The UK universities most reliant on foreign postgraduate incomes

Universities are so reliant on fees from foreign postgraduates that they account for up to half their entire income, a Telegraph investigation has found.

The surge in foreign postgraduate income – now worth £6.2 billion – has put some universities at greater risk of financial collapse because of the Government’s crackdown on postgraduate visas, say higher education experts.

The Government’s immigration curbs have led to a fall of 16 per cent – or 20,000 – in the number of overseas postgraduates, according to the Telegraph analysis of official data.

That would be equivalent to the loss of £1 billion in fee income in one year following the visa restrictions, which barred postgraduates from bringing dependants into the UK unless they were doing PhD research.

Postgraduates now account for £6 billion worth of UK universities’ income. That is an eighth (13.1 per cent) of their total funding and nearly triple the £2.2 billion just seven years ago.

Fifteen universities – including Bradford, East London, Hertfordshire and Coventry – have brought in so many foreign postgraduates that the students now account for between 25 per cent and 55 per cent of their entire income including all fee, research and sponsorship funds, according to the analysis.

Nick Hillman, a former government adviser and director of the Higher Education Policy Institute, said some universities would collapse without the funding.

“International students used to be the icing on the cake when it came to university finances. They now serve as the very foundations holding up our university sector,” he said.

“In some instances, universities would go bust without them. In others, a big cut in international students would see some institutions plummet down the global league tables. Cuts in income mean a worse education for all students, less research and development and universities playing a smaller role in our national life.”

Sir David Bell, the former permanent secretary at the Department for Education and now vice-chancellor of Sunderland University, where 27 per cent of its income is derived from foreign postgraduates, said the last government’s visa restrictions and rhetoric on immigration had damaged universities.

“While the changes introduced by the previous government such as the removal of the right of international students to bring dependants with them and increased visa costs were understandable, there is no doubt that they had an adverse impact on universities across the UK,” he said.

“In addition, the language used by previous ministers did not present a welcoming tone and, indeed, suggested that the UK was closed for business. Reversing the declining numbers of international students coming into the country must be a national priority if Britain is to retain its position as a global leader in higher education.”

The exclusive analysis of public data by the Telegraph comes just a day after universities appealed to the Government to raise tuition fees on domestic students to avoid “financial disaster” despite the massive increase in funds from overseas postgraduates and undergraduates.

Labour has retained the postgraduate visa restrictions introduced by the Tories which have seen the number of dependants brought in by the mature students plummet by 77 per cent from 68,100 to 13,100.

It follows seven years of successive growth in postgraduate income from £2.2 billion in 2016/17, when it accounted for just 6.2 per cent of universities’ overall income, to £6.2 billion where it accounts for 13.1 per cent.

Fee income from undergraduate foreign students, who pay more than domestic UK students, has also increased from £3 billion, or 8.7 per cent of the total income, to £5 billion, 10.1 per cent.

This means that income from foreign postgraduate and undergraduate students now accounts for almost a quarter (23.3 per cent) of universities’ entire incomes inclusive of grants and other financial support. This is up from 15.9 per cent in 2016/17.

Two premier institutions – the Royal College of Art and London Business School – are the most heavily reliant on foreign postgraduates who account for 57.7 per cent and 46.9 per cent of their total income, respectively.

They are followed by the universities of Bradford (34.5 per cent), East London (32.5 per cent), Hertfordshire (31.2 per cent), Coventry (31 per cent), Roehampton (29.6 per cent), LSE (29.4 per cent), Sunderland (27.4 per cent), Teesside (26.9 per cent), Bedfordshire (26.7 per cent), SOAS (26.6 per cent), Robert Gordon (25.8 per cent), Glasgow Caledonian (25.5 per cent) and Goldsmiths College (25.2 per cent).

The Department for Education said Bridget Phillipson, the Education Secretary, had refocused the watchdog Office for Students on key areas such as monitoring financial health to “ensure universities can secure their financial health in the longer term”.

A spokesman added: “We have inherited a £22 billion black hole in the public finances and changes will take time. By bringing economic stability and growth, we can fix the foundations of our economy, strengthen our higher education system and rebuild Britain.”

Prof Shirley Congdon, the vice chancellor of the University of Bradford, said the funding model for universities was “not working”. Only 16 per cent of a university degree was paid for by the Government, yet every £1 of that generated £14 in graduate economic activity.

“We call on the Government to take urgent action to support the sector through a review of the funding model that recognises the true costs and benefits of higher education,” she said.