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UK sector mulls how to deal with perception as “expensive” destination

The UK international education sector needs to innovate with new funding models and initiatives to help the country counter its perception as an expensive study destination, sector stakeholders have said.
February 9 2022
4 Min Read

The UK international education sector needs to innovate with new funding models and initiatives to make study in the country more affordable for international students, sector stakeholders have said.

Suggestions for actions that could improve the financing of studies in the UK include lower visa and health surcharge costs, a widening of scholarship opportunities including the Chevening scheme, and introducing a loan system for international students.

Speaking at a Westminster Higher Education Forum policy conference on international student recruitment, founder and chairperson of the National Indian Students and Alumni Union UK Sanam Arora, who works professionally in investment management, said a specific loan scheme wouldn’t “be too far fetched”.

The scheme could allow international banks to cooperate with Indian banks, link post study work visas to the employment opportunities that universities offer, and create a mutual fund that supports international students into the long term, she suggested.

“I think we can be quite innovative here and bold here with our strategy”

“I think [we could] create an ecosystem that links the finances to the credit on offer across that global banking system, partnering up with Indian banks, which are also now, for instance, present in the UK, so [that] there’s a clear mutual fund system… that it’s something I’ve been thinking about for a while,” she said.

“I think we can be quite innovative here and bold here with our strategy.”

“Money is the biggest consideration when deciding on where to study,” Jemma Davies, global head of Enrolment Partnerships at Studyportals noted, citing the i-graduate International Student Barometer that found 74% of the 110,000 student respondents pointed to scholarships on funding as factors that drive their final decisions.

“This is bigger than one university. They’ll be people here that have competitively priced degrees, that have a sound scholarship scheme in place, that are based in a town or city that’s quite affordable to live in,” she told attendees.

“But that’s unlikely to be enough to change the perception of the whole international student body, considering the UK. So how can we come together as a collective to address this perception of affordability, could we revise our price point? Could we implement an international student loan scheme? Could we be more consistent with our scholarship offer?”

Director of Audience & Editorial at postgraduate experts FindAUniversity Mark Bennett said one option for the UK could be similar to the current Erasmus+ masters loan system that offers set sum of up to €18,000 for two years for eligible students studying abroad in the Erasmus area for the first time to complete masters degrees.

“The money is provided by private lenders in either the outbound or inbound country, not by governments or by Erasmus itself. However, the European Commission provides certain guarantees that allow those private lenders to offer relatively favourable terms (below market interest rates, repayment holidays, etc),” he said.

“Other references to introducing an international student loan would need to be clarified as there are obvious difficulties with simply extending the UK’s existing system,” he told The PIE.

However, the UK is unlikely to consider an income-contingent scheme for a number of reasons including the difficulty recovering debt, potential cost to the exchequer (“the domestic loan is already proving more expensive than desired”), as well as political factors.

“Any such scheme would almost certainly also need to be accompanied by a cap [either on maximum loan allowance or on how much institutions can charge], otherwise it’s a blank cheque… Neither is really ideal,” he said.

The comments come almost 18 months after a similar proposal on UK government-back loans was made by UK stakeholders.

A joint UUK InternationalBUILA and UKCISA document, published in June 2020, proposed exploring “mechanisms to offer government backed loans on commercial terms to international students from selected countries” to help students with the upfront costs, as with UK domiciled students.

At the time its was not clear whether EU students would be eligible for domestic fee and loan status for 2021 entry. While that was confirmed for the 2021 entry, EU students will no longer be eligible for domestic fees or loan opportunities via the UK government.

“EU students now can’t borrow from the student loans company because we’ve come out of the EU,” Davies said.

“[But] how do we create a financial offer to make us more attractive and overcome those perceptions that we’re too expensive to study?” she asked.

“EU students now can’t borrow from the student loans company because we’ve come out of the EU”

Unlike the US, which has “really adopted the term scholarships”, the UK is not necessarily perceived as a study destination that offers bursaries and grants, she said.

“Despite its popularity, the UK is perceived as expensive by international students and that’s not just on tuition fees, but is but the aspects of costs such as visas, the immigration health surcharge and living costs,” said Gwion Sims, head of International Recruitment at University of York.

The UK could be starting to reach the limits on the heights of tuition fees and costs, “particularly when we’re trying to target the markets that we may see as more price sensitive”, he suggested.

Sims continued to advocate for institutions becoming more customer-focused and better at responding to specific needs of international students. International departments also need to work closer with other parts of universities to meet the needs of international students and argue for more dedicated resources to create a personalised international experience, he said.

“I would love to see lower visa costs and a lower health surcharge, but I think I would also love to see an expansion of something like the Chevening scheme in future as well so it’s really tied to those country priorities in the international education strategy,” said Sims.

“I think that would be hugely attractive to international students… I’m sure universities would be willing to contribute to that.”

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