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Global Research - 

Global student mobility

Education is an increasingly global marketplace. Students are becoming more willing to travel abroad for the best educational opportunities, and we believe the UK is very well placed to continue to take advantage of this. The long-term trend for global mobility is not going to be hampered by short-term economic turbulence. Recognising the increasingly global nature of the knowledge economy is an investment opportunity for student accommodation providers.

As can be seen from figure 4, the number of students choosing to study outside their own country rose more than five-fold between 1975 and 2008 – and is forecast to more than double again in the next 14 years. European and overseas students now account for more than a sixth of the UK student population, and we believe that this will only increase in the coming years.

This means that UK students may also increasingly feel the lure of studying abroad, but we are confident that the inflow of students to the UK will far outstrip the outflow.

The UK is well placed to take advantage of this increasingly mobile student population. The UK has five of the world’s top 20 universities according to the QS University rankings. France and Germany have none.

Cambridge tops the league, and it, alongside Oxford, has a global reputation to rival any Ivy League university in the US. Other top universities in the Russell Group and the 1994 Group have also stepped up their overseas recruitment. The London School of Economics (LSE) is a highly regarded institution across the globe, and international students make up more than 65% of its population. Two-fifths of students at Imperial College London and UCL are from outside the UK.

The number of non-EU students coming to study in the UK rose by 12% in 2009 and the number of European students rose by 6%. Initial data shows that early applications from overseas students to study in the UK from September 2012 rose compared to those who applied to start their course in 2011.

Non-EU overseas students have always paid tuition fees in the UK, so the new tuition fee regime will have little impact on the number of these students coming to study here. In fact the weakness of the pound is cutting the cost of education for many of those from overseas. Chinese students are benefitting from a discount of around 20% compared to before the financial crisis in 2007, thanks to currency movements.

The international fees charged at UK universities for overseas students are also competitive on a global scale. The US has the highest fees. Annual charges for undergraduates at New York University are nearly £25,000 a year while Harvard charges around £21,000 a year. Fees at Australian universities also outstrip those in the UK, even at institutions ranked lower than their UK counterparts. Overseas fees for an undergraduate history degree at the University of Sydney are around £16,500 a year, while a similar course at Oxford costs less than £13,000.

There has been speculation that other factors, such as stricter visa controls, could affect the number of students coming from overseas to study. The Home Office recently changed the rules for awarding student visas in a bid to clamp down on the abuse of the system, demanding new English language requirements as well as tougher sponsorship requirements for colleges.

This has definitely had an impact on non-HEFCE-affiliated language colleges and courses that can sometimes act as ‘feeder’ courses for universities. But there has been no direct impact on HEFCE-affiliated universities, as those applying for degree courses are still very much eligible for student visas. Since investors have always focused on providing student accommodation targeting the most prestigious universities, they are unlikely to be affected by the changing visa rules.

Universities are keen to attract overseas students, and have honed their marketing to best promote education in the UK. Playing host to overseas students not only enhances the student experience of those attending university by creating a ‘global campus’, but is beneficial in economic terms to the university as well as the UK.

Recent estimates show that the annual fees revenue from non-UK domiciled students is around £2.4 billion a year, while the total value of exports of UK education and training are worth up to £14 billion a year to the economy.

There are few restrictions on the number of overseas students to which universities can offer places. Domestic and EU student numbers are capped. It is reasonable to assume that universities will continue to try and boost overseas students and thereby raise their income.

On a wider scale, an education in the UK is seen as an advantage in itself. There is a perception that the education on offer in the UK cannot be matched in many emerging economies at present, reflecting that students are not just investing in academic excellence but also the cultural opportunities and global recognition that universities in the UK offer.

Conclusion

On a wider scale, an education in the UK is seen as an advantage in itself. There is a perception that the education on offer in the UK cannot be matched in many emerging economies at present, reflecting that students are not just investing in academic excellence but also the cultural opportunities and global recognition that universities in the UK offer.

There has been much publicity about the adverse effect of restrictions on immigration, especially student visas, but in reality this will have little direct impact on universities. It is certainly true that ‘feeder’ language colleges, which some students may attend before moving onto degree studies, could be hit. But we think universities will adapt, perhaps enhancing their language teaching for new students alongside their degree courses.

Universities in the UK are becoming increasingly commercial and are evolving their courses to attract the best calibre of student. We believe they will continue to step up their activities in making sure they are at the forefront of the knowledge economy. Investors in student accommodation are increasingly recognising that their assets are underpinned by long-term trends in global student mobility and further supported by the internationally recognised excellence of UK higher education.

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