A recent report published by Higher Education Policy Institute (HEPI) argues that UK universities should lower fees in order to attract more interantional students, who will ultimately contribute much more to UK economy than the cost to the universities. The report, based mainly on the figures of 2004-05 academic year, quantifies the contribution of EU and non-EU students to UK economy, combining the direct cash injection, fiscal effects and their contribution to the GDP growth. The report concludes that each EU student contributes £23,600, and each non-EU student £24,400 each year to UK economy. Even if only the direct contributions (tuition fees and expenditure) are calculated, the total injection (3.74 billion) from international students makes higher education a bigger exporter than broadcast and media (3.7 billion), alcohol (2.8 billion), and publishing (2.3 billion).

However, although UK has good share of international students market so far (11%, only second to the US, 20%), it is facing increasing competition from other countries, who charge less fees. The report argues that it’s in the national interest to subsidise UK universities to lower their fees in order to attract more international students.

Anthea Lipsett reports on the Guardian:

The UK is in danger of losing precious international students by universities pricing themselves out of the market, the Higher Education Policy Institute warned today.

According to Hepi’s latest report on the economic benefits of international students, the UK’s market share of such students is still second only to the US, but it dropped to around 11% in 2004 from 16% in 1998.

Bahram Bekhradnia, director of Hepi, told EducationGuardian.co.uk: “There is a real possibility that we may price ourselves out of the market - last year’s Hepi survey of the student experience showed that over 25% of overseas students think they get poor value for money.

“It could well be in the national interest to lower the fee charged of overseas students, in order to maximise their number.”

While the actual number of international students in the UK is increasing overall, the report said universities should not presume this would continue.

Read the full report.