Why are foreign students so important for our universities?

For Scotland-registered students, enrolments numbers increased by thirteen percent, while for student from rUK the increase was eighteen percent.

Over the same period, enrolments for students from outside the UK have increased by nearly 70%.

And if you dig into that number, you find that even larger changes have taken place, because since 2020/21 the previously stable number of students from the EU has dropped by 365(from 20,550 to 13,130) while the total for students from outside of the EU has jumped by 49% (from 47,630 to 70,840).

The underlying reason for these increases is simple: money.

Scottish universities receive government funding for each Scottish enrolment, with the amounts set according to the type of degree being completed. This makes sense, because it obviously costs more to educate and train a dentist than it did to get me through my English degree.

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That’s why the Scottish Funding Council (SFC) breaks down all of the available university courses into six ‘subject price groups’, categorising different degrees and awarding universities a specific amount of money for each student enrolled on the various courses. These figures are also inclusive of the ‘assumed level of tuition fees’ paid by the Scottish Government, which stand at £1,820 per student for a first-time degree.

For the lowest priced group, which includes areas such as law, history, English, politics, media, economics and business, universities receive a total of £5,601 per student; in the highest priced group, which covers only medicine, dentistry and veterinary science, institutions receive £17,760 per student.

All of this also means that university places for Scottish students are effectively subject to a government cap: if funds are limited (which they very definitely are) then there must be a limit to the number of students from Scotland who can be accepted to study at Scottish universities.

But the situation is different for students coming here from elsewhere because they can be charged fees. This, it turns out, dramatically changes the equation not just for foreign students, but also for those coming from within Scotland.

For students from the rest of the UK, university fees are typically set at £9,250 per year, which matches the maximum that universities in England are permitted to charge.

However, fees for students from outside the UK can be set far higher, and some universities – especially those with international reputations as elite institutions – take full advantage of this fact.

For example, at the University of Edinburgh, someone from outside the UK studying for an English Literature degree is charged £26,500 per year, while a non-UK neuroscience student will have to pay £34,800 per year. At the University of Glasgow, international fees for medical or veterinary students are more than £55,000 each year. Other institutions charge far less - at Abertay University, for example, overseas students are charged up to £15,500 per year for a degree

The financial gap between Scottish, rUK and especially non-UK students can be enormous, which explains why the latter make up around a third of all enrolments in Scottish universities, but contribute nearly three-quarters of the sector’s total fee income.

But this is a national average, and the individual figures for each university vary considerably.

At St. Andrews, for example, students from outwith Scotland make up 73% of enrolments, whereas at Glasgow Caledonian the figure is 31 percent. However, St Andrews also charges significantly higher fees for overseas students, which means that they account for a greater proportion of that university’s income.

But all the way at the other end of the scale is the University of the Highlands and Islands, where students from outwith Scotland represent just 7% of enrolments and 23% of fee income, and overseas students are charged far less than at many other universities.

Drawing clear comparisons across the entire university sector is, therefore, extremely difficult, but the ultimate conclusion is clear: far from somehow taking the university places of Scottish students, those from outside of the UK are actually subsidising higher education for those born here.

Universities (both here and in the rest of the UK) say that the funding they receive in relation to home-grown students does not cover the costs of teaching and completing those degrees – this is a gap that has, at many institutions, been bridged in large part using the exceptionally high tuition fees than can be levied on overseas students.

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The reality is that Scottish universities are facing a deficit between what courses cost to deliver and how much money they receive from the Scottish government for home-grown students. Foreign students, however, are typically paying fees that could cover the funding gap for at least one, and perhaps as many as three, Scottish students – although in reality, costs associated with overseas recruitment, and the need to subsidise other university shortfalls, mean that even this isn’t quite as simple as it might seem.

Some would argue that Scottish higher education has, in effect, become almost entirely reliant on importing wealthy students from overseas, and charging them several times what it costs to deliver their programme, in order to balance the books. This, they believe, represents a significant weakness - a point that is perhaps reinforced by fears that the most recent figures are two years old and driven by a large spike in overseas enrolment, with international student numbers expected to drop dramatically as more up-to-date figures become available.

So perhaps most universities do need to become less reliant on fees from foreign students, but if that is the case then an alternative source of funds would be required, and even supporters of tuition charges for Scottish students might find the required levels to be unacceptable, meaning that greater general funding from taxpayers would also be needed either way. It isn't necessarily an 'either-or' situation, but it is an enormously complex one.

Until that particular problem is solved – if indeed it can be solved – foreign students will continue to be vital for Scotland’s universities, because the truth is that without them, and the huge piles of cash they bring, much of the sector could well have been crippled by now.