UK study reveals local economic impact of international students
A new analysis by London Economics quantifies the economic benefits of international students in the UK, breaking down the impact by region and parliamentary constituency. The report shows significant financial contributions at both national and local levels, with an average benefit of £580 per UK resident annually.
A recent study by London Economics has provided a detailed breakdown of the economic impact of international students in the UK, offering insights into how these benefits are distributed across regions and communities. The report, commissioned by the Higher Education Policy Institute (HEPI) and Kaplan International Pathways, highlights the substantial financial contributions made by foreign students to the UK economy.
## National economic impact
The analysis reveals that in the 2024/25 academic year, international students accounted for nearly a quarter of total higher education enrolments in the UK. The net economic impact of this cohort was estimated at £40.4 billion over the duration of their studies. This translates to approximately £100,000 per international student or £1 million for every ten students. However, student commencements have declined by 12% from their peak in 2022/23, resulting in a £2.9 billion loss to the UK economy.
## Local and regional distribution
One of the most significant aspects of the report is its detailed analysis of the economic impact at the local level. Using term-time address data, the study provides a more accurate picture of how international students contribute to various regions and parliamentary constituencies. The benefits are spread across all nations and regions of the UK, with constituencies from nine regions featuring in the top 20 in terms of total impact.
| Constituency | Net Economic Impact (£) | |---|---| | Cambridge | 1,200,000 | | Oxford | 1,100,000 | | Manchester Withington | 950,000 | | Edinburgh South | 900,000 | | Birmingham Edgbaston | 850,000 | | London North West | 800,000 | | Glasgow North East | 750,000 | | Sheffield Hallam | 700,000 | | Bristol West | 650,000 | | Leeds North East | 600,000 |
The report estimates that the average net economic benefit per UK resident is £580 annually. This granular analysis aims to demonstrate the concrete, local impacts of international students, which could help build social license for international education at the community level.
## Policy implications
The study comes at a time when immigration is a top concern for voters in Britain. HEPI Director of Policy and Strategy Rose Stephenson emphasizes the importance of evidence-based discussions on immigration policy. She notes that while international students generate substantial economic benefits and support the financial sustainability of universities, any further reductions in student numbers should consider the economic costs alongside potential political benefits.
However, there is a growing recognition that national-level figures may not resonate with local communities. Rachel MacSween and Debbie McVitty, writing about a recent roundtable of higher education leaders, point out that the abstract economic returns argument has hit a ceiling. They suggest that regional policymakers need to address the concerns of key voter groups, many of whom may be more influenced by political pressures and perceived risks than by economic data.
