• In the United Kingdom, a large number of universities are aiming to drastically cut costs through staff redundancies and cutting lower demand, non-viable courses.

Many UK institutions are suffering from a reduction in international fee revenue.  Study visa applications  – from main applicants –  fell by 14%  in 2024.

• In Canada, the picture is even bleaker.  Study permit approvals for international college students are said to have more than halved, with worse news predicted in 2025, in part due to reputational fallout.
• Australia was hit by a 44% reduction in visa  applications lodged between July and October 2024

In the cases of these three countries, the problems for the sector are driven, to a major extent, by a shift in government policy. This is in response to immigration concerns amongst large swathes of the electorate.

Whereas the UK curbed demand through discontinuing the issue of visas for dependants of international students pursing postgraduate taught courses, Canada and Australia are experimenting with caps, alongside other targeted restrictions.  The expansive international student recruitment stance of prior years has been drastically reversed.  In Australia, the uncertainty is further amplified by political disagreements centred on how the objective to cap new commencements to 270k should be achieved.

Winners and losers?

Amongst the impacted countries, some institutions are still able to shine. Or at least fare relatively better.   

• In the United Kingdom, higher-ranked universities amongst the Russell Group have a double advantage.  They are better insulated from the impact of demand-side shocks, due to better diversification of revenues.   They can also benefit from lower overall demand, by reducing their admissions criteria, enabling students to trade up from universities perceived to be less prestigious, which in turn face the prospect of steeper declines in their numbers in face of declining share in a smaller market.
• It is different in Australia, where the prestigious Group of 8 universities are anxious about the constraints on their new overseas student commencement volumes implied by Ministerial Direction 111.  Having suffered disproportionately last year, a broad base of higher education institutions may now see the benefit of a possible wider distribution of students.

The University of Melbourne, one of the concerned Group of 8 universities in Australia

In Canada, certain student cohorts are less impacted than others.  The recently announced 2025 study permit caps reduce the total allocation by 10% to 437,000, around three quarters of which require the applicant to secure a provincial or territorial attestation letter (PAL or TAL).  This is designed to enable provinces to manage within the caps imposed on them.   Exchange students are now exempt from the PAL requirement, but it is newly extended to international students on master’s and doctoral programmes.  However, with study permits reserved for graduate student under the latest year’s scheme, some industry experts believe that undergraduate numbers could suffer.

Driven by political and public concerns about immigration, and pressures on housing and services, governments in all three destinations are leaning towards maintaining, or further tightening, immigration controls.  Federal elections lie ahead in Canada and Australia this year.  Neither Australia’s Liberal Party, nor Canada’s Conservative Party are in power today. But each of them promotes policies aimed at further curtailing immigration, including controls on international students.

Alternative destinations

Destination-wise, who is benefiting from the macro-level travails of the UK, Canada and Australia?

European Union (EU) countries have a growing appeal to international students. Tuition fees in the bloc tend to be lower than in the United Kingdom. An increasing number of programmes are taught in English, widening their appeal to international students. However, accommodation shortages are still creating supply-side problems, according to ICEF Monitor.

New Zealand is proving a hit, with recent impressive growth rates.  It is an attractive study destination, with positive ratings.   However, its institutional capacity is relatively small.

Looking good: the University of Otago, New Zealand

An opportunity for the USA?

The United States is an international education powerhouse, yet the proportion of overseas students across its thousands of institutions is very small in comparison to other leading destinations. An opportunity exists. Will the United States be an international education winner under Donald Trump?   Before he was re-elected as President, Trump promised an automatic green card for graduating students.

Rather at odds with his overall immigration stance, such a policy would appeal greatly to the technology sector. And obviously it would have a massive appeal to international students considering their choice of destination. Yet as with many things Trump says and does, it is hard to know whether it is a policy, a soundbite, or a passing thought which may be already forgotten. 

Making American international education even greater?

What is clear is that even without such a major move, the United States has a tremendous opportunity to win further share of the international student market. Whether Trump will move to attract or alienate international students this term is, of course, anybody’s guess.  Whilst other countries have set a clear medium-term direction on international student policy, the United States could have a very different stance depending on the week and the mood of its unpredictable President.

Canada

ICEF Monitor reported ApplyBoard’s analysis that new international student numbers could drop by almost 50% in 2024. 

To blame: the implementation of provincial quotas, the introduction of a requirement for prospective students to evidence a savings level of CDN$ 20,635 (over double the previous level), and a tightening of restrictions for those eligible for post study work rights. The number of Indian students approved for study permits in the first six months of 2024 dropped by 50%, with even larger declines from Nepal (76%), Nigeria (70%) and the Philippines (65%). 

Australia

In a move dubbed by a sector representative as “draconian” and “interventionist” new international student enrolments are now capped at 270,000.  An AUD$4bn economic hit and 22,000 job losses are anticipated in 2025.  When the caps per university were published, successful international recruiters the University of Sydney, and the University of Melbourne were amongst the big losers. The quotas imposed on them represent a significant reduction compared to their current enrolment numbers.  These institutions were exposed. They both have an international student mix of around 40%.

United Kingdom

Since the discontinuation of visas for the dependants of international students on taught postgraduate programmes, enrolments have been heavily impacted. Post-1992 universities are disproportionately affected.   A more upbeat tone was set by a recent Guardian article, which reported an improvement in the sentiment of prospective international students towards study in the UK. This is due to the Labour government’s election victory and the support that the new education secretary, Bridget Phillipson, has voiced for the sector.  But there are no planned moves to rescind the dependant ban. With an increase to the threshold for demonstrating sufficient maintenance funds imminent, along with the rise earlier in 2024 to the NHS surcharge, the UK international higher education sector is not expecting a significant upturn in its fortunes in the near future. 

A recent article in the Economist struck a bleak note, stating that ‘the foreigner boom is now turning into a bust.’

Nevertheless, as Michael Salmon reports of Wonkhe, the 17% decrease year-to-date in international student visas applications is perhaps better than many predicted.    When the dust clears after September intake, another important month for visa issuance, we will have a better sense of how UK institutions have fared, and the starting point for enrolment numbers in the new cycle.  The government’s commitment to the Graduate Route (enabling students to search for employment in the UK up to 2 years after graduation), and the headline grabbing measures in Australia and Canada, could still provide some respite for the UK sector.

United States

The United States, with its lower exposure to international students, is arguably going to benefit from the volatility in policy making elsewhere. However, as highlighted by, Jill Blondin, associate vice-provost for global initiatives at Virginia Commonwealth University in a recent online webinar, the high rate of visa refusals and the difficulty of getting visa appointments in key source markets such as India remains a barrier to the level of growth that may otherwise be expected.  

Alternative destinations?

The growth in the choice of destinations for international students, and the fast moving developments in policy, has made an accurate tracking of the global picture of winners and losers more complex.*

New Zealand is receiving positive media coverage currently in key source markets like India for its straightforward visa process, post study work regime and relative value for money.

This view appears to be at odds with IDP’s latest Emerging Futures research which positioned New Zealand at the bottom end of a value for money scale, according to the 11,500 students from 117 countries surveyed. 

Some European destination markets are offering a credible alternative to English speaking countries, driven in part by an increase in the number of courses taught in English.   France is one such example, with steady growth delivered over the last few years.  It plans to welcome 500,000 international students by 2027, compared to 412,000 in the academic year 2022/3. 

Ireland is another winner, following efforts geared towards developing internationalisation at its institutions, although its numbers remain comparatively small. The country hosted 35,000 international students in 2022/3, although these numbers look likely to grow.

Conversely, growth in the Netherlands has slowed following the government’s policy shift in response to the rapid increases in international students that are seen by many to have put pressure on resources and services in its university system.

China crisis?

Despite it still being a huge supplier of international students, a big shift in Chinese market demand has affected many destination markets  in the recent years following the covid-19 pandemic with Australia and the United States particularly hard hit due to additional geopolitical tensions. But domestic economic problems, a reduction in perceptions of the value of an international education for future employment prospects, and a demographic decline have also played a significant part.   It has become relatively attractive for students to stay at home for higher education, with local institutions improving their quality. With Chinese society becoming more inward looking, the rapid growth years for international recruiters appear to be over.    

Domestic economic woes are impacting on Chinese student mobility

Indeed, study destinations across East Asia have risen in popularity in recent years, with an increasing number of internationally mobile students from the region choosing to study closer to home. 

Alongside unfavourable Asian trends, several other key source markets supplying the big English-speaking destinations are suffering their own economic challenges.  Nigeria is the largest international student source market in Sub-Saharan Africa. The weak Nigerian naira (NGN) has depreciated by about 75% against both the British pound sterling (GBP) and the US dollar (USD) since September 2022. 

Future prospects

With such strong headwinds, driven by government policy changes,  the strategic options  available to higher education institutions in Canada, Australia, and the United Kingdom are limited.

A few institutions will continue to diversify their risk and set-up directly in the key source markets.

Southampton University, a high ranked UK higher education institution. recently announced it would open a campus in India offering UK degrees to a planned 5,500 new students a year.   It is the first high ranked institution to take advantage of the Indian government’s attempt to attract foreign universities, in order to meet the rising domestic demand which local providers are struggling to meet.    Southampton has the advantage of being able to make a £30mn investment over the next decade in the enterprise.   

From Hampshire to Gurugram

But such a bold move is not in the reach of many institutions.  Seeking cost efficiencies, consolidation of services across institutions or full mergers remain firmly on the menu of options.

Elsewhere, others have resorted to appealing against the tightening policy.

Universities Canada posted on X, “Cuts to international study permits damage Canada’s reputation as a premier education destination, impacting institutions nationwide.  It’s time for this to be the final reduction, allowing Canada and its universities to focus on rebuilding our global brand.”

At the moment this feels like a cry in the dark.   Universities are in a battle for share with each other in a market where growth in student mobility is, at best, constrained.

Government policies on immigration in Canada, Australia, and the United Kingdom mean that there are limited prospects, in the short to medium term, for a return of the rising tide that benefited all.  Their higher education institutions must urgently adapt to this new reality.

Footnote

*Additionally, there is a significant lag in publishing enrolment data for many destinations. Jisc, the organisation that publishes higher education statistics in the UK only recently released its 2022/23 data, several months later than originally planned.

On 11^th January, the University of York – a high-ranked Russell Group institution in the UK – was reported by the Financial Times to have lowered its entry requirements for international students for some programmes, including computer science and medicine.  Denied by the university as being a policy decision, it was presented instead as a flexible admissions approach for students who just miss their grade.

University of York

For many in the sector, this is the tip of a very large iceberg. One which UK higher education is struggling to navigate around.  As the FT put it: ‘The move by University of York follows warnings from cash-strapped higher education leaders about a downturn in the number of more lucrative international students coming to the study in the UK.’

The winter of our discontent

Coventry University and Sheffield Hallam University headline the mid-ranked UK universities reported to be in trouble.  Both institutions are under threat of breaching their banking covenants, according to Times Higher Education.  In December, Coventry University announced it would make £100m of cuts over the next two years.  At Sheffield Hallam University, 1,700 academic staff were invited to apply for a voluntary severance scheme.   

Tough times in the steel city

Government immigration policy, restricting visas for dependants of international students, and raising the minimum salary level at which skilled workers can obtain a visa, have impacted on the attractiveness of the UK as an international study destination. This is a significant root cause of the hit on the finances of many universities.  Funding for teaching domestic students has fallen significantly in England, with undergraduate annual tuition fees capped at £9,250 since 2017, in an environment of rising inflation rates.   Higher international student fees, which are not controlled, have underpinned the finances of many universities. Coventry University has previously been very successful in its international activities. In the academic year 2021/22, the last period for which data is currently published by the Higher Education Statistics Agency, Coventry enrolled 15,565 non-UK students, the 6^th highest total. 

Student immigration under pressure

Institutions in Australia, Canada, and the United States are facing international education market challenges of their own.

As highlighted by Alan Preece in his View from a Bridge blog, Canada’s growth in international student numbers has been stellar, with a doubling of study permit holders to over 800,000 from 2016 to 2022.  Concerns about the quality of applications, unregulated agents, diversity, the capacity of the sector to deliver good quality accommodation and services to international students, and weakening graduate outcomes, tarnish the success story.

Nick Cuthbert writes in the PIE News: ‘Immigration minister Marc Miller has gone as far as comparing the education system in Canada to a “puppy mill” with the student visa department being overloaded with poor quality applications.’

The other York University – in Toronto. No sign of any puppies.

The number of study permit approvals is already being given greater scrutiny by the national Immigration Department.    The Immigration, Refugees and Citizenship Canada (IRCC) will introduce a new Trusted Institution framework this year, aimed at further addressing the significant service and quality problems at some of the country’s institutions.

Recruitment from India is already impacted heavily, with study permits declining by over 40% since July 2022, according to MSM Reporter, following rising student dissatisfaction and geopolitical tensions between Quebec and New Delhi.

The Australian government is also attempting to tighten up on student and graduate visas, within a new Migration Strategy.  A new Genuine Student Test is being introduced, to mitigate the rising numbers of students perceived to be seeking work rather than study.  The strategy document also commits to better regulation of education agents to tackle the problem of visa misuse. 

International student numbers in Australia have been booming, with a 31% increase over the prior year to 746,080 for the January-September 2023 period.  

It is election year in the United States. The return of Donald Trump as president is quoted at 5/4 by Betfair Sportsbook, a UK bookmaker, denoting a 44.44% probability of success.  The United States is remains very strongly positioned in the world of international education, particularly in STEM disciplines.  But last time he was president, Trump’s anti-immigration rhetoric had a statistically significant impact on driving a proportion of international students to competing destinations.

As Preece points out, a rise international proactivity amongst United States institutions, combined with positive government support, has put the sector in a very strong position.  Higher education institutions in the United States will be watching the presidential election results from behind their couches.

Against this backdrop, 2024 is likely to be a year of challenges for international student recruiters in the United Kingdom, Canada, Australia, and the United States.  Granted, there may not be too many positives for institutions in the United States if Trump is victorious. Nor will universities in the United Kingdom be dancing in the streets if the ruling Conservative Party clings to power for another year before a general election is held, given its confusing and kneejerk shaping of immigration policy and its internal (and infernal) civil war.

All businesses, including higher education providers, prefer certainty.  Being beholden to the whims of politicians, in place of long-term vision and strategy, is frustrating for all actors in international education.  Despite this, there are substantial positive outcomes that may well emerge from the current gloom in the medium term.  Even if it does not feel like that at the moment.

Reasons to be cheerful

In the absence of increased government support or subsidies, consolidation and collaboration, and a drive for quality will become mission critical objectives for internationally-oriented higher education institutions in the four main English-language speaking destinations.  The goals of this should be:

• Improved services to international students, and prospective international students
• Engagement with and support for the career progress of international graduates
• Ability to sustain higher international fees (or lower discount rates from existing fees) due to the increased value of the proposition to students at all stages of the student journey

1. Consolidation and collaboration

This is not necessarily simply to suggest full mergers of public higher education institutions, although that could be a desirable outcome in some cases, in order to save back office costs and relieve financial pressures (see also footnote*).

Indeed, a mega merger – the largest in Australia higher education history – between University of South Australia and University of Adelaide has recently received government approval in Australia, leading to the creation of Adelaide University.  Driven by the pursuit of financial stability, and public funding considerations, the merger ‘will advance South Australia as a premier destination for international students, with $30 million to be invested in the recruitment of international students and an extra 6,000 international students projected by 2034’, as reported on the Insider Guides website. 

One half of a new mega university

An article from McKinsey & Company, a consultancy, last summer outlined the options for alliances for US higher education institutions (HEIs) , as an alternative to full mergers or acquisitions.  (The frequency of mergers and acquisitions was also found to be accelerating).    The motivation for greater collaboration, or formal integration, is declining domestic enrolments, an imminent demographic drop in high school leavers, and an inflationary cost base.

Instead of a full merger, universities and colleges should look at opportunities to:

• Share back office operations and administrative services with one or more other HEIs,  including international recruitment, admissions and enrolment services.  This would work best between HEIs in the same city, or between institutions with a similar profile of target markets and audiences.
• Formally collaborate on overseas promotion.  Solutions could range from pooling resources and effort for overseas recruitment travel and in-market activities, to joint ventures for the services provided by overseas recruitment offices and teams. 
• Alliances or joint ventures focused on transnational education opportunities, such as overseas campuses or strategic partnerships with universities in different countries of shared interest

2. Drive for quality in individual or allied institutions

Higher Education institutions like to talk about quality. But when it comes to the execution of an approach and processes to deliver international recruitment, student experience, and graduate outcomes, many are sadly lacking. To address this, HEIs should:

• Rationalise the number of education agents that each institution works with. This should improve both the quality and efficiency of recruitment. At the moment, some HEIs have agent lists running to hundreds of different agency partners.  As well as being hugely inefficient, and increasing acquisition costs, dealing with numerous recruitment partners – through a fragmented agent network – is risky from a compliance perspective.  One of the lessons from the rapid expansion of international students numbers in recent years is that some agents provide weak processes for attracting, engaging with, and receiving applications from their students.  Relationships with education agents should be managed much more effectively by education providers than they commonly are.
• Deploy tech-enabled enrolment processes, whether delivered via shared services between institutions or on an individual institution basis, can improve services to prospective students .  Too many universities still rely heavily on manual admissions decisions, some of which can take weeks to make, prompting international students to seek alternative options.  Developments in artificial intelligence are likely to revolutionise customer service and operational efficiency.
• Pursue best practices in delivering a great international student experience is an imperative for HEIs.  Not least, the preparation of students for finding job and career opportunities beyond graduation is a critical driver for how international students value their overseas university experience.  Bringing a focus to this aspect of the journey, and rigorously tracking international graduate outcomes so that they can be evidenced, enhances the reputation not just of the institution but of the sector overall.  It also enables inputs to be improved, amplifying value for future students.

Conclusion

Simply pushing up fees, or reducing discounts (bursaries and scholarships) for international students, is not always feasible as a way to improve revenue on lower enrolment volumes.  Whilst some institutions have an opportunity to manage pricing much better than they do today, many of them do not have the market power to increase prices. Nor will that be possible without tangible improvements to the value they offer to their customers.

However, HEIs can focus on both efficiency and cost savings in the acquisition of international students, and use some of the upside gained to invest in services and student experience.  This will create ongoing benefits for all parties. Institutions that are successful should be able to win volume market share, with a higher quality of revenue. International students will receive a much better return on their considerable investments.  Governments will see that the industry is trying hard to get its house in order on issues of quality and compliance. They may even decide to offer their universities greater support.

*Footnote

Matt Robb, Partner at Deloitte, wrote on his personal X account that, aside for a group of UK higher education institutions that do not have a ‘viable catchment & will never be financially strong enough to underpin high quality provision for a wide range of subjects…’ [Robb recommends that these ones should return to being colleges ‘much lower cost structure, or become someone else’s branch campus (but viability issues) or simply close.’].

‘Much of the remainder needs to consolidate. Rule of thumb: half the back office costs of the smaller institution can be saved. More if digital and tech properly applied but this is typically £10s of millions and won’t happen in a merger timescale.  Apply that rule to 2x £300M HEIs and the cost savings available through a merger are ~£75M. Discount by half for execution risk and you’re talking £25-£50M saving / surplus. There is no other solution for HEIs that looks like this.’