Did you know that your fees subsidize the fees of UK students?

13-08-2015

According to a recent study by Stephen Machin, professor of economics at University College London, and Richard Murphy, assistant professor of economics at the University of Texas at Austin, fees paid by growing numbers of overseas postgraduates studying in the UK have helped to subsidise additional places for domestic learners.

The study analyses correlations between the increases in the numbers of British-born and overseas students in UK higher education institutions.

The study was trying to determine whether the rapid influx of international recruits had led to “crowding out” or “crowding in” of home-grown talent.  But the researchers found no significant relationship between the changes in the numbers of domestic and non-European Union undergraduates between 2001-02 and 2011-12.  This, according to the researchers, is probably explained by limits on the number of undergraduates British universities were allowed to recruit during this period.

However, the researchers did find a positive relationship when they looked at taught and research postgraduates when they sampled 144 institutions.  They revealed: “For each additional overseas student attending a university, we see approximately one additional domestic student.”  “This is evidence indicating that universities use the additional fees from international students to subsidise postgraduate places.”

Interestingly, the correlation was particularly strong in Russell Group universities, which attract large numbers of international scholars.

Over the last 20 years, the number of non-EU students studying full-time in the UK has quadrupled to 266,000.  Their presence in the postgraduate sector has multiplied more than five times over the same period. Non-EU students now make up 48 per cent of all students on master’s programmes.

More significantly, the paper also indicates that fees from overseas students, at all levels, now amount to well over a tenth of the higher education sector’s entire income.  The fees moreover from overseas students, represent 39 per cent of all fee revenue, eventhough overseas students only account for 15 per cent of places.

Machin and Murphy tested their findings by examining the impact of the massive expansion in the number of Chinese students taking business and management subjects.  They were especially interested to see the impact after their government relaxed visa rules in 1999.  But again, the number of domestic undergraduate students on such courses was unaffected between 1994-95 and 2011-12.  The number of postgraduates however, was positively affected.

[The full research is detailed in a discussion paper from the Centre for Economic Performance at the London School of Economics, and is summarised in an article published on October 3, 2014, in CentrePiece, the Centre’s quarterly magazine.]

How do you feel about your tuition fees subsidizing the fees of UK students?

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