According to a Moody’s report, applications from Nigerians looking to enroll in UK colleges have significantly decreased as a result of exchange rate constraints. The rating agency stated that despite concerns about pricing and tighter immigration regulations, the rise in foreign applications shows the resilience of the UK’s higher education brand.
It was observed that Nigeria had the largest fall in applications of any nation, possibly as a result of the naira’s depreciation or the visa limitations on dependents, which went into force in January 2024.
If they are not enrolled in a postgraduate research program, international students in the UK are no longer permitted to bring dependents on their student visa. According to data, Nigeria has the most number of dependents brought in by foreigners students as of September 2023, Moody’s said.
It said further potential changes to the UK’s visa policy may reduce the appeal of UK universities to overseas students. To reduce net immigration, the UK government announced in December 2023 a review of its graduate visa scheme, which allowed international students to work in the UK for two years after graduation.
The UK government is also considering increasing the baseline minimum annual salary for sponsored skilled worker visas to £38,700 from £26,200. Moody’s stated that these shifts in policy if implemented, may have a negative impact on enrolment numbers for fiscal 2025 and future applications.
On 15 February, the UK Universities and College Admissions Service (UCAS) published data on undergraduate student applicants for the 2024-25 academic year, which ends 31 July 2025.
The data showed a 0.7% increase in international applicants to 115,730, which Moody’s considered as credit positive as it partially offsets continued declines in UK applicants as well as supports revenue generation since English universities rely on income from international students to subsidise domestic undergraduate students, whose fees have been frozen at £9,250 since 2017.
The number of UK applicants declined by 1% to 479,210 from a year earlier, driving down the total number of applicants to 594,940. However, both UK and the overall number of applicants remain well above pre-pandemic levels of 452,220 and 568,330, respectively, in January 2020.
This is the third straight year of declining UK applicants, while the number of non-EU applicants has constantly increased since the data started to be recorded in 2006. With the strong numbers of international applicants, Moody’s said it expects an increase in international student enrolment for fiscal 2025.
According to the firm, this is credit positive for universities because international students pay non-regulated fees (uncapped), which can be around four times higher than regulated English undergraduate fees, depending on the course. The cap on domestic undergraduate fees, which will continue until fiscal 2025 for English universities, has resulted in a decrease in domestic tuition revenue per student in real terms.
Consequently, English universities depend on revenue from international students to offset the net losses per domestic student, which the Russell Group estimates at £2,500 per year on average. This trend is likely to continue, with the sector’s regulator, the Office for Students, projecting that fees from international students (non-EU) will increase to 24% of total income in fiscal 2026 from 19% in fiscal 2022.
Strong enrolments of international students will continue to support The University of Manchester and University College London which have the highest share of income from international tuition fees. In fiscal 2022, overseas tuition fees contributed 32% and 31% of total income for each, respectively.
Besides, the strong market brand of these universities, reflected by their low acceptance rates, suggests they would be less vulnerable to fluctuations in international applications than other universities.
