The University of Essex’s decision, made at the end of last year, to close its Southend campus with the loss of 400 jobs highlights the stark strategic choices faced by many of the UK’s higher education institutions.

Interviewed on Radio 4’s PM programme, the Essex Vice-Chancellor – Professor Frances Bowen – pointed to falling international student revenues as being the main driving factor in the cost-cutting decision.  Enrolment numbers of overseas students have seen severe declines at both Colchester and Southend locations.  Evan Davies, the PM presenter, suggested a “flawed business model”. Previous unsustainable expansion in international recruitment is now exposed to significant government immigration policy changes, he stated.

University of Essex to focus on its Colchester campus

Glasgow Caledonian University is facing a major crisis on its London campus with a £33m revenue shortfall and the loss of 100 jobs.  Its enrolment numbers have reportedly declined from 1,624 students in the 2024-25 academic year to only 31 in the current academic year according to the Financial Times*.   Over-reliance on postgraduate recruitment from Pakistan and India – two of the markets most affected by recent market turmoil – were exacerbated by internal compliance problems and staff claims that they were pushed to focus on student volume at the expense of quality, according to the FT.

With the UK government’s international education strategy high on ambition but short on practical detail on how it can be executed, and with the global economic outlook rapidly worsening, what choices do UK universities have to ride this crisis in the sector?

Here are some of the main strategies that higher education leaders need to consider with urgency and rigour.   

Double down on winning market share for inbound international enrolments

This is still a very valid approach for some, but it is one which requires focused commercial, operational and education execution.   Sales and marketing teams must have a coherent plan of delivery.  In relevant countries, an ongoing investment in targeted promotion is required. This cannot be half-baked, short-term only and it needs to be funded at the right level.  For many source markets, this means rigorous agent selection, close relationship management of those agents and dedicated marketing campaigns to support the network.  The old school approach of exploratory or ad-hoc international officer recruitment trips – with an endless procession of agent meetings and in-office training sessions –  will not cut through in today’s tight, crowded, competitive markets. 

Before the current wave of pessimism in the many parts of the sector, what we regularly heard from higher education providers was their need to grab market share in their key core markets and/or to diversify enrolments through expanding their reach into new markets for their institutions.  But failure to deliver against such objectives was still commonplace, even though rising markets may have previously hidden mediocre performance. Now everyone is more exposed.

Many UK universities have been heavily reliant on one or more of India, China, Pakistan and Nigeria: inevitably as 60% of the total 622,000 non-EU enrolments came from these four source markets in the 2024/25 academic year.  

Many universities are underexposed in South East Asia, Latin America, Sub-Saharan Africa (outside Nigeria) and Central Asia and therefore see these regions as opportunities.  South East Asia is a well-established recruitment region in which many universities are still punching below their weight.**

In South Asia, Nepal has been a boom market,  with enrolments increasing by 92% in the year to 2024/5 to 24,435 but there are still a number of universities which are underperforming against their potential there.

Just as thoroughbred racehorse trainers often know that their equine athletes do not perform to the same level of ability on every track, so university leaders must think carefully about the relevance of their own proposition to each target market. The success of effective market development needs sharp strategic planning, market selection and intelligent activation.

Horses for courses- but some universities are destined to be “also-rans“

Tilt to international undergraduates

Undergraduate students are a sweet spot for international recruiters, with their potential for much higher lifetime revenue returns on marketing investment.  A shrewd choice of markets can be part of the solution here as well. Nepal is an example of a growing undergraduate market and, crucially, one that is reachable faster through education agents’ access to existing demand for UK destination study.  However, in many cases, a coherent direct high school engagement strategy will be required alongside. Selecting the right high schools to focus on and giving decision makers in each school a reason to invest time in the relationship, is likely to be a slower burn, and needs a multi-year approach to the market development plan.

Select carefully from the many available flavours of transnational education

Transnational education received top billing in the UK government’s new international education strategy.  

Whilst some higher education actors have been called deluded, TNE is a rare growth story.  A recent UK Universities report highlights a 9.6% annual growth rate to over 650,000 students in 2023-24, closing in on the number of inbound UK students received in the same year.  In the current academic year, the TNE student volume level, when the data is eventually published, is likely to be higher than the inbound total.  A target of one million TNE students is achievable before 2030.   Countries including India and Saudi Arabia have regulated to encourage in-country ventures.   

But TNE is not a single uniform strategy, it is deployed in several forms with only 6.6% of registered students in 2023-24 studying in-person at overseas campuses of UK institutions.  Collaborative provision – such as joint or dual degrees – covered 42.8% of students.  25.9% of students were registered at partner institutions and 24.8% on distance, flexible or distributed learning programmes.  Over half the registered students were based in Asia.  173 UK higher institutions we involved in TNE, and nine providers taught over 15,000 TNE students each – with The Open University and the University of London leading the field.  China, Sri Lanka, Malaysia, Egypt and Singapore were the top 5 markets, and the 5 fastest-growing markets were Pakistan, Nepal, Kuwait, India and Vietnam.

Senate House, home of the University of London

And there is more to come – as the report covers a period before the branch campuses opened or planned by nine UK universities in India.  Other recent developments include the University of Exeter’s joint institute in Hangzhou with Zhejiang University of Technology.

TNE is evidently a UK export success story and remains an important strategic consideration for universities given the many and varied opportunities to scale it further.

But success is not a straightforward win as there the many failures demonstrate. Research from the Cross-Border Education Research team (C-BERT) reports that almost 1 in 5 branch campuses of universities globally have closed.  Remember the University of Lancashire (then named the University of Central Lancashire) campus in Cyprus or Aberystwyth University in Mauritius?  The universities involved will certainly want to forget those particular misadventures.

Distance and online provision by UK universities has grown but is maturing and is not as fast-growing as the market for in-person provision.  It is also very concentrated in a small number of high volume providers.

For franchised provision, quality control is of paramount importance. Scaling with a focus on quality is essential for the brand reputation of specific institutions and for the sector at large.

Commercially, TNE is not a panacea to counter the problems caused by the UK government’s changes to immigration policy.  Whilst TNE has likely over-taken in-bound student enrolment volumes in the current year, it delivers a much lower average revenue yield per student. The target audience is usually not as affluent. Nevertheless, there are considerable growth opportunities available.  Given the constraints on inbound recruitment, this could well be the era of transnational education as Mark Edwards and Cheryl Yu have claimed.

Mergers, shared services, outsourcing service provision to the private sector

With inbound international revenues at most UK universities declining, one clear strategic response is to create shared services that lower the cost, and improve the efficiency, of international operations.

The merger of the universities of Kent and Greenwich into one “super-university” sets the tone.  Full mergers require significant upheaval, difficult decisions and change management but can bring quick and major benefits to financial performance with reduced senior management and administrative overheads.

One half of a super-university

For some institutions a merger will seem a step too far.   International offices of complementary universities, such as those in the same city or region, could instead pursue shared operations including admissions services, agent management, international marketing and overseas recruitment teams.  Outsourcing different aspects of international service provision to private sector providers is a model which is already well established in many universities and these organisations could also step in to accelerate the provision of shared services.

Some university stakeholders will no doubt object, but the harsh truth is that many institutions are still deploying growth-oriented operating models in a period of sector stagnation or decline, albeit from a record enrolment base.  It would seem remarkable if shared services initiatives did not become more commonplace over the next few years.

Conclusion – is it time to re-think your university?

Perhaps it is the right time to be even more radical.  The current financial pressures faced by the sector is likely to worsen, with 45% of the UK’s universities in deficit in the current academic year.

The university funding model is broken with caps for domestic fees too low, and with previously lucrative inbound international recruitment in retreat from all-time highs. Reaching new audiences through TNE is to be applauded but with the revenue per student substantially lower than for international students studying in the UK, there would need to be very high rates of volume growth to compensate for the inbound declines seen at many higher education providers.

The expansion of universities in the last decade – taking on additional real estate, new campuses, adding to the programme portfolio and staffing levels – has made a shakeout in tougher times inevitable.  Many universities have become bloated, and there is evidence of some chasing volume at the expense of quality – as evidenced in the recent controversy about the dubious promotion by some institutions of Master of Research (MRes) programmes.

Do we need so many universities in the UK?  Have some universities overstepped their remit or attempted to move into areas of programme and service provision that they are not as capable of delivering effectively?  As in any market, if organisations do not take robust action in response to external trends, they will not thrive and some may not even survive.  Clear strategic choices and precise plans for execution are required from the UK’s embattled university leaders.

Footnotes

*This claim of only 31 students seems to be contradicted further down in the article, where it states “Students from Pakistan account for more than half, or 630, of the current intake at the campus”.   As the majority of programmes at the campus are single year full-time postgraduate programmes, the numbers need further scrutiny.

** Of course, these regions are not single homogonous markets but are often talked about as such by university decision makers.

Radio 4’s Start The Week show this week featured Professor Sir Lawrence Freedman, Emeritus Professor of War Studies at King’s College London.   He has a new collection of essays, On Strategists and Strategy, to be published in March.

Freedman defines strategy as what you are trying to do and how you are going to go about doing it.  The problem, he says, is that any strategy requires engagement with human beings who have their own agendas.  When even the most compelling sounding strategy encounters the real world, things rarely happen as planned. 

On the surface, there are many reasons to be positive about the updated international education strategy*, recently published by the UK government.  The education sector is described as a trade priority, its importance to the economy and to brand UK overseas is emphasised. It is also good news that the government is prepared to declare an aggressive and measurable financial goal of £40bn in annual education exports by 2030.  Unfortunately, it is much harder to be confident in its chances of success.

The government acknowledges it is aiming to achieve significant export growth in the context of major policy changes, driven by the political imperative to gain a firmer control of immigration.

Its last strategy published in March 2019 envisaged 600,000 international students hosted in the UK by 2030, a number which was achieved ten years early.

The approach is now very different:

Indeed, as Lawrence Freedman would anticipate, some of the more tangible aspects of the strategy; beyond the warm words on soft power, trust through international engagement and building national reputation; are likely to struggle when people act in response to it.   The rational actions of three groups of people – international students, university leaders and government decision-makers themselves – will pose particular threats to its success.   In fact, we are already starting to see this play out.

International students

Students have an increasing range of choices for their study destination, and several factors are leading many to question the UK’s value relative to other options.  A shorter post-study visa limit under the Graduate Route and ongoing concerns about graduate outcomes are unfavourable for the perception of the UK’s attractiveness, given its high costs of living and study compared to many alternative destinations.   A new annual levy on international students in England of £925, to be introduced in the 2028/9 academic year will not help the sales pitch.

As UK politicians have become tougher on immigration, previous benefits for international students – such as the those on postgraduate taught programmes being able to bring dependents with them – have been withdrawn.  Certain European study destinations, including Germany, with an increasing number of courses in English, lower tuition fees, and attractive post-study work routes, have seen growth.

Happy to study in Germany instead?

In the UK it is difficult to see how softening demand for in-person study, which makes up the bulk of current international education export revenues, can be sufficiently counteracted by the expansion of other student services.  Whilst growing strongly in volume, and with universities continuing to invest in TNE provision, revenue per student for TNE is considerably lower. 

University leaders

Sustainable recruitment of incoming international students and driving export growth through transnational education (TNE) are two core components of the new international education strategy.  Both have major weaknesses when considered through the lens of flawed attempts by some university leaders to grab market share.

Several university decision-makers have rationally taken advantage of the fact that restrictions to dependent visas are not applicable to master’s by research (MRes) courses.  As reported in Times Higher Education, a tripling of international enrolments on MRes programmes in 2024-25, against the prior year, is led by some lower-ranked universities who are highly exposed to the shifts in student demand for postgraduate taught programmes since the regulations changed: including University of Greater Manchester (increasing from 50 in 23/24 to 915 in 24/25), University of Lancashire (140 to 850), University of Wolverhampton (5 to 770), University of Gloucestershire (5 to 730), and York St. John 90 to 190).

Boom time for the University of Wolverhampton’s MRes student numbers

Whilst in the current rules, and therefore a legitimate approach to international student recruitment, debate rages as to whether the MRes enterprise is damaging to the sector.  Certainly the Home Office thinks so, threatening action against it.   It can be a valid and valuable part of a university’s programme portfolio – indeed Imperial College, UCL, University of Cambridge and University of Oxford all recruit international students to MRes programmes.  But the ramp up in the promotion of MRes at less prestigious institutions by some education agents is a world away from the sustainable approach to international student recruitment defined in the strategy.  MRes has been positioned by some agents as an easy entry option and a workaround to current visa rules, enabling dependents of students on these programmes to secure visas. The actions of some university leaders is likely to bring tighter regulation and scrutiny, and increase costs of recruitment.  The perception is that the sector cannot be trusted to police itself.

Meanwhile, the government’s favoured export growth strategy of TNE has also been called into question with Adam Habib, vice-chancellor of SOAS University of London, calling some universities “deluded” – as also reported by Times Higher Education.   His comments are focused on whether universities with financial difficulties can solve their problems by opening campuses in India, observing that 5 of the British 10 universities currently pursuing this strategy are running deficits: “If they think they’re going to make their money in India in the short term to cross-subsidise, I think they’re very, very deluded about the Indian marketplace.”

Further appetite for TNE investments are likely to be constrained unless these first major ventures are successful.

It is easy to agree with Habib’s criticism of the international education strategy: the government wants to boost UK exports but only if less students are turning up in the country.

Some universities may make a success of TNE.  All MRes programmes are not evil. But given the perilous state of institutional finances, their executive officers are, in  many cases, acting with an air of desperation.  The rapid expansion of cost bases during the boom times have created a deadweight in today’s market.  New revenue streams are needed, but TNE and MRes expansion should come with a health warning.

Government decision-makers

In its new strategy, the government talks at length about it support for the expansion of international education, through bodies such as the Department for Business and Trade and the British Council. At the same time, cuts to these organisations are threatened.   This is a clear case of a strategy being undermined from within.

As David Pilsbury, chief development officer at Oxford International Education Group, is quoted as saying about the higher education sector: “the reality is that we are on our own”.                                     

Conclusion

Success of a strategy relies on alignment of execution, which in turn heavily depends on how effectively those involved in delivering are able to anticipate and adapt to the actions of others.  The government’s new strategy looks great when presented in a glossy manifesto. But it is unlikely to succeed when its key audiences, stakeholders and its own funding approach are pushing in opposing directions.

This begs the question that if the sector is on its own, what should its strategy be to thrive in the future?  A topic I’ll return to in the coming weeks.

The 40 Bills put forward tackle some vital topics under a theme of national renewal.  Bills within categories of economic stability and growth, security, health, energy policy, social cohesion, and opportunity for all make the agenda ambitious and wide-ranging. 

Legislation covering the UK’s many challenges is not deliverable in one Westminster sitting. The government is keen to stress that this is only a starting point.  But for higher education leaders, it is concerning that the sector’s long-running funding crisis does not make the hitlist.  This anxiety was amplified by comments made by the new education secretary Bridget Phillipson.   She told BBC Radio 4 that the government has no plans to raise the tuition fee cap for domestic students, nor to give more public money to universities.  

New education secretary, the same HE funding issues to tackle

Higher education financing is a very tough problem to fix, especially when the government weighs its options against student cost-of-living concerns and the overall state of the public purse.  It cannot be solved quickly.  Yet with some UK universities on the brink of collapse, a further delay to tackling the issue could have severe consequences for the most vulnerable institutions.

Previous governments have kicked the problem down the road.  Such a strategy is not sustainable.  Whilst there are no easy or fast wins, the government must allocate resources and get stuck into the complexity of understanding its choices.  Domestic tuition fees must surely be allowed to rise to levels that at least support the cost of course delivery.

The alternative is to let already stressed the universities go under, and deal with the damage caused by job losses, the impact on local economies, and on the students themselves.  Mergers and course cuts are options already being considered by institutions, according to The Sunday Times.  Many universities do need to get their finances under control.  But if market and inflationary forces impact on the cost side of the equation, then a rational market response to fair pricing and revenue must also be permitted.

With home tuition fees and an increase in state funding off limits for the foreseeable future, international students and their uncapped fees, are likely to be one of the only revenue generating answers in the short term.  Phillipson, back on BBC Radio 4 for the Today programme, recently underlined the government’s support for retaining the Graduate Route.

This will be welcome news for universities and under pressure international offices.  With other key English speaking study destinations, notably Canada and Australia, also facing challenges with recently introduced restrictions to international student flows, the UK should benefit through a relatively benign approach to the topic from the new government.  Prospective students will see that the UK is still open for post-study work opportunities which were considered at high risk under the previous Conservative regime, bringing uncertainty.

However welcome, the reinforcement of a policy already in place does not signal a return to the record levels of international student volumes seen prior to the curtailing of visas for the dependants of students on postgraduate taught courses, which came into effect in January 2024.

International student numbers could see an imminent upturn, but the deeper funding crisis within the higher education sector is a much tougher problem in need of thorough analysis, and the development of detailed root and branch solutions.

‘There is an asymmetry in public life. If you err on the side of optimism, it can dog you forever. Ask Francis Fukuyama. Erring the other way incurs much less cost. Ask . . . well, whom? Who is the reference point for incorrect pessimism? If a name doesn’t occur, it’s because we tend to let these things go.’

The International Education was reminded of Ganesh’s words this week, when the Migration Advisory Committee (MAC) returned with its Rapid review of the Graduate route,  commissioned by the UK Home Secretary, James Cleverley.  Many in the higher education sector, still reeling from the ban on dependant visas which has led to a sharp decline in recruitment for taught postgraduate programmes from key source markets, expected the worst.   Predictions focused on how far the MAC would go in recommending restrictions to the Graduate route, which enables international students to seek work in the UK for up to 2 years after the successful completion of a university degree.   The best to be hoped for, some believed, was that the post study work visa would not be scrapped altogether. 

An age of uncertainty

These fears were not without foundation.  The MAC had previously expressed concerns about the post study work visa, before its reintroduction by Boris Johnson’s government in 2019, ‘due to concerns that it would lead to an increase in low-wage migration and universities marketing themselves on post-study employment potential rather than educational quality.’

The evidence that the MAC highlighted back in 2018 was that the earnings of international graduates were substantially lower than those of domestic graduates, one year after study.  As recently as December 2023,  the MAC annual report stated:

‘Our concern that the graduate visa would incentivise demand for short Master’s degrees based on the temporary right to work in the UK, rather than primarily on the value of qualification, may well be borne out in the trends that we have observed. As we have already shown, the rise in student numbers is almost entirely focused on taught Master’s degrees, and the growth has been fastest in less selective and lower cost universities.’

But when the MAC’s rapid review was released, it was unequivocal in its core finding and recommendation:

‘The Graduate route has broadly achieved, and continues to achieve, the objectives set by this government. We therefore recommend that the route remains in place in its current form.

We found no evidence of any significant abuse of the Graduate route. By abuse we mean deliberate non- compliance with immigration rules.’

This did not stop the right wing of the UK’s governing Conservative Party questioning the MAC’s findings.  Robert Jenrick and Neil O’Brien criticised the government for setting the wrong parameters for the review.   Jenrick wrote on X ‘If you order white paint, you get a whitewash.’

Robert Jenrick: preparing for the Tories’ era in the political wilderness

Prime Minister Rishi Sunak is reported to want to push ahead with restrictions to the Graduate route.   International students remain part of the net migration figures which his government has pledged to reduce, despite the majority of them returning to their home countries after graduation. Instead of euphoria, or even mild relief, the realisation that the MAC review may simply be ignored, brought the pessimists back to the fore.  After all, this is a government set on pursuing its bizarre and ill-informed policy to send asylum seekers to Rwanda for the sake of looking tough on immigration. What hope for a common sense approach to international education?

Barring an unprecedented turnaround, it is a government that will not even be in power by February next year.   Indeed, at least 64 of its MPs will resign their seats at the next election, and many of its ministers are reported to be looking for new jobs, in anticipation of a rout.   

Yet there are some reasons for optimism.  The chancellor, Jeremy Hunt, gave some glimmers of hope when he said that the government will “continue to support sustainable increases in international students coming to the UK.”  At the same time, he defended the ban on dependants.

Big business has also been quick off the mark to support the MAC’s views, with the leaders of Anglo American, Rio Tinto and Siemens writing to the prime minister to urge him not to make any changes to the Graduate route, citing the threats to the UK’s competitive edge, and the further weakening of finances of the university sector, damaging its resources for research and engagement with industry.

The UK is not the only key destination country whose international higher education sector is facing profound changes to its operating environment.  This month, Australia has published a draft International Education and Skills Strategic Framework, placing an emphasis on quality, integrity, and sustainable growth.  A bill has been put forward to enable the government to put ‘soft caps’ on inbound international student flows by limiting numbers at individual institutions.  Canada  has previously implemented a cap in numbers, in order to achieve net zero growth, driven by a lower rate of approval for study permit applications.

On behalf of a beleaguered UK higher education sector, Vivienne Stern, Chief Executive of Universities UK, called for stability in policy.    In Australia and Canada, there are at least clear directions being pursued, despite the challenges faced by those countries’ institutions in the short term.

The emphasis of the MAC on high quality enrolment practices, and an improved governance  of universities’ relationships with agents to achieve them, is to be welcomed.  But when a government simultaneously pursues a goal of increasing international student numbers, and associated export revenues, whilst making sudden and dramatic changes to stymie that growth, there are significant questions to be asked about its competence.  Is this a flagship sector to be proud of, or one to damage at the whim of ministers desperately fighting to cling on to power, increasingly out-of-touch with reality, in the last days of a tired government?

Combined with a complete lack of vision for how one of the UK’s most important national assets should be financed, there are thousands of people across the higher education sector who are highly optimistic about how the results of the  next general election will play out. Less certain is what the Labour Party’s future plans are for universities, and the level of international student flows that they will deem to be acceptable.

It has been a torrid few weeks for UK higher education institutions, and especially for those involved in international activities.  On November 23^rd, the Office for National Statistics estimated that net migration in the calendar year of 2022 had reached 745,000, up from its previous figure of 606,000.  Its further estimate that this has slowed to (a less widely reported) 672,000 for the 12 months to June 2023 did not bring any comfort. Then on 4^th December, the government announced measures aimed at reducing immigration by 300,000.  This included a significant increase to the minimum salary level at which skilled workers can obtain a visa. Hardly helpful to HEIs. But it did not, for the timebeing anyway, incorporate any further direct changes to rules relating to visas issued under the study route. 

The government had previously legislated to prevent dependants of international students on taught graduate courses from accompanying them to the UK, effective from January 2024.  This announcement, in the summer, is widely credited with creating a peak in applications in the Autumn 2023 intake (although conversion outcomes are reported to have been mixed), before the rule change, then causing a major slowdown in projected international enrolments at post-1992 universities for 2024 intakes.

Crossfire hurricane

In December, the Tories have been beset by more factional infighting, the resignation of immigration minister Robert Jenrick (he was replaced by two ministers: with respective briefs for legal and illegal immigration) and heated arguments, led by the prime minister, Rishi Sunak (pictured below), about whether the UK can legally send asylum seekers to be processed in Rwanda.   If only the same energy and resources had been dedicated to processing the 175,000-strong backlog of asylum seekers reported by the Home Office in August.

This hurricane of incompetence on a grand scale, a political party at war with itself, and the inevitable lack of certainty about the real impact of its latest measures, brings us to a situation where the government is actively looking for even more ways to bring down the net migration numbers.  745,000 less 300,000 (if that goal is fulfilled) still leaves at least 445,000 reasons that the government may feel the need to act to reduce immigration faster.  In the process of desperately trying to appeal to its own backbenchers in the Houses of Parliament, and to an electorate which the evidence suggests is actually becoming less concerned about the topic, UK higher education is likely to be caught in the crossfire.

Migration Advisory Committee report

Enter the Migration Advisory Committee (MAC) which has just published its annual report, and has also been asked to review the graduate visa route that currently enables international scholars, granted a student visa, to stay in the UK for a further 2 years after completing their degree.  This will get university Vice Chancellors, and the wider UK international education industry, even more nervous about the future financial outlook.   Many are already at crisis point: Coventry University reported this week that it will make close to £100m of cuts to expenditure over the next two years, after its income is projected to miss budget by £85m in the year to July 2024.

Rising like a phoenix from the flames?

The MAC annual report outlines the arguments that will play out in the coming weeks.  The role of the MAC is to advise the government on policy, not to decide it. But the report contains some clear pointers to the debate to come.

1. Yes, the government did have an explicit policy to increase international student numbers to 600,000 by 2030, achieving its goal a decade early.  With universities losing money on undergraduate domestic students, and with fees frozen at a time of high inflation, international student revenues have helped keep many higher education institutions afloat, as well as being a major export earner for the UK economy as a whole.
2. There have been some unintended consequences of this success, with the rise of those on dependant visas, driven by Nigeria and India which accounted for 73% of dependants in 2022.  This is a problem for the positive story of inbound student arrivals, as dependants do not pay any fees to universities and also, arguably, place extra demand on housing stock and public services.  Hence the dependant restrictions about to be implemented.
3. The MAC believes that the concerns it expressed in its 2018 annual report, that ‘a post-study work regime could become a pre-work study regime’ is supported by the latest data. The committee’s view is that the universities are not competing on the quality of their programmes, but have been able to market themselves as a cost-effective way of entering the UK to work. The 2023 annual report states that: ‘the rise in student numbers is almost entirely focused on taught Master’s degrees, and the growth has been fastest in less selective and lower cost universities. The rise in the share of dependants is also consistent with this. Since both the applicant and an adult dependant can work both during the original study period (students can work up to 20 hours per week during term and full-time outside term), and for 2 years on the graduate visa, the cost-benefit of enrolling in a degree has changed substantially.’
4. And when such international graduates enter work, many are doing so on very low salaries. A high proportion of them earn less than the current £26,200 minimum (before its increase to £38,700) of the skilled worker route during their first full year after graduation.  The report states that ‘the lower quartile of non-EU Master’s students experience minimal wage progression up to 5 years after graduation, suggesting they are more likely to remain in low-skilled jobs post-study.’ 

These findings do not build a credible case that the graduate visa route is predicated on encouraging the employment of skilled workers who add value to the UK economy.  Rather the opposite.  

Such opinions make it likely that a future policy recommendation could introduce a threshold minimum salary level to enable qualification for the graduate visa route, a decision that would disproportionately impact the finances of post-1992 universities.

Much of the language used by the Migration Advisory Committee, seems to infer a strong bias towards research-intensive universities and neglects the contribution that modern universities can bring to their local communities, and local employers, for which they need the fee income provided by international students.  Indeed, all five committee members are academics in elite Russell Group universities.

Welcoming international students to the UK

The importance of keeping the graduate route intact

The other side of the argument is put forcibly by former universities minister, Jo Johnson in a recent opinion piece in the Financial Times.  He writes that ‘any move now to axe or make the graduate route less attractive would risk tipping many universities into deficit, reduce the country’s soft power and hit an export sector that contributes more than £41bn a year to the economy’ and that ‘the post-study work offer is table stakes for the UK’s ability to attract globally mobile students at a time of intense competition from the US, Canada, Australia and other, non-anglophone markets.’

He argues that any review of the graduate route should focus on addressing abuses of the current system, rather than on making fundamental changes to the policy itself.  Johnson advocates application fees, higher tuition deposits, and the requirement to deposit the mandatory minimum maintenance funds in an interest-bearing escrow account as three possible ways for the sector to ensure that it gains political backing for the graduate route to continue.

Survival of the fittest

Aside from lobbying the government about the impact on university finances, and adopting such measures that reassure politicians that universities have got their quality control in order, how else can HEIs respond to an overall reduction in demand from international source markets?  In early 2024, many will be nursing severe hangovers caused by institutional complacency as international student numbers rose and made everyone look good.  Faced with the new realities, an intensive fitness regime for the new year is prescribed.

1. Measure graduate outcomes, leverage industry networks, engage with alumni

Institutions that claim to be focused on the career outcomes of their graduates need to walk the talk. A starting point is to track, and publish data on, the career progression of international alumni.  On the back of insights over time, institutions will be able to invest smartly in delivering impactful outcomes through relevant course content, and in making connections to prospective employers. Some universities seem to view the end of a differentiated international student journey as enrolment and the receipt of tuition fees, instead of tailoring their offer to the needs of international students throughout, and beyond, the degree programme.

2. Work with credible recruiters and agents, focusing on commercial performance and compliance

The effectiveness and capabilities of many international recruitment and marketing teams, and the management of their agent networks, is still not good enough compared to what the UK industry needs to compete sustainably with alternative destinations.  It is easy to do well in rising markets, now we will see how strong these international teams really are.    Identifying, attracting, developing, and retaining commercially-minded team members, and performance managing a network of education agents with sufficient global or regional reach is essential to future success.  Alongside this, recruiters must also pay close attention to admissions and compliance processes, ensuring that students entering the institution are legitimate and motivated to complete the course. There should not be any contradiction between the targeting of commercial outcomes and ensuring that stakeholders, including the government and public, have confidence in the enterprise.

3. Managing the pipeline of prospective students to improve efficiency and conversion outcomes, integrating technology solutions to improve enrolment services and speed up response times

Many university admissions processes are still reliant on manual processes, and the reactivity and response times of individual team members.  Service levels vary enormously between institutions, and are often unacceptably slow. Financial success in coming years will largely depend on how well operational processes are managed, and innovation through the adoption of new technologies, including artificial intelligence, to improve admission decision-making and the customer experience, in order to gain an edge.  Universities should consider collaborating with private sector education and service providers more closely on many aspects of their enrolment process for international students. The universities that become good at this, will win market share in a time of likely turmoil for the sector.

Conclusion

The UK government should pursue policies that keep the financial prosperity of universities, and the UK’s international education sector, at the forefront of their priorities.  Nevertheless, universities have a key role to play in reassuring the public and policy makers, that they will not tolerate any abuses in the current visa system.

Quality control measures for the recruitment and admissions process, of the type recommended by Jo Johnson, may well play a part.  Also important is a full understanding of graduate outcomes, and a focus on improving them. Enhanced commercial and operational capabilities are essential to the delivery of both a competitive edge and of quality assurance.

Commercial, compliance, academic and student outcomes are closely aligned imperatives. University management teams need to realise this and develop their teams with a long-term plan, and with an investment approach that is fully coherent, and orientated towards international student success, across all parts of the institution. How each university approaches the challenge ahead will determine the sector’s winners and losers in 2024 and beyond.

Top ranking?

Rankings – league tables of universities – can be a flawed indicator for international students making their most significant education choice. The Higher Education institutions (HEIs) which appear at, or near, the top of them, are undoubtedly the heavyweights of the sector. They have a world-leading research impact.  Those students academically smart or fortunate enough to attend one of them traditionally enjoy advantages in the job market relative to graduates from lower-ranked alternatives.  Attendance at one of the top tier universities is a quality signal for many employers, even when the degree subject studied has no direct relationship with the content of the job.  And whilst much essential information about the student experience, value for money, or relative career success, is missing from some prominent ranking tables, students, and parents in many international source markets, find it hard to look beyond them.

From a university marketers’ perspective rankings are either a curse or a blessing, depending on where their HEI is ranked. It is an easier gig to promote Stanford University internationally than it is to promote the University of Staffordshire. Annual movements, upwards and downwards, within the middle of the table, can be significant from year to year. The universities of Chichester and Stirling are equal 53^rd in the 2024 UK University rankings recently published by The Times.  Last year they were 28 places apart at 66^th and 38^th respectively.  Do such big changes evidence any real shifts in quality?

The international playbook

This is an international marketers’ opportunity that goes way beyond the promotion and marketing communications which are the mainstay of many university international teams and, instead, requires a fully transversal Marketing approach.  Making a brand promise that is style over substance, or developing a great written value proposition for a specific part of programme portfolio lacks credibility unless there is a complete focus on delivering tangible benefits for international students.

1. Relevant programmes

Growth industries require an evolving skills base to serve the fast-changing needs of a global audience.  Green technology, artificial intelligence (AI), robotics, cyber security, and personalised medicine are some topical examples that build on core departmental strengths found in some of the so-called lower ranked institutions. Businesses the world over require practical expertise in data analysis and digital marketing.  Art and design, a subject which shines at many less storied UK universities, remains a desirable career path for many international students. Automotive engineering programmes are evolving to embrace the new technologies required to drive further growth in the global market for electronic vehicles.

The opportunity to build and amplify specialisms in the product portfolio – to stay relevant to industry and attract an international audience to a centre of excellence – is considerable.

Niche, super-focused providers meet the needs of growth industries such as hospitality and tourism – think Swiss-based hospitality schools – and the global sports industry – think the University Campus of Football Business (UCFB) and its Global Institute of Sport (GIS). However, broader-based universities have the additional advantage of being able to leverage a wider portfolio, featuring a range of programme strengths. Through a cross-disciplinary approach, post-1992 universities can borrow the expertise of other departments, close to the latest trends in cutting edge topics such as green tech or AI, and can differentiate their offering in mainstream, higher volume subjects such as business and management.

Researching industry and student demand in high potential source markets is fundamental to driving successful programme development for an international audience and focusing the senior leadership team on what their specific university is famous for, relative to its peers. The focus should be on quality and depth in a few internationally marketable subject areas, rather than trying to be everything to everyone, everywhere.  University departments that may normally operate quite independently must be incentivised to collaborate where advantageous to students and the needs of international employers, rather than being allowed to operate in their traditional silos. 

2. Employer relations

If relevant and market-leading programmes exist, especially in important specialisms, the motivation of companies and industries to identify and source international talent from an institution will increase.  Making close connections with a small number of large-scale, global employers with a presence in target source markets, will create opportunities for graduates and alumni and iteratively inform future programme content.  Such a strategy requires access to the connections of academics and the resourcing of dedicated roles that will seek out and engage with partner employers.

3. Alumni engagement

Investment in international alumni engagement is an afterthought in many universities.  It is clear, that a strong network of international alumni, no matter how modest in scale at the outset, brings opportunities to build a meaningful brand position in target source markets. It enables engagement with industry and encourages word-of-mouth referrals of prospective new students.  The alumni engagement team is a critical cog in the wheel of international market development and should be given a place at the top table of strategic decision-making.

4. Evidenced career pathways

It is not possible to understand international graduate outcomes and career paths without measuring them rigorously.  Universities need to build an evidence base to show that they drive value for international students in the job market. Testimonials are an important part of the international marketing communications toolkit but validated data, tracked over time, informs the development of a sustainable international strategy because it shines a light on what is really happening with graduate careers. 

Keeping it real

A recent report published by the Conversation examines the plight of international students in Australia.  Its main argument is that whilst they can readily receive a long duration post-study visa to stay in the country, large numbers of them are struggling to find employment appropriate to their degrees. Many of them are working in low-skilled jobs, only half are in full-time employment, and a reduced number of temporary graduate visa holders – one third, down from two thirds in 2014 – are transitioning to permanent residency when their visa expires.

The article underlines the need to match promise with reality when it comes to the marketing claims of career outcomes for international students.

Lessons from domestic life

For the audience of domestic students, there are strong case studies to celebrate for rankings-challenged HEIs.  Whilst the real-world outlook for post-study work opportunities in a study destination can change with the whims of the latest government policy, building on heritage and staying fully relevant to industry is a transferrable lesson when serving the international audience.

In a recent article for UK newspaper The Times, Emma Duncan wrote that it’s the post-1992 universities that are leading the way in the delivery of relevant, career-focused programmes to the right audiences.  Nottingham Trent University is highlighted as a success story – its 40,000 students making it the UK’s fifth biggest university.  Faculties such as computing are meeting the needs of students and employers in the region, since computer game design is one of the local region’s biggest industries.  London South Bank University has also grown rapidly in size and, Duncan writes, ‘half of the courses it offers are accredited by professional bodies.’ 

The University of East London, is celebrating its 125^th anniversary this year.  Founded in 1898 as the West Ham Technical Institute, its mission from the start was to deliver education focused on the needs of industry.  Success for such universities is not focused on rankings based on citations and academic research – the University of East London is currently ranked 131^st (last place) by the Times. Its ethos is driven not by rankings, but by relevance to industry and job placements during and after a programme of study.

International strategy

Yes, most of today’s student beneficiaries from these close industry connections are domestic. Current UK Government policy unfortunately brings some constraints, as we covered in a previous post.  But given the financial imperatives to recruit a cohort of international students with their higher fees, there are already the foundations of an authentic story to build on that can, with focus, resourcing, and expertise, be transferrable to international marketing strategy.

The pathways to relevant career opportunities must be real and they must be evidenced. Then universities in the squeezed-middle and wide-base of the rankings pyramid will have an opportunity to finally transcend the constraints of their nominal league position, in the source markets where many of them currently struggle, enabling them to flourish on the international stage.

As set out in its International Education Strategy (IES): global potential, global growth plan in March 2019, The UK Government has significant ambitions for education exports and inbound student numbers. Whilst its 2030 targets of £35bn in education exports and 600,000 overseas students hosted in the UK also include the full range of services – early years, schools, edtech, vocational, english language training etc – higher education makes up the most significant proportion of these headline value and volume metrics.

A great deal of success is already claimed for the IES: close to 680,000 overseas students in 2021-22 and an estimated £25.6bn in education exports and transnational education activity in 2020, despite the pandemic disruption. Higher education represents over 75% of this revenue base and remains the main growth engine. The UK Government and its international education champion, Professor Sir Steve Smith, continues to actively promote the UK through its ‘key growth markets’ of India, Nigeria, Vietnam, Indonesia, and Saudi Arabia. So far so good?

In assessing the competitive outlook for UK higher education on the international stage, consider the macro factors that influence inbound international student demand, the core revenue driver, relative to the UK’s major English-speaking competitor destinations of the USA, Canada, and Australia. Put aside the important factors of academic and institutional reputation, cultural ties, and geographical proximity, which are either very difficult or impossible to influence before 2030.

We are left with:

1) visa and immigration policy

2) economic and affordability factors – including the cost of education, perceived value for money and return on investment

3) student outcomes, especially employability

(Yes, there are other influences in play, such as the perception of the current safety, security and living standards of the destination country, but these are less straightforward to make policy decisions on in a way that has a direct near-term impact on the UK’s attractiveness to international students).

So how well is the UK positioned in these three areas?

1. Visa and immigration policy

One of the 5 main actions committed to in the IES is to:

‘Continue to provide a welcoming environment for international students and develop an increasingly competitive offer. This includes extending the post-study leave period, considering where the visa process could be improved; supporting employment; and ensuring existing and prospective students continue to feel welcome.’

The re-introduction of the 2-year postgraduation work visa in 2021 is credited, along the post-pandemic recovery, with creating rising demand from international students. Yet in order to reduce the level of its politically divisive net migration statistics, the government announced in May 2023 that from January 2024, dependants of overseas students will be prohibited from joining family members during their period of study unless the student visa is issued for a postgraduate research programme. 136,000 visas were issued to dependants of international students in 2022, and the changes are forecast to heavily impact demand and student inflows for taught master’s programs, from India and Nigeria in particular.

Increased fees for visa processing, the immigration health surcharge (IHS), and dependant visas (where still available) will be further hurdles once introduced for applicants for 2024 onwards. As the incumbent Conservative government positions itself for the UK’s next general election, taking tough action to deliver its (widely criticised) net migration targets are likely to supersede IES priorities.

2. Economic factors

With UK inflation still running ahead of many other OECD countries, living costs for all students are becoming much higher. With sterling certainly no weaker over the last 2 years against the currencies of the five focus countries referenced above, except for Saudi Arabia, affordability for many prospective international students is a challenge in this inflationary context. The crash of the Nigerian naira following the country’s abandonment of its long-standing currency peg against the US dollar will have impacted the cost of other destination countries as well, but unlike the UK the major competitors are less exposed to West Africa.

In a new report from a UK think tank, the Higher Education Policy Institute (HEPI), Josh Freeman presents research on how higher education institutions are supporting students hit by the cost-of-living crisis. The report states that: ‘concerns have been raised about international students, who sometimes arrive in the UK without enough money to fund their study and are limited by law to working no more than 20 hours a week during term time.’ It also underlines the lack of hardship funds available to them.

A tight market for student housing exists in many important university cities, including Manchester, Bristol, and Glasgow. Supply has struggled to keep up with demand. Demand from domestic students is set to increase in the next few years due to the demographic rise in the number of 18-year-olds, peaking in 2030. If more international students are to be welcomed to the UK, problems of accommodation availability must be factored into local and national strategies.

There is no overnight solution for tackling a country’s inflationary problems, although it is also argued below that international students are part of the solution to the UK’s productivity issues. Currency valuations are notoriously unpredictable. It is obvious that everyone who wants to cannot afford to study in the UK, and that there is insufficient capacity anyway. However, the government and HE providers can do much more, and more immediately, on the value for money/return on investment side of the equation. This brings us on to the question of what value the higher education sector delivers to students’ employment prospects and their future careers paths?

3. Student outcomes

That universities have limited data available on the career outcomes for international graduates is a subject often covered in-depth by Alan Preece in his entertaining and informative blog, A View from a Bridge and also by Louise Nicol of Asia Careers Group. Prospects for employment are undoubtedly a key driver of international student choice, and therefore a factor in the relative competitive advantage of an institution or a country.

A report in the PIE News highlights the Netherlands as a study destination where 32% of international students graduating from the 2018-19 cohort were employed in the country one year later. This was a substantial increase from the level of 20% seen previously. Nevertheless, the political backlash against the growing number of international HE students in the Netherlands (123,000 in 2022-23) may well reverse this trend, with the number of programmes taught in English being targeted for a cull.

If the UK and its universities want to remain competitive for international student recruitment, as defined in the IES, the sector needs to have visibility of student employment data and use insight from it to inform its future strategy. Universities should also invest more heavily in their international alumni engagement teams to better connect past and current graduates, creating opportunities for networking, investment, and employment.

Policy imperatives

The House of Lords Industry and Regulators Committee last week stated that many universities’ increasing reliance on international student fees, is a risk for the sector. The former Secretary of State for Education, Charles Clarke, questioned the sustainability of this approach as ‘countries around the world are building strong, world-class universities themselves,’ eroding one of the UK’s main competitive advantages, based in part on its past reputation. Exposure to China, with a reduced number of inbound students, is a particular vulnerability for UK providers. The committee highlighted a complacency in the sector in the face of such risks.

Rejoining Horizon Europe as an associate member, after years of stand-off with the European Union, is an unequivocally good news story for the UK and will bolster the finances of its leading research universities. But for the much larger number of UK universities that rely more heavily on student tuition fees, what are the policy solutions in the pipeline?

An insightful report entitled Passport to Progress: A Blueprint for the World’s Most Pro-Innovation Visa System, published by the Entrepreneurs’ Network is timely. With recommendations for improving migration systems, it examines students as one of five ‘groups’ of immigrants essential for economic growth and innovation (the others are high-skilled professionals, STEM practioners, other ‘unusually talented individuals’ and entrepreneurs).

The author, Derin Koçer, makes several important recommendations for student visa and immigration policy, amongst which are:

• Get rid of the sponsorship requirement for employers of international graduates, which will encourage more smaller businesses to recruit them
• Exclude such graduates from migration caps, in recognition of their value to the host country
• Redesign student visas so that the system puts international students on the path to residency

The battle for international talent is of critical importance to the future health of any country. The UK has a significant productivity problem, in part due to its ageing population, which stymies its economic growth prospects. Voluntary, skilled immigration fuels dynamic companies, enterprise, and innovation. Not all international students will stay on after graduation, but encouraging a clear route to the workforce, or to starting a business, under a clear set of regulations, will bring benefits to all citizens. If the UK is to play a role in the major industries of tomorrow, (artificial intelligence, green technology or another high-growth sector), it must bolster the number of its STEM graduates, of both domestic and international origin.

Conclusion

Many countries are on a non-linear journey in their strategy for welcoming international students. As well as in the Netherlands, even politicians in Canada are now questioning the ‘open border’ policies of recent years due to the current pressure on housing stock in the big cities that attract the largest student inflows. Despite its internal party-political issues in relation to immigration, The UK Government needs to see the bigger picture, and not simply think of international students as a solution to propping up the finances of universities.

HE providers, and government must work together to keep the UK’s education sector competitive. Welcoming international students with a robust plan behind delivering value to them, through a progressive immigration policy, and with a focus on graduate outcomes, is not just important for current export targets. It is an essential driver of the country’s future economic success.