Universities face second blow


Sam George assesses the impact of changing visa regulations on British universities and the wider economy.

Student visa reform is on the cards. Given that he is a PPE graduate from Balliol, I am rather surprised that Immigration Minister Damien Green would put his name to a proposal so economically wrong-footed. While the policy is primarily intended to decrease the number of migrants enrolling in private colleges, the effect will be felt acutely by Britain’s top universities.

The higher education sector is not in a good position to take yet another blow. Unless the policy is altered to differentiate between private colleges and established universities, top international students – potential applicants to Oxbridge – will favour American universities.

Here is a brief summary of developments to date. A key part of the coalition’s plan to cut net migration to fewer than 100,000 people per year is slashing the number of international students in UK higher education. The most significant aspect of the proposal is the abolition of the Post Study Work (PSW) Visa, which allows UK university graduates a two year period wherein they can live in the UK and seek employment.

Without doubt, the denial of the PSW Visa to graduates from all UK tertiary institutes will represent a serious loss of competitiveness of UK universities as an export. As a gateway to one of the most elite workforces in the world, the PSW Visa is major attraction for international students. A recent survey of international students at the LSE found that the post study work scheme was “a strong factor in encouraging international students to come to the UK rather than the US or Australia”.

This should come as no surprise, because historically the PSW Visa was designed for the express purpose of keeping UK universities competitive with those in the USA and Canada, whose more open immigration policies made them a more attractive destination for a rapidly growing international student market. Given the astronomical fees involved, serious doubt as to job prospects in the UK after graduation will not be looked upon favourably by potential applicants.

The impending changes would make graduates who want to stay on for work reliant on employee sponsorship and ‘Tier 2’ visas, both of which will be subject to a cap and require the potential employee to specify that there is no suitable EU candidate to fill the job. Students wishing to re-apply for further study in the UK may even be required to return to their home country while they are not enrolled.

With respect to the proposal, the Home Office declared that it wants to attract “high calibre students with the genuine desire to study…with a presumption that upon completion they will leave promptly”. What of the ‘knowledge economy’? The UK is in the invaluable position of having universities with the prestige to attract some of most talented students in the world. Having tapped this rich pool of human capital, it seems ridiculous then to want international graduates to return home the moment they have received their degrees. These are some of the most valuable minds in the world – the motors of the knowledge economy – and making it harder for them to stay on and find work is a big mistake for future productivity.

Universities UK reports that international students make up 45 percent of post-graduates and are over-represented in “strategically important subjects”: they comprise 63 percent of all post-graduates in maths and computer science, 62 percent of those in engineering and 27 percent in physical science. The UK’s reputation for both research and knowledge based industries has a lot to lose if top overseas graduate students are discouraged from applying to British universities by poorly thought out visa changes.

The government is deluded if it thinks that the latest changes will attract high calibre students. Quite the opposite, I fear. International students have a lot of cash and many options and I suspect that, like Pfizer, they will go back to the greener pastures of the USA. If the PSW Visa disappears, America will undeniably be a more attractive option for ambitious and career driven international students in search of elite education. Fees at private US universities do not discriminate between ‘Home’ and ‘International’ students and nor does financial support. Moreover, graduates of US universities are allowed a one year period to look for a job. If they find one, employers apply for a work permit on their behalf, without the necessity to declare a lack of suitable employees in the home nation, in contrast to UK policy. Perhaps the greatest draw card of US policy is that there is a special allowance for graduates with masters level degrees or higher to apply for permanent residency. These provisions send a clear message that the USA wants to attract and retain the finest minds, having recognised their importance to the productivity of the workforce; the policy of David Cameron’s Coalition sends a clear message of quite the opposite sentiment.

Yet these latest rounds of reform are not without reason. On closer inspection, the Coalition’s proposal points to a serious rot in the immigration system. ‘Private colleges’, which primarily confer qualifications in vocational subjects and English-as-a-second-language, have sprung up in great number in recent years and represent an exploited loop-hole in current immigration policy. As Damien Green insists on pointing out, these institutions, rather than established universities, are the target of the visa changes. But Green has not signalled anywhere that this will be embedded in the legislation and, unless it is, he is naive to think that established universities would not be affected.

While some of these colleges are high quality, many are simply bogus institutions, acting as immigration vehicles for people who pose as students but are really trying to migrate to the UK on a permanent basis. While enrolled in higher education, students are eligible to bring their dependents, who can then stay on with them for the two year period afforded by the PSW Visa. The result is that would-be migrants can use these private colleges to achieve de facto permanent residence by virtue of the extra privileges given to international students. In one such private college, 940 students shared only two lecturers between them; in another, students were found to be doing no study time and working in 20 different locations. Clamping down on these dubious practices and being stricter about which institutions are eligible is the obvious alternative solution. The regulation around private tertiary education is woefully inadequate and poorly enforced, which has allowed the problem to get out of hand. The Home Office estimates that an alarming 26 percent of students studying in private institutions are breaking immigration rules. This is certainly a real problem with real effects, which is being experienced in equal measure by Australia and New Zealand.

If looking abroad for similar situations can teach us one thing, however, it is the dangers of rash policy response. In February 2010, the Australian government cracked down on visas for non-degree programmes and post study work schemes in a bid to decrease the abuse of international student immigration. Combined with a strong Australian dollar, these changes precipitated a 16 percent decline in student visas issued in 2010 and predictions for accelerating declines in overseas students and revenues the next year. It is telling that the vice-chancellors of the eight top Australian universities exerted pressure on the government to rescind some of the restrictions, which it was forced to in 2010. Let this be a lesson. Because of the strong competition in the overseas education sector, applicants for degree and non-degree programmes alike are quick to respond to unfavourable changes in student immigration policy.

Despite Damien Green’s unfounded assertions to the contrary, Britain’s top universities will be hit hard by the reforms. Green is right to be concerned about the upward pressure that sub-par programmes are putting on net migration, but he is playing with fire by proposing blanket reform of international student visas. The effect on top universities is too expensive. Rather than treating all tertiary institutions as the same, policy should focus on tightening regulations around private colleges and distinguishing between which institutions or courses are eligible for the PSW Visa and which are not. If not, America beckons.

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