Fee income
Fee income data is from table 6 (last updated: May 20-25) of the Higher Education Statistics Agency (HESA) finance data record[1] (opens in a new tab). Data for 2022/23 is published for 303 higher education providers (HEP’s) in the UK. This is two more providers compared to 2021/22, when data was published for 301 providers. Before 2022/23, HESA has recorded separately the value of fees of all HEP’s for EU and non-EU domiciled students and these values have been used without further data transformation or adjustment.
From 2022/23, English providers have not been required to submit fee income data by an EU/non-EU domicile split. The percentage of fee income originating from EU students has therefore been estimated by calculating the ratio of EU to non-EU fee income using data from providers in England that did publish this information and providers in the devolved administrations. This ratio was then applied to the total non-UK fee income as reported by HESA in table 6.
As part of their data submission, HE providers can restate figures for the previous year. Tuition fee figures in this publication therefore may differ from figures stated in previous years.
Scholarships
In 2021, the value of scholarships awarded to non-EU students was included as a source of export revenue. However, due to the risk of double counting – as scholarship revenue is assumed to already be included in provider’s fee income statements – this category has now been removed as a source of export revenue for the years 2010 to 2022.
EU higher education students and student finance access
Under the Withdrawal Agreement, EU students starting their course at a provider in the UK prior to 1 January 2021 are assumed to have home fee status and eligible for student support. Under the current methodology, the proportion of student loans not expected to be repaid by EU students and therefore written off by the Exchequer, has been subtracted from the total EU student fee income figure as this value is funded by the government. The write off cost, as represented by the RAB charge, has only been applied to the proportion of fees paid by EU undergraduate students who started prior to 1 January 2021, to give a high-level estimate of the RAB charge or cost to government. For all full-time higher education student loans, the RAB charge was estimated to be 28% for the financial year 2022-23[2] (and 28% for academic year 2022/23 after adjustments).
As outlined by MSITS[3] (opens in a new tab), however, “goods and services may be purchased by the persons concerned or by another party on their behalf… tuition and living costs of a student may be paid by a government”. Accordingly, we have adopted a methodological change in which RAB charges are no longer applied to the value of tuition fee income from EU students.
We have assumed that EU students starting after 1 January 2021 are not eligible for home fees and student finance. We have used HESA figure 9[4] (opens in a new tab) data to estimate the proportion of EU undergraduate first-year students in 2021/22 and 2022/23.
Living expenditure
Weekly living costs for EU and non-EU domiciled students are derived from the most recent Student Income and Expenditure Survey (SIES) which reports estimates of the average weekly living costs for the 2021/22 academic year[5] (opens in a new tab). These estimates have been uprated by inflation for 2022/23.
The estimated annual living costs of an international student will vary according to the length of stay in the UK, which is assumed to be:
- 39 weeks for undergraduate, EU students (it is assumed they are more likely to travel to their country of origin during the holidays)
- 42 weeks for undergraduate, non-EU students (it is assumed they are less likely to travel to their country of origin during the holidays)
- 52 weeks for EU and non-EU postgraduate students (reflects the longer course duration)
The number of student enrolments, split by level and mode of study and domicile, (i.e. full-time/part-time, undergraduate/postgraduate, EU/non-EU), in each year is taken from table 9 of HESA student records[6] (opens in a new tab). Student figures are then multiplied by the course length (weeks) and by the SIES estimates of average weekly living costs to calculate aggregate living cost expenditure for EU and non-EU students.
It is assumed that part-time students stay for the same number of weeks in the UK as full-time students, but that they will also be working during this period. The estimated employment income earned in the UK is not subtracted from the living expenditure because it is not in accordance with the standard practice for calculating exports[7] (opens in a new tab) .
Erasmus+
The UK is not participating in the latest Erasmus+ programme (2021-2027) meaning that this scheme no longer generates export revenue for the UK. The UK government’s replacement scheme, Turing, does not generate export revenue since it only supports the outward mobility of UK students participating in the programme.
Data for the number of incoming Erasmus+ student numbers was unavailable for 2020/21. The student figures for 2019/20 have been used for 2020/21.
Research and other contracts
The value of research grants and contracts from EU and non-EU sources are reported by Higher Education providers and published by HESA in table 5 of their finance data[8] (opens in a new tab). The total value is reported under cost centre 207: Total research grants and contracts. The sources of EU income are government bodies (8), charities (9), industry, commerce & public corporations (10) and other sources (11). Non-EU income is comprised of charities (12), industry, commerce & public corporation (13) and other sources (14).
International intellectual property income
The figure for total HE intellectual property (IP) revenue is sourced from table 4d in HESA’s HE-BCI data[9] (opens in a new tab). The current methodology assumed that 37.5% of total IP income has been exports[10] (opens in a new tab). This export rate was based on research undertaken by London Economics (2011), who estimated that 37.5% of the Research and Development (R&D) sector revenues are generated through exports. This same proportion was assumed to be applicable to the education sector.
Under the new methodology, total IP revenues continue to be sourced from table 4d in HESA’s HE-BCI data. However, the export rate of IP revenue is now estimated by calculating the percentage of HE non-software income generating licenses that are overseas using Table 4b[11] (opens in a new tab) of HESA’s HE-BCI data. This percentage is assumed to represent the overall export rate and applied to the total IP revenue figure to gain the estimated value of IP exports.
Other overseas HE income
The current method to calculate other overseas HE income is based on London Economics’ research,[12] (opens in a new tab) which used the survey responses of 14 Tier 4 providers to produce a grossed-up estimate for all HE providers. The growth rate over the 2004/05 to 2008/09 period, calculated by London Economics to be be 12.3%, was then used to estimate values of other HE income in subsequent years.
Given the significant uncertainties that now exist around the true figure, coupled with the risks of double counting and including revenue that may not relate to education related exports, we have decided to remove this income stream from our 2022 estimates.
Pathway providers
Pathway provider programmes help to prepare international students to study at UK universities. Over 90% of the universities in the UK offer pathway provision. To estimate the revenue generated from exports of pathway provision, data has been collected from the following six pathway providers: CEG, INTO University Partnerships, Kaplan, Navitas, Oxford International, and Study Group. To produce this estimate, data on the following metrics have been collected:
- Number of international students
- Tuition revenue (total gross revenue)
- Any other revenue from non-UK students – this is revenue from Pathway providers own/managed residences used by their students while on the pathway course.
- Total Revenue
- Student numbers reported / not reported to HESA (Only courses at degree level (RQF4 and above) are eligible to be submitted to HESA. Pre-degree programmes (i.e.) Foundation Programmes and some Pre-Masters Programmes are not eligible to be submitted and therefore do not appear on any official pathway data)
Data is sourced directly from Kaplan, who provided us with aggregate data for the six pathway providers. To avoid double counting, total revenue from pathway provision is reduced by the proportion of students who are reported to HESA.
Student numbers reported to HESA are unavailable for 2017 and 2018. Instead, the proportion of students reported to HESA from 2019 is used for these years.
Asynchronous online learning
Asynchronous online learning is a new, separate, category of education related activity that used to be included in the HE TNE estimates (see p.16) in the previous publication.
As part of their Aggregate Offshore Record (AOR), HESA publish data on the number of students undertaking distance, flexible or distributed learning (figure 12)[13] (opens in a new tab). All students in distance, flexible or distributed learning are assumed to be engaged in asynchronous online learning. To estimate the fees associated with these students, HESA publishes aggregate fee income data of TNE activity for providers in the devolved administrations only (table 6)[14] (opens in a new tab). An estimate of average, per-student fee revenue in the devolved administrations is calculated using this data and then multiplied by the total number of students in asynchronous online learning to derive a UK wide estimate.
HE providers’ other course fees
Other course fees is a new category of export revenue, capturing HE provider’s income from non-credit bearing course fees and FE course fees. The fee data is reported in table 6 by HESA[15] (opens in a new tab). Given that fee information is not split by domicile, export revenue is estimated by calculating the proportion of total HE fee income attributed to international fee income (see table 6)[16] (opens in a new tab) and applying that same proportion to the total other course fees figure.