Is the growth of international student mobility coming to a halt?

by Dirk Van Damme
Head of the Skills Beyond School Division,  Directorate for Education and Skills

Higher education is one of the most globally integrated systems of the modern world. There still are important barriers to the international recognition of degrees or the transfer of credits, but some of the basic features of higher education enjoy global convergence and collaboration. This is most visible in the research area, where advanced research is now carried out in international networks. But also in the field of teaching and learning, the international dimension has become very important. The so-called European Higher Education Area stands out as an area where degree structures, credit transfer arrangements and quality assurance frameworks have been aligned in order to adjust qualifications with the needs of an integrated labour market.

Yet, higher education is also one of the most unequal and hierarchical systems of the modern world; globalisation has not yet made the world of higher education a ‘flat’ one. There are huge imbalances between the quantitative supply and demand of education. And the imbalance in quality is even more striking: using an imperfect measure of quality such as the one provided by the global university rankings, one can immediately see that the perceived quality and reputation of academic institutions is concentrated in just a few countries, while the demand is exploding in other parts of the world. The academic top league (say, the top 50 institutions in any of the global rankings) is particularly concentrated, and because of the metrics used to determine quality it is very difficult for institutions in other parts of the world to enter that club.

To some extent international student mobility can be seen as a consequence of global academic inequality. Students are moving to other parts of the globe in order to find the best possible education their money can buy. International student mobility is one of the ways through which the geographical gap between supply and demand is being overcome. Investing resources in one’s son or daughter in order to secure them a high-quality credential has become a preferred strategy of affluent middle class families in emerging countries, especially after their purchasing power started to increase. The chart above shows that for many years the total number of international students remained rather stable around 1 million, but that from the 1990s onwards the numbers started to grow significantly. Some countries were quick to tap into this opportunity and developed strategies to market their higher education offer. From 0.8 million in 1975, the number rose to 4.2 million thirty-five years later.

Many people expected the growth to continue and even to accelerate. But that is not what happened, as is also clear from the chart. From 2012 onwards the growth really stopped. Between 2012 and 2015 a mere 100 thousand students were added to the 4.5 million. The recent figures, published in the OECD’s latest Education at a Glance, suggest that it is not just a temporary setback, but a more structural phenomenon.

What could be the reasons for this change? We probably need to look at developments both on the demand and the supply side. Regarding the former, the obvious explanation is the improvement of domestic education in the most important countries of origin. China, and to a lesser extent India, have invested huge resources in developing their higher education system, including a select number of universities that are predestined to achieve world-class status in the next few years. Chinese universities are now aggressively entering the global rankings and continue to improve their ranks every single year. Changing prospects at home have an impact on the investments strategies of affluent middle-class families in these nations.

Still, changes on the demand side alone cannot explain the lack of growth. Indeed, the potential reservoir of interested students in these countries remains immense. We also have to look at the supply side, to developments in the main countries of destination. It is evident that in the main countries active in the field of exporting education services, things have fundamentally changed as well. From a very hospitable and welcoming approach to international students, popular and political attitudes have reversed things into a much more hostile stance. This has happened in the main destination countries such as Australia, the UK and the US, but also in upcoming players such as Switzerland, Sweden or the Netherlands. The general backlash against migration, aggravated by the refugee crisis and the flows of asylum seekers, has also turned the climate for foreign students upside down. Populist and often false accusations that foreign students are only interested in permanent migration, and that they take the future jobs of domestic students, are now in the media every day.

The recent 2017 Open Doors Report on International Educational Exchange data, published by the Institute of International Education (IIE), points to a decrease of 7% in the numbers of new international students enrolling in US higher education institutions. The majority of surveyed institutions (52%) in the IIE survey expressed concern that the country’s social and political climate could deter prospective international students. In the UK, a political decision is being discussed of removing international students from the government’s target of reducing net immigration. Still, Brexit and a general hostile climate against migration in the UK is probably also becoming a deterrent for international students. Similar developments can be seen in other countries of destination.

What is happening at both the demand and supply side of international higher education is fundamentally reshaping the size and direction of international student mobility flows. In a strange way, they are reshaping the global academic inequalities. At the same time they are also redefining where and how the future professionals and leaders of the 21st century world will be educated. Just as much as academic education was an important instrument in shaping the post-WWII global order, the current changes in international education will have a profound impact on the 21st century world.

Links 
Education at a Glance 2017: OECD Indicators
Open Doors 2017

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Who benefits when international students pay higher tuition fees?

by Dirk Van Damme

Head of the Innovation and Measuring Progress Division, Directorate for Education and Skills 

In 2014, over 3 million students in OECD countries – more than double the amount in 2000 – were studying outside their country of citizenship. International students go to study in countries with reputations for academic excellence; but they are frequently also seen as seeking economic and social opportunities in the host country.

As many countries seek to restrict immigration, international students are becoming a targeted population. One of the policies that aim to reduce the number of incoming international students is charging higher tuition fees for international students compared to national students (“national” meaning outside the European Economic Area [EEA] in the case of European countries). Countries also hold the view that national resources and taxpayers’ money should not be spent to subsidise international students, so they increasingly aim to charge the full tuition cost to international students. Some of the countries that have put themselves firmly in the market for international students in recent years also see fee-paying international students as an important source of revenue for their higher education sector.

The current Education Indicators in Focus brief, based on the most recent data on international student mobility and tuition fees published in Education at a Glance 2016, looks into the reforms differentiating tuition fees between national and international students. The majority of OECD countries still do not differentiate fees between the two categories, but a growing number of countries do. As the chart above shows, in some countries the differences are significant. In Australia, Austria, Canada, New Zealand and the United States, foreign students pay double or more the tuition fees charged to national students, on average, while Sweden and Denmark charge no fees to national students but ask international students to pay more or less the full cost of tuition.

It is well known that exporting education services has become an important economic activity in some countries, including Australia, New Zealand, the United Kingdom and the United States. Fee-paying international students generate a considerable revenue stream to higher education institutions; they also consume other goods and services and thus contribute to the host country’s economy. But to what extent do universities in these countries benefit from this source of income? There are no data available to make reliable estimates for a large group of countries; but for Australia and New Zealand, countries that vigorously market their higher education services, the income from fee-paying international students equals over one-quarter of the total expenditure on higher education. By contrast, in the United States, income from these students represents only 2.4% of total expenditure on higher education; in Canada, it represents only 8.2%. But it is interesting to see that in Denmark – a country that traditionally considers free higher education to be a right, but introduced tuition fees for non-EEA students in 2005 – the income generated by international students now equals 13.3% of total expenditure on higher education.

Universities are genuinely concerned about their place in the global scientific research and education system. They thus see the internationalisation of their institutions as part of a wider strategy. But at the same time, it is clear that in several countries fee-paying students generate welcome additional revenue at a time when public funding is insufficient to cover costs. As is evident from the political debate in several countries, this creates tensions between universities’ policies to defend their commercial interests on the one hand and governments’ restrictive immigration policies on the other.

These developments fundamentally alter the position and perception of international students. From being a desirable addition to the student population, a source of global relevance and diversity, they are now regarded as either cash-cows or scroungers of national resources, taking away benefits and opportunities from locals. It remains to be seen how these students will react to these developments. The current Education Indicators in Focus brief provides some evidence, based on observations in Denmark, New Zealand and Sweden, that introducing fees for international students did result in a drop in their numbers in subsequent years. International students are looking for the best education at a reasonable cost, balancing perceived academic excellence and reputation against cost and hospitality.

As long as higher education systems in emerging economies are not able to match growing demand with sufficient high-quality local supply, students will continue to cross borders to seek education opportunities. For destination countries with excellent higher education systems, international students offer a lot of benefits – but only if they are regarded as welcome additions to the student population, and not as cash cows or opportunistic free-riders.

Links
Education Indicators in Focus No. 51: Tuition fees reforms and international mobility
Education at a Glance 2016: OECD Indicators
Podcast: International Tuition Fee Policies: An Interview with Gabriele Marconi
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Chart source: OECD (2016), Education at a Glance Database, http://stats.oecd.org/.