International students who began higher education in the UK in 2024/25 are expected to generate a net economic benefit of £40.4 billion over the course of their studies, with every 10 students contributing around £1 million to the UK economy.
Published by the Higher Education Policy Institute (HEPI) and Kaplan International Pathways and produced by London Economics, the report estimates that the 404,500 international students who enrolled in UK higher education in 2024/25 will generate £45.1bn in economic benefits while costing the public purse an estimated £4.7bn – a benefit-to-cost ratio of 9.7 to one.
The analysis estimates that each international student contributes an average net economic benefit of around £100,000, while this group is expected to support approximately 287,300 full-time equivalent jobs across the UK.
However, the report warns that the UK is already beginning to feel the economic impact of falling international student numbers, with first-year enrolments down by around 54,500 (12%) since 2022/23.
It follows a series of policies impacting international students in the country over the past few years – including a ban on dependants, an upcoming levy on international student fees and stricter compliance requirements for universities.
Had recruitment remained at 2022/23 levels, the report estimates the UK economy would have benefited by an additional £2.9bn from the 2024/25 intake alone.
For the first time, the report uses detailed data on students’ term-time addresses to calculate local economic impacts, finding that the benefits of international education are distributed across every nation and region of the UK.
On average, international students contribute a net £62m to each parliamentary constituency, equivalent to around £580 per resident.
The report also found that the overall economic contribution of international students has grown by £4.1bn since the 2021/22 cohort, rising from £36.3bn to £40.4bn after adjusting for inflation.
But researchers cautioned that the recent decline in international recruitment threatens the UK’s position in an increasingly competitive global market.
Linda Cowan, managing director at Kaplan International Pathways, said the UK could no longer rely solely on the global reputation of its universities.
“In an increasingly competitive international market, which has seen the ‘Big Four’ study destinations expand into a broader group of more than a dozen leading global education destinations, a positive and welcoming environment is essential if the UK is to remain a leader,” she said.
Cowan told The PIE that the UK must be careful not to become too “inward looking” as student choice diversifies beyond the UK, US, Australia and Canada – traditionally the most in-demnad study destinations – as immigration policies mean that the ‘big four’ is increasingly becoming “language of the past”.
“There’s a real chance that so many other countries become much more dominant… and become the place of choice for students,” she warned.
Immigration is a top concern for voters in Britain, and it is important that the debate around immigration policy is informed by evidence
Rose Stephenson, HEPI
A striking part of the research is the consistency with which students contribute to local economies around the country rather than just in certain geographical pockets, Cowan told The PIE, suggesting that international education can play a key part in the UK’s growth agenda nationwide.
She said that government had a key role to play in ensuring international education continued to support the UK’s growth ambitions by providing “a stable, competitive and welcoming policy environment”.
Rose Stephenson, HEPI’s director of policy and strategy, said the findings should help inform ongoing debates around immigration policy.
“Immigration is a top concern for voters in Britain, and it is important that the debate around immigration policy is informed by evidence,” she said.
“This report shows that international students generate very substantial benefits for the UK economy and underpin the financial sustainability of many universities.”
Stephenson argued that if ministers chose to reduce international student numbers further, “they should be clear that there will be economic costs as well as potential political benefits”.
Meanwhile, Maike Halterbeck, partner at London Economics, warned that the UK risked undermining one of its major export sectors.
“The number of international first-year students coming to the UK has already decreased by around 54,500 (12%) since 2022/23, and is expected to continue to decline as key new policy changes – including the potential new international student fee levy – come into force,” she said.
She added that while the report demonstrates the “substantial economic value” international students bring to communities across the country, it also highlights “what the economy stands to lose if and when this major export sector starts to decline.”
