LONDON — A post-Brexit drop in the number of EU students coming to the UK to study could cost the economy £2 billion ($2.45 billion) a year, according to a report from the Higher Education Policy Institute (HEPI).
The report suggests that up to 31,000 EU students could be deterred from coming to the UK if the Home Office makes European students pay the same university rates as non-EU nationals after Brexit, which would represent a 57% decline.
Currently, nationals within the EU pay similar rates to British students, but that will likely change once the UK exits the European Union.
The estimated £2 billion figure lost from a drop in EU students comprises:
• A £463 million a year loss from tuition fees;
• A £604 million a year loss from other student expenditure (such as rent & food);
• A £928 million a year reduction resulting from “the multiplier effect,” whereby general expenditure filters out into the local economy and drives up prosperity.
The loss would be in addition to the billions of pounds that would be at risk from any big cut in the number of international visas for students, according to the report. Home Secretary Amber Rudd is currently consulting on plans which could see overall foreign student visas cut by up to half, despite the fact that foreign students currently support 170,000 UK jobs, and are worth over £10.7 billion ($13.1 billion) to the economy annually.
Nick Hillman, director of HEPI, said: “Were the Home Office to conduct yet another crackdown on international students, then the UK could lose out on £2 billion 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 added.
The Times reported in October that Rudd tried to remove students from official immigration statistics, in order to protect them from any immigration curbs, but May blocked the move.
If Rudd does shelve her mooted immigration plans, HEPI suggests that universities could actually boost their income from foreign students in the wake of Brexit.
Its report suggests that an extra 20,000 foreign students a year could be attracted by the depreciation in the sterling, which makes UK courses cheaper. That could potentially boost universities’ revenue by up to £187 million a year.
Polls have indicated widespread public support for existing levels of foreign students. A ComRes poll in October 2016 found that three-quarters of the British public would like to see the same or an increased number of international students in the UK and 91% of British adults believe that international students should be able to stay and work in the UK for a period of time after they have completed their study.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.