The inquiry will see the committee examine the changes in numbers of international students in recent years, the impact of international students on university funding and the availability of places for domestic students.

It will also seek to discover if universities are achieving an appropriate balance between international and domestic students.

Furthermore, the Committee will analyse recent and proposed changes to student visas and the Graduate Route to understand the impact on international student numbers, as well as the effectiveness of the government’s International Education Strategy, launched in 2019.

“That the UK is the third most popular destination for international students is a source of pride and a credit to the strength of our world class universities,” said MP Robin Walker, chair of the Education Committee.

“The contribution that those students bring is also hugely valued in our cities, industries and institutions. It boosts exports and strengthens UK soft power when students who have studied here return to their home countries with a positive experience of study in the UK.

“However, England’s universities, including some of its elite institutions, are facing significant challenges, with a growing number finding themselves increasingly dependent on income from international students to balance the books,” said Walker.

“This inquiry will explore concerns that some universities have become too reliant on students from abroad to shore up their balance sheets, and to what extent this is sustainable.”

The committee – made up of 11 cross-party MPs – will investigate what these challenges are likely to mean for the future of higher education in England.

“We will explore how the sector, and the government, intend to address the potential financial risks associated with an increased reliance on international students, as well as looking at the overall contributions international students make in our universities.”

“We will explore how the sector, and the government, intend to address the potential financial risks associated with an increased reliance on international students”

The Education Committee, a Commons Select Committee, sets out to scrutinise the work of the Department for Education, covering children’s social care, schools, colleges, the early years and higher education.

According to the Committee, the latest inquiry is necessary due to growing concerns about budget deficits at a growing number English universities.

It highlighted that the proportion of higher education providers with an annual overspend increased year-on-year from 5% in 2015, to 32% in 2020, while noting that “universities are increasingly looking to international students to cover budget shortfalls, as they pay significantly higher fees than domestic students”.

Earlier this year, research from PwC, commissioned by UUK, signalled that fees from international students are forecast to become up to 66% of all course fee income for 70 higher education institutions across England & Northern Ireland by 2026/27.

The same research also estimated that a “sharp contraction” of international student FTEs by 20% in 2024/25 would lead to 80% of institutions analysed in England and Northern Ireland being in deficit.

The Committee highlighted that in the 2021/22 academic year, there were 679,970 overseas students at UK universities, including at both undergraduate and postgraduate levels. This number represented around a quarter of the total student population, and was up from 469,000 four years earlier.

It also stated that the 2022 figure was a record high, with the UK ranked as the third most popular destination for international students.

“There have also been media reports that some Russell Group universities now get a minority of tuition fee revenue from domestic students,” the Committee said in a statement launching the enquiry.

The inquiry coincides with the government’s review into the UK’s Graduate Route, of which findings are set to be reported back to the home secretary by May 14.

The Committee is currently inviting stakeholders to submit evidence relating to the inquiry’s terms of reference until May 24.

Diana Beech, CEO of London Higher told The PIE she is “pleased” the Committee has launched an enquiry into this topic, and met with Walker earlier this month alongside Karim Fatehi, CEO of the London Chamber of Commerce and Industry, to discuss the importance of the Graduate Route to London’s universities and business community.

“While the call for evidence closes 10 days after the MAC is due to report to government, the inquiry still represents an opportunity for the sector to fill in any gaps in evidence that may arise given the short timescales for the review, or indeed challenge any recommendations from the MAC should they not work in the sector’s interests” said Beech.

Beech said that through her conversations with Walker she is “reassured” that he understands the challenges faced by universities in England and will approach this inquiry “holistically, as an investigation into what is needed to create a more sustainable operating model for institutions, rather than seeing it purely politically through the lens of the immigration debate”.

Other stakeholders are optimistic that the inquiry’s findings will show the overwhelming benefits international students have on the UK, including Joe Marshall, chief executive of the National Centre for Universities and Business, who “warmly welcomes” the announcement of the inquiry.

“International students deliver wide ranging benefits to the UK, and we are confident that the inquiry will find that the graduate visa has played a crucial role. We know that international students make a significant economic contribution – they contribute £41.9 billion to the UK economy,” Marshall emphasised.

“The financial influx from international students significantly bolsters UK universities. They help facilitate enhanced research, innovation and educational offerings for domestic students.”

Marshall said that beyond economic advantages, international students “enrich the academic environment” and foster “diverse perspectives and cultural exchange”.

“Their presence not only enhances the learning experience for domestic students but also creates numerous networking and collaborative opportunities, preparing all students for success in an increasingly globalised world,” continued Marshall.

“In no uncertain terms, universities and businesses alike benefit from our intake of international students, and we hope this enquiry will hammer home this finding.”

The news of the Education Committee’s inquiry comes at the same time as Michael Gove, secretary of state for levelling up, has backed a report containing radical measures to reduce net migration.

“Britain has some of the best companies, best universities, best innovation and the most talented people in the world,” wrote Gove in the report’s foreword.

“Much progress has been made on unleashing their potential over the last decade, but more progress is required as we level up our whole country.”

The report by Conservative think tank, Onward, proposed that only the best-performing universities should be allowed to issue student visas.

Titled A Conservative Economy, the report went on to suggest the complete abolishment of graduate visas and only allowing the best-performing institutions to sponsor visas for PhD students.

Higher education funding should “focus much more on STEM, with support for purely academic subjects focused on high-quality institutions and provision”, outlined the report.

It also stated that “lower-quality institutions should be repurposed to focus on vocational, technical and applied learning with appropriate public funding, such as through a lifetime learning allowance”.

The report went on to call for “greater collaboration between education and industry to make training more demand-led so UK education can match the needs of employers”.