university tuition fees, studying in UK carries a number of expenses international students need to take care of since the first day they land in the country. Renting, food, bills, night outs and so many other daily activities can peak at higher amounts of money.
The Higher Education Policy Institute gave this rough estimation of international students’ contribution to the UK’s economy under their report named “The costs and benefits of international students by parliamentary constituency”. By comparing the cost of hosting the actual number of international students and the economic profit in return, they found out that having foreigners in UK is very beneficial to the economy.
The HEPI’s report divided the UK’s financial gains from international students into three categories: fee income, non-fee income and visitors. Overall, the UK collected £10.7 billion from international students’ spendings in university fees, while £11.3 billion collected were from non-fee incomes and £0.6 billion of earnings came from visitors.
Per an individual, the financial benefits of UK were different depending on their nationality. A non-EU international student who pays higher tuition fees and can’t pursue the financial support as their resident or EU peers, normally contributes more. According to the HEPI’s report, a non-EU student in 2015/16 brought alongside a profit of £102,000, as opposed to £87,000 from an EU student. Their total net economic impact was £68,000 for an EU student and £95,000 for a non-EU student.
On the other hand, the cost of hosting international students is significantly lower. Referring to the Hepi’s figures, in total it cost £2.3 billion to the UK’s budget to host their international student body in 2015/16. These costs were mainly associated with student support programs, teaching grants awarded to universities and other public services related to students. Similar to the benefits, the cost of hosting EU students is lower compared to hosting non-EU students, the report reads. Typically, hosting EU students it took £1.1 billion to the UK’s economy, as opposed to £1.2 billion spent on hosting non-EU international students. However, individually hosting an EU student was more expensive than hosting a non-EU international student. This is because EU students enjoy privileges almost equally to resident students. The total cost of hosting non-EU international students originated from offering other public student services rather than student support and teaching grants.
As such, if we were to compare the total amount of money spent to accommodate international students and the amount of money the UK collected from them, it turns that hosting international students is worth enough. If we subtract £22.6 billion earned from international students and £2.3 billion allotted to accommodate them we get a net profit of £20.3 billion. Otherwise stated, for every 15 EU students and 11 non-EU students, the UK economy earned £1 million.
Further on, the report sheds light on the net economic impact international students have for each parliamentary constituency in UK. As it can be easily seen there were variations in terms of financial gains for each different area of the country. Surely London as one of the most popular study destination, often regarded as the world’s capital of higher education, collected the most (£1.4 billion). Using the regional distribution of international students and their net economic contribution it was found that on average their contribute for each area was £31 million.