The paper outlines the argument that although models signal a potentially sharp loss of students, an “important historical precedent” shows that higher fees could work as an incentive for institutions to recruit more students and play into some students’ perception that an expensive education is more valuable.
Higher fees could play into some students’ perception that an expensive education is more valuable
However, whether the UK will become less attractive after Brexit, depends on other factors, including immigration policies, the report stated.
“No one knows for certain whether the pessimistic economic modelling or the optimistic historical precedent is the better guide to the future,” HEPI’s Nick Hillman – author of the report – said.
“What happens will depend, to some extent, on whether the new crop of ministers decide to roll out the red carpet for international students – for example, by streamlining visa procedures, improving post-study work rules and clarifying the rules for EU students after Brexit.”
According to previous research by HEPI, Kaplan and London Economics, figures showed that, by taking into account a drop in the value of the pound, universities were to lose about 11,000 incoming students – with a sharp drop in EU students, whose numbers would halve due to loss of home fee status and loan entitlement.
But they would also see £185 million more fee income, as all incoming students would then be paying the full international fees.
However, this would come at the substantial cost of loss of campus diversity, as all incoming international students would have to be wealthy enough to cover costs upfront.
The paper reminded that when fees were introduced for international students in the UK in the 80s, the outcome was different from the forecasts.
“At the time, the consensus said their numbers would fall off a cliff. In fact, the end of the subsidy laid the foundations for what eventually became a big expansion in international students,” Hillman explained.
“When international students subsidise other activities, such as underfunded research programs, there is a strong incentive to recruit more of them.”
Commenting on the report, HESA president Alex Usher said that HEPI is right to point out that there have been some occasions when higher prices have led to higher enrolments and that the international student market does behave differently from the domestic one.
“An awful lot depends on how Brexit rolls out”
But politics will determine the outcome, he said.
“An awful lot depends on how Brexit rolls out. If some kind of deal is signed, and the transition is smooth, and the UK stays part of Erasmus, then yes, I could certainly see the outcome being not too bad,” he told The PIE.
“But a hard Brexit…That would be a self-inflicted wound of a magnitude comparable to what we’ve seen in the US after Trump’s election, which has brought student numbers down by a few percent. Add big price increases on top of that? I can’t even imagine what that would do to foreign student numbers.”
“Double-digit falls for certain, I would think, which could be partly but not completely mitigated by reducing entrance standards, which I assume would happen.”