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The value of students to the UK economy

The value of students to the UK economy

Undoubtedly, university students are of significant value to the UK economy at local, regional and national level. A report from the Higher Education Policy Institute¹ (HEPI) highlighted that international students boost the UK economy by over £20billion. Fortunately, the 2018 intake saw an 8% increase in international applications compared to 2017.

The economic benefits generated by international students, through spending primarily on living expenses and tuition fees, far outweigh the estimated £2.3billion costs to host the students. The research conducted by HEPI is the first of its kind to consider the costs of hosting overseas students, which include strain on public services and lack of loan repayments, when determining the benefits these students offer the UK economy.

Alongside accommodation and tuition fees, international student spending outside of campus covers a variety of goods and services, including spending within the retail and transport industries. Such spending has produced huge benefits across the UK, not solely limited to London which has the greatest share of international students, but also through supporting local and regional business within smaller towns.

International students not only provide financial benefits for the UK economy, but offer diversity to communities and opportunities for international research collaborations. The importance of international students is further accentuated by the fact that the world university rankings are partially (5%) based on the international-to-domestic student ratio. The benefits that international students provide for the UK economy emphasise the importance of ensuring that the UK remains an attractive option for overseas students.

The unclear impact of Brexit on international students might cast a cloud over the appeal of UK universities to these students. The uncertainty surrounding tuition fees and visa allocations following Brexit poses a threat to the number of international applications made to UK universities.

Although the point has been raised that the deal might not directly influence the students who are now and those who will soon be regarded as ‘international’, the unanswered questions still raise skepticism about the advantages of Brexit.

It might be that Brexit will cause an increase in tuition fees for European students, who will be considered how non-EU students are at present. This sense of unease is unlikely to be attractive to potential international students looking to study abroad, and is likely to cause the UK difficulty in their efforts to retain a strong stance in welcoming these students.

Aside from the enormous contribution of international students to the UK economy, according to recent research the economy would also benefit from more individuals of all ages going to university. The continuous developments in technology call for an urgent upgrade of skills across all ages, to enable the economy to flourish by boosting productivity and innovation.

The inability of our ageing population to keep up with technological advances becomes a risk for any businesses within the economy looking to operate with the most up-to-date technology. Arguably the shortage of skills acts as a hinderance for the growth of the UK economy, once again demonstrating the value of students to the UK economy.

The gradual decline in mature student applications to university, which in turn contributed to the overall decline of university applications by 2%, emphasised the need for the government to more specifically target mature students’ requirements. Explanations for the drop in applications might include the lack of opportunities for part-time and flexible learning for mature students, in addition to huge upfront costs. These are factors that need to be addressed by the government to ensure prosperity for the UK economy, through incentivising mature-age students to enrol in study.

Ultimately, the significant contributions that international students make to the economy highlight the necessity to ensure that the UK remains an attractive option for these students, which might be proven challenging in light of the uncertainty of Brexit. Additionally, fewer mature-age student applications might slow economic growth in the UK, as a significant proportion of the population might not gain the skills required to effectively deal with continual technological developments within businesses.

It is worth noting that this blog only draws on some of the potential contributions that students make to the success of the UK economy. The factors mentioned highlight the importance of higher education institutions in securing economic prosperity in the UK, further demonstrating that the value of students to the UK economy need not be taken for granted.

How will Explain Market Research help your university to prosper?

Universities across the UK will benefit from gaining insight into the thoughts and experiences of present and past university students, in addition to the demands of prospective students. The positive financial and social influences created by students to local economies across the UK, in addition to the university rankings, are attractive offerings for prospective students.

The role of universities within the UK is vital in ensuring the retention and attainment of students to not only help boost their own rankings but to in turn drive economic growth. Student engagement is crucial to allow these universities to identify what it really is that appeals to their past, present and prospective student base, both internationally and domestically.

From an independent perspective, Explain Market Research can uncover actionable insights to help understand the expectations of their student journey and to try to combat potential underlying concerns that might be influencing decisions to attend university.

Our team at Explain Market Research are experts at putting in place research programmes to deliver against the changing needs of the sector.

Contact us today to find out how we could support you and get in touch with our team to understand more about the solutions we can provide.