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It’s an ill wind. Donald Trump’s attack on elite universities in the US, and in particular on international students there, could bring a real boost to our beleaguered higher education sector.
His latest move is to halt student visa applications pending examination of their social media posts so that they can be more thoroughly vetted. It’s temporary, but will inevitably send a chill through would-be students, and make them consider applying elsewhere. The natural “elsewhere” is the UK.
At the moment, the number of international students in British universities puts us second only to the US. A House of Commons report showed that in 2022-23 there were 758,855 overseas students, the tenth record high in a row and 26 per cent of the total student population. In terms of international students at institutions worldwide, 1.1 million went to the US, and nearly 700,000 to the No 3 destination, Canada, followed by China and Australia.
It’s a politically contentious issue, but the new Education Secretary, Bridget Phillipson, made it clear last summer that students were welcome. “Be in no doubt,” she said, “international students are welcome in the UK. This new Government values their contribution – to our universities, to our communities, to our country.”
It’s easy to see why. International students have been the main growth area for the higher education sector for the best part of a decade. That leads to a wider debate about funding for higher education, the level of fees, and the sustainability of our present student loan scheme.
But it is probably most helpful to stand back and see universities as an industry that has grown very rapidly since the 1950s, but which is now moving at best to a steady state and quite possibly a structural decline.
That is very clear at an undergraduate level. In the 1950s about 3 per cent of school-leavers in the UK went to university; by 1970 that had risen to 8 per cent, and to 19 per cent by 1990. The peak was in 2021, at 38.2 per cent, and last year it was down to 36.4 per cent. There are concerns that it might fall further.
A further factor is falling birth rates. The Office for National Statistics reports that there were 591,072 live births in England and Wales in 2023, the lowest since 1977. The total fertility rate, the average number of children born to a woman, fell to 1.44, the lowest level since records began in 1938. So the supply of British-born youngsters will continue to shrink for the next couple of decades, maybe longer.
There are things that universities can do to counter this prospect of a shrinking market for their services. One is to try to boost their research capability, increasing the numbers of post-graduates, rather than the undergrads. Another is to encourage education for later-life students. They can boost their links to the corporate sector, in some cases spawning new enterprises themselves. And they can try to boost international student numbers still further. But as other industries have found, particularly manufacturing but also legacy media, it’s tough to manage a transition from rapid growth to potential decline.
To be clear, higher education does not face a challenge on the scale that manufacturing had to confront from the 1970s onwards. But to put the point bluntly, if its domestic market will shrink, as seems inevitable, it has to boost its exports. That is where the attack on US universities may turn out to become a bit of a lifeline.
Welcomed, not resented
There are two aspects here. One is the obvious way: by persuading international students that might have come to the US to come here instead. The other, less discussed, is the market for US students to study in the UK rather than enrolling at American universities.
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As far as the first is concerned, these are all the issues noted by Phillipson in that speech last year, in particular that “their fees welcomed, but their presence resented”. But properly managed, as the Government is seeking to do by creaming off those that might otherwise have gone to the US, some further rise in international students should surely be both possible and socially acceptable.
The other really interesting growth market is US students. The global rankings have sometimes been challenged for being overly mechanical, but the plain fact is that if you are a US student wanting to study at a top university there is only one other country you can go.
Take the latest Times Higher Education study. The UK has three universities in the top ten, the US seven. The other rankings, for example from US News and World Report, are much the same. While the QS ranking has universities in Zurich and Singapore pushing some US colleges down the league table, the UK actually has four in its top 10: Imperial, Oxford, Cambridge and UCL.
It’s subjective, but I suspect an increase in US students turning away from their homeland and coming here, far from being resented, might be rather welcomed. At any rate, there has been a surge in the numbers of US students applying to UK universities since the presidential election. What a surprise.
One of the many problems that anyone writing about the future of universities has to contend with is the emotional attitude many people seem to have towards them. I really find that most unhelpful, because it confuses the whole debate.The whole business of UK fees is a good example of that. Should they go up faster? Well, not if rising fees have been a driver for the decline in the proportion of school-leavers going to university since 2022.
Are student loans fair? My worry there is that the whole system was drawn up on the assumption that graduates would work in the UK, whereas many now hop off to Dubai or Singapore.
What about the evidence in a Commons briefing document that for some cohorts of students, only 27 per cent will repay their loans in full and that the Government’s changes to the student loans system should increase that to 65 per cent? In any other walk of life, even a 65 per cent repayment rate would be terrible. Are we training a generation of young people that you don’t need to pay off your debts?
There is also the hostility towards Oxford and Cambridge, mostly from the left in Britain who focus on its elitism. It’s fascinating that the attacks are now coming from the far right in the US, with this new challenge from Trump. Can it really make sense to try to undermine institutions that are world leaders?
Brand matters
All this is confusing. The central point, surely, is that it’s really difficult to go from a growth market to a declining one, and that in a way universities are lucky in that they have a global competitive advantage. Those rankings (started, incidentally, by Jiao Tong University in Shanghai) may be distorted and unhelpful in their details, but my word they matter if you want to get the best students. The language matters, which is why many European colleges are teaching in English. Brand matters too. And most of all, students matter.
There’s a lovely phrase that I first heard from Joseph Nye, the Harvard political scientist who sadly died earlier this month. He is best-known for inventing, or maybe defining, the concept of “soft power”. But chatting to him years ago the thing that stuck in my mind was when he said that “diamonds polish diamonds”. The interaction among Harvard’s student body helped its students to become even better than they otherwise would be.
The same applies to Oxford (Phillipson is an alumna), Cambridge, Imperial, UCL and so on. Even those of us who studied elsewhere – I was hugely lucky to do my economics at Trinity College Dublin – have to acknowledge that.
This is Armchair Economics with Hamish McRae, a subscriber-only newsletter from The i Paper. If you’d like to get this direct to your inbox, every single week, you can sign up here.
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