UK steals Australia’s international student lunch

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In September last year, the United Kingdom matched Australia’s world-beating two-year post study work visa, thus making it a more attractive place to study:

Now, the United Kingdom is experiencing a boom in international student enrolments:

…the president of Universities UK, Julia Buckingham… said the post-study work visa, announced in September last year, had helped “turbocharge” the global activities of universities in Britain.

“After eight years of concerted lobbying by Universities UK and others, we finally saw the government announce a new two-year, post-study work visa for international students, providing a very bold boost our universities ­needed a lot,” Professor Buckingham said. “And although we’re only four months into this new policy, it really does seem to have considerable impact if applications to UK universities are anything to go by.”

She said the boost from the reintroduction of the post-study work visa — it had been dropped by former prime minister David Cameron’s government in 2012 — built on Britain’s international education strategy, which plans to raise student numbers from 450,000 to 600,000 by 2030 and to increase the value of the country’s education exports to £35bn a year.

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The United Kingdom’s matching of Australia’s post-study work visa has raised alarm within Australia that Indian students, in particular, could choose to study in the United Kingdom instead of Australia.

For example, the chief executive of the International Education Association of Australia, Phil Honeywood, claims the United Kingdom was already diverting Indian students away from Australia:

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Anecdotally, we are already hearing that large numbers of students from the subcontinent are switching their study destination intentions from countries such as Australia to Britain.

Thus, while Indian student numbers are currently booming in Australia, it is doubtful whether this growth can continue.

The situation is made worse by recent changes by the Department of Home Affairs, which deemed Indian student visa applications as “high-risk”.

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Now Indian student visa applicants are required to demonstrate higher English-language proficiency as well as greater financial capacity before being granted a student visa. In turn, lower quality candidates should be weeded-out and enrolment growth should slow going forward (other things equal).

Australia’s success in attracting international students was always built around its generous working rights and permanent residency. It now appears to be losing these competitive advantages to the United Kingdom.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.