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BREXIT: Oxford and Cambridge set to gain most from fee changes

UK universities are likely to see a drop in overseas students due to Brexit and other global changes, but may see their tuition fee income increase by £187 million in the first year post-Brexit as fees from EU students rise, according to new. 16 Jan 2017

The impact of Brexit is predicted to vary between universities, with the older universities gaining the most financially, the research by Higher Education Policy Institute (HEPI) found.  Oxford and Cambridge are likely to receive over £10m more in fee income each year, other top tier universities an average of £3.3m, while less prestigious universities will lose an average of £100,000, it said.

HEPI published the results of research that showed that while some changes as a result of Brexit, such as higher fees for EU students, will reduce demand, other changes including the depreciation of the pound will increase numbers by making it cheaper to study in the UK.

A 10% depreciation of the pound could increase enrolments from other countries by around 20,000 students, or 9%, which is worth £227m in fee income, HEPI said.

However, raising the fees for EU students to the level currently paid by non-EU students could cut enrolments by 31,000 or 57%, amounting to a loss of £40m in the first year, even accounting for the higher fees paid by those who do study in the UK, it said.

Making it harder for international students to come to the UK could cost the country almost £2 billion a year, HEPI said.

"This puts all the positive effects of current global changes at risk while doing nothing to ease the negative effects," HEPI said. "If the extra 20,000 students a year who are expected to come to the UK as a result of the depreciation of sterling were not allowed to come, then they could not (partially) offset the lost EU students."

In those circumstances, the UK would be hit by a drop of £463m a year in tuition fee revenues, £604m in non-tuition fee spending and there would be a detrimental impact on universities' supply chains worth £928m, the research found

"This loss would be additional to the billions of pounds that would be at risk from any big cut in the number of international visas for students," HEPI said.

Nick Hillman, director of HEPI, said: "British universities are in choppy waters and this research shows the options ahead. Policymakers can either push our higher education institutions towards the icebergs or help them reach the relative safety of the open seas."

"Were the Home Office to conduct yet another crackdown on international students, then the UK could lose out on £2bn a year just when we need to show we are open for business like never before. Removing international students from the net migration target would be an easy, costless and swift way to signal a change in direction," he said.

Higher education expert Martin Priestley of Pinsent Masons, the law firm behind Out-Law.com said: "These latest figures show how important it is for the sector that the government does not forget about the UK’s world-leading universities in its Brexit negotiations. The sector needs government to negotiate exit terms that protect it and ensure that universities continue to thrive. Arbitrarily restricting the numbers of international students that choose to study, and pay fees, in the UK and making it harder for universities to attract funding and world-leading academic talent seems ill-conceived at best."

"Notwithstanding the challenges of Brexit, however, the UK’s top universities will find new ways to thrive and I fully expect to see an increase in the number of global research associations being created over the next two to three years, partly inspired by a need to mitigate the damage of Brexit," Priestley said.

Recent Universities & Higher Education Experience