Key Takeaways:

• New immigration rules in Australia, Canada, and the UK are set to reduce international student numbers, but at what financial cost?
• Economic analyses suggest these countries could lose billions of dollars as a result of these policy changes.

In recent years, international education has garnered attention in the media, focusing heavily on issues such as housing affordability and healthcare strain due to increasing student numbers. However, less is being said about the cultural and economic contributions that international students bring to these countries.

Restricting the ability of universities to enroll international students risks not only damaging the education sector but also many other industries, including tourism, hospitality, and consumer goods. Phil Honeywood, a leading advocate for international education in Australia, highlighted the often-overlooked contributions of international students, emphasizing how they impact the economy in various ways, right down to small purchases like bedding. The effects of these students extend far beyond just the education sector, contributing to national economies in unexpected areas.

At a time when governments in Australia, Canada, and the UK are placing stricter limits on international student enrolments, the long-term costs are being questioned.

Economic Impact Across Key Destinations

Australia:
A 2023 analysis by National Australia Bank (NAB) revealed that spending by international students contributed more than half of the country’s 1.5% GDP growth, staving off a technical recession. However, the Australian government’s move to cap international student enrolments at 40% of universities’ intake from 2025 could significantly curb this contribution. With student visa approvals already falling, economists predict further economic decline.

The international education sector in Australia generated AUD$48 billion (US$32.4 billion) in 2023, employing over 200,000 people. Limiting enrolments threatens this vital revenue stream, a concern echoed by Bran Black, CEO of the Business Council of Australia.

Canada:
In 2022, international students contributed CDN$31 billion (US$23 billion) to Canada’s GDP, accounting for nearly a quarter of the nation’s total service exports. However, recent policy changes barring work permits for partners of international students could sharply reduce these numbers. Already, there has been an 85% drop in study permits granted to Indian students between March 2023 and March 2024.

This policy shift may have profound effects on Canada’s economy, particularly as international students, mainly from countries like India and Nigeria, seek financial support from partners while studying.

United Kingdom:
International students brought in £41.9 billion to the UK economy in 2021/22, with enrolments increasing by 12% in 2022/23. However, new restrictions preventing international student dependants from accompanying them have caused a 16% drop in visa applications in 2024. This could lead to nearly £1 billion in lost revenue by 2025.

The UK’s University and College Union (UCU) reported that over a third of UK universities are facing financial distress in 2024, highlighting the crucial role international students play in supporting the higher education sector.

Looking Forward: The Unseen Costs

While these immigration policies aim to control migration, they may lead to unintended consequences such as reduced innovation, scientific advancement, and economic stagnation. International students are not just contributors to university revenues; they drive entire economies forward through entrepreneurship and innovation. In the US, for instance, many billion-dollar startups were founded by former international students.

As these countries grapple with balancing immigration control with economic stability, the full impact of these policy shifts is yet to be realized. However, with billions of dollars at stake, these decisions may come at a high price.