If you look at how the international education sector has been covered in the mainstream media this year, you will notice that a lot of attention has been paid to the following topics:

• The impact of international students on affordable housing supply and health care capacity;
• Debates about the usefulness of restricting the immigration of new international students in order to reduce net migration.

It is rarer to see headlines about the cultural and economic value of foreign students. This is odd because when a government imposes greater restrictions on schools and universities recruiting students from abroad, it advertises that:

• Enormous revenue losses This could be felt not only in the education sector, but also in many other industries (e.g. tourism, hospitality and consumer goods). When Phil Honeywood listed the many contributions of international students to Australia earlier this year, he stressed that these contributions include areas we sometimes don’t even think about. “Crucially,” he said, “(international students) buy new bedding when they get here.”

• A decline in competitive, scientific and innovative potential. ApplyBoard, for example, points to the US as an example of how much international students can drive an economy forward: “In 2018, there were 21 billion-dollar startups in the US whose founders had come to the US as international students … in 2022, the number of billion-dollar startups with an international student as a founder has exploded to 143.”

How carefully have governments considered the impact of fewer international students?

At this very moment, tens of thousands of prospective international students are changing their study abroad plans due to new immigration policies in Australia, Canada, France and the UK – not to mention growing anti-immigrant sentiment in some other European countries. The number of new immigrants reaching these leading destination countries will almost certainly decline – which is, after all, the stated goal of these policies. But at what cost?

Here is a summary of recent assessments of the contributions of international students in Australia, Canada and the UK.

Australia

An analysis by the National Australia Bank (NAB) found that international student spending accounted for more than half of the country’s 1.5 percent GDP growth in 2023. NAB economists write: “The 0.8 percent increase helped the Australian economy avoid two consecutive quarters of negative economic growth – and steer it away from a technical recession. But as the number of student visas approved declines, this contribution is likely to fade.”

The situation is similar in Times Higher EducationBran Black, chief executive of the Business Council of Australia, warned of the potential damage that a significant limit on the number of foreign students could mean for the Australian economy. He wrote in the Australian Financial Report:

“We are gambling with Australia’s fourth-largest export at a time when our economy is on a knife edge. International students accounted for almost a quarter of total GDP (gross domestic product) growth in the year to March 2024. The sector was worth A$48 billion (US$32.4 billion) in 2023 and employed over 200,000 people. That’s 48 billion reasons to think twice before making too deep cuts.”

According to senior government sources in an exclusive report by Australian Financial Report In early August 2024, the government plans to introduce caps on overseas student enrolments in universities from 1 January 2025. The number of overseas students will be capped at 40% of the total number of universities for two years. The cap on enrolments would follow other immigration laws that are already significantly dampening student demand for Australia.

Canada

Global Affairs Canada (GAC) has determined that the direct and indirect contribution of international students to GDP in 2022 was approximately C$31 billion (US$23 billion) – 1.2% of Canada’s GDP that year. In 2022, total spending by international students in Canada accounted for nearly a quarter (23%) of Canada’s total services exports to other countries.

Almost all of this spending (97%) was made by long-term foreign students, and much of it by Indian students (who make up more than 4 in 10 foreign students in Canada). Economic Times of India has reported that Indian students from the Punjab region alone contributed approximately $8 billion to the Canadian economy in 2023.

Indian students and students in several other key emerging markets, including Nigeria, have less incentive to apply to Canadian higher education in 2024 because of a new rule that prohibits spouses/partners of international students enrolled in colleges and undergraduate programs from being granted open work permits. This rule alone could drain billions of dollars from the Canadian economy, as so many international students must receive financial support from their partners while in Canada, especially given the restrictions on their ability to work while studying. In March 2024, only 4,210 study permits were granted to Indian students – an 85% decrease compared to March 2023.

United Kingdom

In the UK, the economic benefit of international students was estimated at £41.9 billion in 2021/22, up from £31.3 billion in 2018/19. This net contribution even accounted for an estimated £4.4 billion impact on public services. International student enrolments in UK higher education institutions increased by 12% in 2022/23 (to 758,855), suggesting that the financial contribution of international students was even higher last year.

International student applications and enrolments have been declining since the government removed the right of overseas students (with few exceptions) to accompany students to the UK. In July, data showed a 16% drop in student visa applications from July 2023 to July 2024. Mark Corbett, head of policy and networks at London Higher, said if this trend continues throughout the year, it could result in revenue losses of almost £1 billion in 2025.

In 2022/23, international students spent £11.8 billion on tuition fees at UK universities – equivalent to 23% of these institutions’ total fee income. This year, the UK’s University and College Union (UCU) published a list of 66 universities that were in financial difficulty in 2024 – a proportion equivalent to over a third of all universities in the UK.

Lest we forget the soft power that international students have: Nick Hillman of the Higher Education Policy Institute has reported that by 2023, 58 countries (more than a quarter of all countries) will be headed by a former graduate of a British university and 65 will be headed by a US-educated person.

For further background information, see: