A report by the Higher Education Policy Institute (HEPI) and Kaplan International Pathways published today examined the economic impact of students coming from abroad.

The report, The benefits and costs of international higher education students to the UK economy, produced by London Economics, finds that the 404,500 international students who started UK higher education courses in 2024/25 will generate total economic benefits of £45.1 billion over the course of their studies, while costing the public purse an estimated £4.7 billion, resulting in a benefit-to-cost ratio of 9.7 to 1.

Taking into account the average net contribution of each student, if the 2022/23 numbers had been sustained in 2024/25, the net impact would have been approximately £2.9bn higher.

For the 2024-25 academic year there were 36,300 international first-year students living in Scotland who made a net economic contribution of £2.93bn

Using analysis of students’ term time addresses, the report found an average economic benefit between £410 and £480 per resident with an overall contribution of £51m to Scotland’s economy on average.

As a mean each constituency had 635 international students, a ratio of around one for every 60 of the resident population, with costs of £8m far outweighed by benefits of £59m.

While all of the top 10 constituencies by positive economic impact were in England, Glasgow North came in at 17th with 6,150 students contributing a net £467m to the economy.

The figures reveal that there has been a fall of 4,645 international students in Scotland, contributing to a challenging financial climate for further and higher education.

Students arriving from abroad pay fees, unlike Scottish students, while tuition fees for those elsewhere in the UK are capped.

Tuition fees for Scottish students are paid by the government, with the Scottish Funding Council allocating each a number of ‘funded places’, placing an effective cap on the number they can recruit, whereas there is no limit on the number of foreign students who can be recruited.

As well as paying directly into the education system with fees, international students contribute via non-fee expenditure, as well as that of friends or relatives who come to visit.

The impact of Britain’s decision to leave the European Union appears to have had a big impact on numbers, with EU students previously able to attend Scottish universities without paying fees.

The number of EU students has decreased by a total of 59% in the UK as a whole since 2020/21, with approximately 93% (377,300) of international first-year students in 2024/25 domiciled outside the EU.

India is the largest source of foreign students followed by China and Pakistan, with most EU students coming from Ireland, France and Germany.

The report also broke down the economic impact by parliamentary constituency.

After Glasgow North, Edinburgh East and Musselburgh (£396.2m), Edinburgh South West (£304m) and Edinburgh South (215.6m) enjoyed the highest positive economic impact followed by Glasgow West, North East Fife and Aberdeen Central.

On the lower end of the scale the impact on the economy of places such as Na h-Eileanan an Iar; North Ayrshire and Arran; and Caithness, Sutherland and Easter Ross was under £1m but those constituencies all had fewer than 10 international students.

The figures for each constituency can be viewed here.

Linda Cowan, Managing Director at Kaplan International Pathways, said: “In an increasingly competitive international market, which has seen the ‘Big Four’ study destinations (the US, the UK, Australia and Canada) expand into a broader group of more than a dozen leading global education destinations, a positive and welcoming environment is essential if the UK is to remain a leader. The UK is home to some of the world’s foremost universities, but we cannot rely on reputation alone.

“We must continue to demonstrate the value of a UK education and ensure international students feel welcomed from the moment they consider applying. If international education is to support the UK’s growth ambitions, government must also be part of the solution, providing a stable, competitive and welcoming policy environment that gives students confidence to choose the UK.”

Rose Stephenson, director of policy and strategy at HEPI, commented: “Immigration is a top concern for voters in Britain, and it is important that the debate around immigration policy is informed by evidence. This report shows that international students generate very substantial benefits for the UK economy and underpin the financial sustainability of many universities.

“If ministers decide to further reduce international student numbers, they should be clear that there will be economic costs as well as potential political benefits. At a time when the UK is seeking stronger economic growth, those trade-offs deserve an honest and open discussion.”

Maike Halterbeck, partner at London Economics, added: “This new report provides updated evidence on the substantial economic value that international students bring to the UK economy – value that is spread widely across the country. However, it also demonstrates what the economy stands to lose if and when this major export sector starts to decline.

“The number of international first-year students coming to the UK has already decreased by around 54,500 (12%) since 2022/23, and is expected to continue to decline as key new policy changes – including the potential new international student fee levy – come into force.”