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Market intelligence for international student recruitment from ICEF
15th Mar 2017

UK: Higher education holding; poised for growth in ELT

Foreign enrolment in British higher education has been essentially flat for the last couple of years. Meanwhile, student weeks in English Language Teaching (ELT) programmes fell by 13% in 2015, and, while final statistics for 2016 have not yet been released, challenging trading conditions will no doubt limit the outlook for the year. However, a recent report nevertheless pegs the economic impact of foreign students enrolled in UK universities at nearly £26 billion (US$32 billion) - a major export sector by anyone’s estimation - and ELT providers are looking ahead to 2017 with renewed optimism amid early signs of strengthening demand. Even with the challenges of the last two or three years, it is important to note that the UK remains one of the world’s top study destinations, and, taking into account both higher education and ELT numbers, is still second only to the US for total international enrolment.

Flat is the new up

The latest data

from the Higher Education Statistics Agency (HESA) finds that foreign enrolment in British higher education was essentially flat in 2015/16, with only .33% growth from the year before. Just over 438,000 international students - counting both EU and non-EU enrolments - were enrolled last year, compared to 436,585 the year before. European Union student numbers were actually up slightly last year (127,440 compared to 124,575 in 2014/15), but non-EU enrolments fell off again, declining by roughly 2,000 students to reach a total of 310,575 in 2015/16. Looking inside those numbers a bit, we see that much of that non-EU decline was driven by India and Nigeria, which fell off by 7% and 9% respectively for a combined net decline of just under 2,400 students. Perhaps more troublingly, first-year enrolments from major non-EU sending markets are down even further. Among the top ten non-EU markets for British higher education, Indian commencements were off by 9% in 2015/16, whereas first-year enrolments from Nigeria and Malaysia fell by 18% and 11% respectively. Those larger drops in programme commencements will have a knock-on effect in future years as there will be a smaller cohort of students coming along to replace the relatively larger graduating classes ahead of them. We can imagine as well that those notable drops for Nigeria last year were a function of the low world oil prices and stricter foreign exchange controls that had a telling effect on overall Nigerian outbound during 2015 and 2016. If that is indeed the case, we might also expect Nigerian student numbers to demonstrate some recovery as world commodity prices continue to improve and as Nigeria’s central bank now begins to ease currency controls. The declines from India, however, are perhaps more durable as they extend a trend of falling Indian enrolment in the UK that we have observed for some years now. India is second only to China among global sending markets and has been a major driver of enrolment growth in other leading study destinations, including the US, Australia, Canada, and New Zealand. The contrasting trend in the UK arises largely from more restrictive visa policies for international students, and, in particular, limits on post-study work rights for foreign graduates.

Growing demand for ELT

A recent report

from the Higher Education Policy Institute (HEPI) projects that further restrictions on student mobility could cost the British economy up to £2 billion (US$2.5 billion) per year. But the key thing here is that the report actually anticipates further restrictions on inbound mobility in the years ahead. Absent those, or if the UK even moves to ease visa restrictions for foreign students, the analysis suggests that British higher education could actually gain market share in a post-Brexit context. That projection relies in part on a weakened British pound, and by extension a more affordable British education, and delegates at the recent English UK Marketing Conference in London got an early glimpse of this phenomenon at work. The pound is off against the Euro by nearly 16% over the past year and about 30% over the past two years. The English UK conference delegates heard that that shifting currency value is driving a spike in interest in British ELT this year.

A major export sector

Any such indicators of growth are more than welcome against a pattern of declining market share for the UK over the last two or three years. And a new economic impact study commissioned by Universities UK highlights how much is at stake. The study estimates that spending related to international students - on-and-off-campus and by the students themselves as well as their visitors - generated £25.8 billion (about US$32 billion) in total economic impact in the UK in 2014/15. That spending, including an estimated £4.8 billion in tuition fees to UK universities, also supports nearly 207,000 jobs throughout the country. “While this report focuses on economic impact, it is important to remember that international students also enrich our campuses and the experience of UK students, both academically and culturally,” said Universities UK President Dame Julia Goodfellow. “Many return home having built strong professional and personal links here that provide long-term, 'soft power' benefits for the UK.” Reflecting on the UK’s still-dominant market position and opportunities for future growth, she added, “We must present a welcoming climate for genuine international students and ensure that visa and immigration rules are proportionate and communicated appropriately. This will be even more important as the UK looks to enhance its place in the world post-Brexit."

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