Image: LordRunar, via Getty Images
As Hepi assesses the post-study visa, Harriet Swain considers an upcoming government-commissioned review
Following the bank holiday break, it is back to business as usual—and for universities that means awaiting a potentially game-changing report on the graduate visa route from the Migration Advisory Committee, due within the next week.
The fear is that the government will use the report to end—or severely curtail—availability of the route, which allows graduates to remain in the UK for two years (three for doctorate degrees) after their studies and is a major draw for international students.
The report was commissioned by the Home Office in March—a timescale so tight that the chair of the MAC, Brian Bell, said it would “substantially limit the quality and quantity of evidence that we can provide”. In his letter responding to the commission, he made an urgent call for the government to supply evidence about all those who had received graduate route visas, including employment information, warning that without it the report could be delayed.
In an attempt to supply some concrete facts, the Higher Education Policy Institute, with the educational consultants Kaplan International Pathways and the National Union of Students, today publishes a report on the benefits and costs associated with the graduate route, put together by the consultancy London Economics.
Costs and benefits
Taking into account tax revenues post-graduation, plus visa fees and the health surcharge payable by migrants to the UK, it concludes that the gross benefit to the UK in higher tax revenue from graduate route visa holders was £588 million in 2022-23—£10,410 per main graduate route visa holder. After costs including providing public services such as health and education for international graduates and their dependants, the total net benefit was £70m, or £1,240 per graduate.
The year studied was only the first full tax year the graduate visa was in operation and benefits are expected to increase substantially as the route gets more established—if it gets more established.
The visa was introduced in July 2021 under then prime minister Boris Johnson following pressure from, among others, his brother Jo Johnson, a former universities minister. At the time it was considered a means of helping achieve the government’s ambition to increase international student numbers.
Rows over immigration within the Conservative Party lie behind the decision to announce a review. Students, who made up more than 600,000 of the 1.2 million people who arrived in the country legally last year, have found themselves in the centre of the battleground. Meanwhile, universities fear they will become casualties if the government decides to end the route and thereby reduce the international student fees on which they increasingly rely.
Rules on dependants
Today’s Hepi report estimates that 66,410 people held graduate route visas in 2022-23, including 56,460 main applicants—international graduates from UK HE—and 9,950 dependants.
The figure for dependants is expected to reduce significantly in future because the graduate route visa only allows international graduates to bring dependants who joined them when they were students. Recent restrictions on dependants allowed on student visas will therefore have knock-on effects for numbers allowed in through the graduate route. Home Office figures show that the number of dependants accompanying international students to the UK fell by almost 80 per cent in the first half of 2024 compared with the same period the previous year.
This is likely to reduce the costs to the exchequer of the graduate route, while the researchers who carried out the report suggest the benefits to the exchequer they have calculated are likely to be an underestimate. This is because they do not include benefits generated while the graduates were students, including through international fees cross-subsidising home students’ teaching and research. Nor does the estimate account for these graduates filling key skills shortages or tax receipts from adult dependants who are working, or for the wider diplomatic, trading and cultural benefits to the UK.
Calls for evidence
Nick Hillman, Hepi director, said Hepi had wanted to provide key facts on how the graduate route has been operating because of fears that important decisions would be taken based on little robust evidence. He said the research showed that those making use of the graduate route visa are paying more in taxes than they use in public services, but the benefits had so far been limited.
“If the graduate route visa remains in its current guise, as I fervently hope, then the financial and productivity benefits will multiply in the years ahead,” he said. “If, on the other hand, the graduate route visa is severely restricted or even abolished, as has been rumoured, then fewer international students will come to the UK in the first place, damaging our universities, our economy and our soft power. Tougher rules would mean employers in the public and private sectors find it harder to recruit the skilled employees they need. We would all be financially and culturally poorer.”
Linda Cowan, managing director of Kaplan International Pathways, said preserving the graduate route visa was critical to ensuring the UK remained attractive to international students in a globally competitive market, particularly in light of the changes the government has already made. “Time should be given to allow the recent changes to take effect.”
Ellie Gomersall, NUS Scotland president, called for the government to take student and graduate numbers out of net migration figures, saying: “Policymakers must remember that the unstable and hostile environment they are creating for our international friends and colleagues does real damage—not just to the UK’s education system, but to the people who have to experience this uncertainty and hostility every single day.”
Others in the sector have already made pleas against hasty action on the graduate route, from Universities UK, which said it had driven substantial growth in non-EU enrolments, to the UK Council for Graduate Education, which was concerned that the tight timetable of the review left no space for a full call for evidence.
In this week’s Sunday Reading, Jonathan Portes, professor of economics and public policy at King’s College London, suggested that government concerns about the route were based on misconceptions about who chooses to use it and argues that any major change would have more costs than benefits.
Impact assessment
But the government could do worse than consult its own impact assessment statement, published a mere three years ago, shortly before the graduate route was first introduced.
This said the intention of the route was to enhance the offer to international students to retain their talent upon graduation, thus contributing to the UK economy and fulfilling government objectives. It said the Home Office had engaged extensively with the sector and employers before agreeing the policy, which was to be reviewed in 2026.
Why the hurry to bring a review forward by two years when even those commissioned to do it feel evidence is lacking?
The answer seems even less clear now that talk of a summer election has subsided, along with Conservative hopes of winning anything any time soon.
As if the policy position was not confused enough, the University of Hertfordshire was yesterday celebrating receipt of a King’s award for enterprise, backed by King Charles and the prime minister, for increasing numbers of international students and the recognition that it has thereby contributed to the UK economy.
Late last month, the Green MP Caroline Lucas asked in Parliament what assessment had been made of the impact of recent changes to immigration rules on demands for the graduate visa and was told that an assessment had been prepared and would be published “in due course”.
The only evidence the government seems interested in at the moment is what is coming out of the ballot box—even when that is not looking good.
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