A reduction in international student numbers has resulted in a £2.9bn loss to the UK economy, a report has found.
The research calculated that every 10 international students generate £1 million in net economic benefit to the UK.
It means international students who began higher education courses in the UK in 2024/25 are expected to generate a net economic benefit of £40.4 billion for the UK over the course of their studies.
However, since 2022/23, there has been a fall of about 54,500 in international students (12 per cent), as the government toughened its immigration policy by introducing restrictions on bringing dependants and through the planned reduction in the length of graduate visas. There have also been suggestions that universities could face a levy of 6 per cent on the income raised from overseas students' fees.
If the 2022/23 numbers had been sustained in 2024/25, the net impact would have been approximately £2.9bn higher, the equivalent of 23,300 full-time jobs, according to the report published today by the Higher Education Policy Institute (HEPI) and Kaplan International Pathways.
The economic impact is spread across the UK, with each student making a £62m net contribution to the UK economy per parliamentary constituency.
The report, produced by London Economics, found that the 404,500 international students who started UK higher education courses in 2024/25 would generate total economic benefits of £45.1 billion over the course of their studies, while costing the public purse an estimated £4.7 billion, resulting in a benefit-to-cost ratio of 9.7 to 1.
The report comes as more countries than ever are competing to attract international students. It says the ‘big four’ of the US, UK, Australia and Canada have become the ‘big 14’.
“All indicators point towards ambitious international students having even more choice in the future,” it said. In the current period of increasing competition, this report provides strong evidence that the UK’s higher education sector is losing its global competitive standing as talented students choose other options for their studies.”
Linda Cowan, managing director at Kaplan International Pathways, said: “The UK is home to some of the world’s foremost universities, but we cannot rely on reputation alone. We must continue to demonstrate the value of a UK education and ensure international students feel welcomed from the moment they consider applying.”
"If international education is to support the UK's growth ambitions, government must also be part of the solution, providing a stable, competitive and welcoming policy environment that gives students confidence to choose the UK."
Rose Stephenson, director of policy and strategy at HEPI, said immigration is "a top concern for voters in Britain".
"It is important that the debate around immigration policy is informed by evidence," she said.
"This report shows that international students generate very substantial benefits for the UK economy and underpin the financial sustainability of many universities.
"If ministers decide to further reduce international student numbers, they should be clear that there will be economic costs as well as potential political benefits. At a time when the UK is seeking stronger economic growth, those trade-offs deserve an honest and open discussion.”
