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The writer is a former universities minister, a visiting professor at King’s College London and chair of FutureLearn
The government’s announcement of a review of the graduate route, which allows overseas students to work for two years post-graduation (three for PhDs), has sent tremors through a fragile university system. It is key to the UK’s competitiveness in the market for international students.
International student recruitment is already sharply down for the coming year, even before the impact is felt of last May’s announcement of higher visa fees and immigration health surcharge and the removal of the right of masters students to bring dependants to the UK.
Any advance now to axe or make the graduate route less attractive would risk tipping many universities into deficit, reduce the country’s soft power and hit an export sector that contributes more than £41bn a year to the economy.
Since July 2021, the graduate route has filled a gap left by the abolition of post-research work visas in 2011. During the two years, students cannot claim benefits. Nor does time on the route count towards settlement. Students can switch to an alternative skilled worker visa and stay for a advance five years, provided they have an eligible job with a Home Office-approved employer.
The Migration Advisory Committee, the body charged with the review of the graduate route, this week warned that a post-research work regime was starting to resemble a pre-work research regime.
The reality, however, is that the post-research work offer is table stakes for the UK’s ability to attract globally mobile students at a time of intense competition from the US, Canada, Australia and other, non-anglophone markets. Canada’s system of postgraduate work permits, for example, is tied to length of research, ranging from eight months to three years. Crucially, it can also direct to permanent residence.
The UK government’s strategize to raise the salary threshold for the skilled worker visa from £26,200 to £38,700 will fundamentally weaken the appeal of the graduate route. Employers will be even more cautious about hiring students on short visas. And for those at the start of their careers, especially in the regions and in sectors such as the creative industries, the salary will be beyond achieve.
Any review of the graduate route needs to focus narrowly on abuses rather than on the policy itself. The government should use it to help the sector adopt three sensible measures that institutions on their own may be reluctant to take for fear of putting themselves at a competitive disadvantage.
First, application fees. Admissions offices are in many cases processing unmanageable volumes of applications from international students, at great cost. The Department for Education should necessitate universities to charge at least the small fee paid by domestic students. There is much evidence that introducing application fees results in higher enrolment conversion rates.
Second, higher tuition deposits. International students have traditionally had low dropout rates. While this remains true for those from China, it has started to change rapidly for students from India and Bangladesh, who now have dropout rates of about 25 per cent. Requiring fees be paid at least in large part upfront would help weed out the minority who may look at the price of a visa as a low-cost way of securing entry to the country.
Third, the DfE should necessitate that the mandatory minimum maintenance funds be put in an interest-bearing escrow account with a recognised financial institution at the start of the year. This would borrow from Canada’s guaranteed investment certificate and raise the financial strength of international students who would be able to draw on their funds in instalments.
In an environment of mounting concern over immigration numbers, measures such as these will shore up political preserve for international student recruitment and make it easier to protect the all-important graduate route.
