The proposal, , recommends that Norwegian universities should begin to charge non-EU students NOK130,000 (USD$13,000) in 2023 – though it also stipulates that individual institutions can charge more than that for courses in high demand.

The rationale for the introduction of fees is to attract only the most “motivated” of international students. An anticipated drop-off in overall international enrolments is expected to then free up capacity in the higher education system and in accommodation for Norwegian students. Critics argue that mandatory tuition fees will disadvantage poorer international students from less prosperous world regions, but Norway’s Minister of Research and Higher Education Ola Borten Moe defended the proposal, saying:

“Our universities and university colleges are well fitted to attract international students because the quality is good, not because they are free of charge. I believe that tuition fees will give us more motivated international students. Since we will have fewer international students, this will release both study places and housing for Norwegian students.”

A fall-off in international enrolments is highly likely

Study.eu conducted a survey among just over 1,000 students living outside of Europe who were considering Norway as a study destination. These students were virtually as likely to cite “free tuition” as the quality of Norwegian universities as reasons they were interested in studying in Norway.

As the following chart indicates, more than a quarter of student respondents said they could not afford tuition fees even of 50,000NOK (around USD$5,000). If tuition fees were raised to the level recommended in the Norwegian government proposal (NOK 130,000 or more), over three-quarters of respondents did not believe they could afford to study in Norway unless there were some scholarship arrangements in place.

Gerrit Bruno Blöss, CEO of Study.eu, points out that a decline in international students would affect the overall Norwegian economy:

“In the short term, this might be a fool’s bargain. Fewer students mean less money flowing into local economies. And while there won’t be many students who will actually pay fees, many operating costs will remain fixed even with smaller classes.”

Following in the footsteps of Sweden and Finland

In 2011, Sweden introduced tuition fees for international students, which contributed to declines of up to 80% in foreign enrolments for several years, until 2014. By the 2017/18 academic year, international student numbers rebounded to about the same level they were at in 2011, signalling that the market had reset to a new normal in terms of cost of study in Sweden.

This pattern is also observable in Finland, where international students began paying tuition fees in 2017, leading to a short-term decline in foreign enrolments. In 2022, there are more international students choosing to study in Finland than in 2016, in part because Finnish institutions leveraged scholarship programmes to lower their costs of study.

Earlier this year, Finland’s Ministry of Education and Culture set up a task force . That task force found that Finnish higher education institutions “had collected some EUR 42 million in tuition fees in 2019–2020.” However:

“The higher education institutions use a significant proportion of the potential return from tuition fees for student grants and scholarships. After subtracting the grants and scholarships, higher education institutions received approximately EUR14 million in revenue from tuition fees.”

In Finland, it is typical for international students to pay annual tuition of between EUR6,000 and 8,000 (USD$6,200 to $8,292) for universities of applied sciences and EUR8,000 to EUR12,000 (USD$8,292 to $12,437) for universities.

In Norway, fees for international students range between SEK80,000 (US$7,000) and SEK140,000 per year (US$12,400).

Therefore, Norway’s fees are set to be the most expensive of the three countries.

By contrast, most German higher education institutions remain tuition-free for international students. Its foreign enrolments reached a record high in 2021, and a recent survey shows that free tuition is Germany’s most important competitive strength.

Many students don’t know yet about Norway’s plans

The Study.eu survey found that more than two-thirds of surveyed students did not know that they might have to pay tuition fees if they chose Norway for a programme in 2023. Study.eu’s Mr Bloss points out the potential implications of this:

“International students typically plan their studies one to two years in advance. For Norway, that’s especially true as the country’s application deadlines are the earliest in all of Europe. But universities haven’t had a chance to properly communicate potential fees to their prospective students for the 2023 intake. Two thirds of students we surveyed hadn’t even heard of this plan at all. Introducing fees in a hurry will destroy study-abroad plans for many young people – and is likely to cause lasting reputational damage to Norway’s education sector as well as the country as a whole.”

The survey suggests that if Norway is to introduce tuition fees for international students in Fall 2023, raising awareness of this decision should be done as soon as possible.

For additional background, please see:

• “Germany’s foreign enrolment reaches record high with increase of 8% in 2021/22”
• “Search analysis tracks student interest in English-taught degree programmes in Europe”
• “Stockholm reporting continued growth in international student numbers”

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A new report from the Stockholm Academic Forum (STAF) – a peak body made up of local government plus the city’s 18 higher education institutions – provides further evidence of continuing growth since 2014, with foreign student numbers in Stockholm now approaching 2011 levels for the first time since the new tuition policy was introduced.

 reports just under 10,000 international students in Stockholm as of the 2017/18 academic year. Those numbers have grown by 5% year-over-year, about 20% in total over the last three years, and are on pace to surpass the previous high point from 2011 some time this year.

Roughly one in four international students in Sweden is studying in Stockholm and so the report also provides an interesting directional indicator as to overall student numbers in the country.

As the following chart reflects, roughly two-thirds of those students are so-called “free movers” (that is, students in Sweden outside of a formal exchange programme), with the remaining third in the country on exchange.

The total number of international students in Sweden, 2008/09–2017/18. Source: STAF

China takes the lead

The other notable development for Stockholm, as of 2017/18, is that China is now the city’s largest sending market, having surpassed Finland and other traditional leading source markets in Europe.

“During the academic year 2017–18, the number of Chinese students skyrocketed,” notes the report. “They are now the largest single international student population in Stockholm with 826 students, an increase of 18% compared to the previous year.”

Along with China, only India (the fifth-ranked source market in 2017/18 with 385 students in Stockholm) and the US (ninth-ranked; 275 students) appear as non-European markets among the top ten sending countries for Stockholm.

Enrolments from the top four sending markets for Stockholm, 2012/13–2017/18. Source: STAF

Overall, roughly six in ten inbound students (61%) come from Europe, with another 27% from Asia, 5% from North America, 3% from Africa, an 2% from South America.

The STAF report notes as well that national breakdowns vary notably among institutions in Stockholm. Chinese and Indian students, for example, are more likely to be found in STEM programmes (science, technology, engineering, and math) at KTH (the Royal Institute of Technology). Meanwhile, the majority of students from other leading senders, including Finland and Germany, are enrolled at Stockholm University.

Focused marketing

In commenting on the growing enrolment over the last three years, the report says, “Underlying this increase is strategic work including cooperation with prestigious universities worldwide, and marketing.”

“The work of recruiting free moving students has also become more strategic, as individual institutions focus on prioritised markets. Moreover, several HEIs offer joint programmes, called dual degrees, with foreign universities: To receive a double degree, students spend one year in Stockholm and one year
at the foreign university.”

For additional background, please see:

• “Sweden’s international student numbers up for the first time since 2011”
• “Demographics, economics, and internationalisation driving enrolment growth in Europe”
• “Finland introduces university tuition fees for non-EU students”

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“It should be easier for people graduating in the EU to obtain a work permit in the EU,” says the report.

The shape of migration to the EU

While several large Asian markets – among them India, China and the Philippines – drive overall migration to OECD countries, migration to the EU is more diverse, with potential migrants in nearby European and African regions more likely to cite the EU as their desired destination compared to other regions. However, the EU attracts smaller numbers of higher-educated migrants than other OECD destinations.

The EU hosts about 31% of the global pool of higher-eduated migrants distributed across EU and OECD countries, whereas nearly six in ten (57%) are in North America. In fact, the overall pattern is that migrants to the EU tend to be younger and less educated than is the case in non-EU OECD countries. Between 2000 and 2010, the share of all low-educated migrants in OECD countries living in the EU15 rose from 36% to 45%, and in 2014 employment among migrants in the EU15 countries was more than ten percentage points lower than in non-EU OECD countries.

The OECD’s recommendation that the EU reform its work permit policies to retain highly-educated foreign EU graduates therefore represents a plan to reverse this long-term trend. Current migration rules were developed at a time when member-states were in more direct competition. The report’s authors suggest that modern-day factors require a less fragmented approach designed to make the EU more attractive as a whole.

The report notes that variances in policy make for uneven issuance of work permits. As it stands now, Italy, Spain, and the UK issue more than half of all work permits bestowed. Some EU states impose education, occupation, or salary requirements, while others rely upon hard numerical limits. Still others use labour market tests, and some deny entry to less skilled labour migrants entirely while others admit them only for seasonal activities.

This is not to say work permit polices are completely disconnected. The EU developed some common rules with the 1999 Amsterdam Treaty, while the 2009 Lisbon Treaty mandates that certain objectives should be supported and complemented through EU initiatives, and made the European Parliament co-legislator in the area of legal migration. The chart below, from the OECD, gives an idea of the overall alignment of policies in various countries.

Barriers to labour migration in selected EU countries. Source: OECD

The Netherlands, for its part, is out front on the issue of attracting highly skilled migrants. The understanding that the retention of international students bolsters the Dutch economy led to the creation of the Make it in the Netherlands () programme in 2014. Among other areas of focus, MiitN began to promote the learning of Dutch to foreign students, worked toward creating a bridge between study and career, and streamlined bureaucratic procedures.

EU President Jean-Claude Juncker has called for a reset on foreign worker rules as part of a broader agenda of boosting employment rights and setting wage standards, among other goals. Already an EU vote earlier this year harmonised and eased rules for non-EU students, with the goal of attracting not only more students, but also researchers and interns.

The further changes proposed are touted as a way to bring clarity to various grey areas in regulations, and they fall into three broad categories: adapting labour migration channels, simplifying procedures, and promoting the EU labour market.

Proposed Blue Card changes

The EU’s Blue Card programme was designed to attract skilled workers from abroad. However, the programme was not adopted by all member states and has not been widely used.

With an announced on 7 June 2016, the programme is now set for a major restructuring. Less than 14,000 Blue Cards were issued last year, and mostly by Germany. In September 2015, more than three quarters of respondents to a public survey concerning the Blue Card scheme believed more should be done at the EU level to improve the attractiveness of EU member states for highly skilled migrants. The ease of getting a permit was the issue singled out by 63% of respondents. Currently, in order to receive a Blue Card non-EU nationals must earn 1.5 times the average salary of the EU country where they plan to move, and employment contracts must be for at least one year.

Some of the European Commission’s proposed reforms include:

• Faster and more flexible procedures. Applications can be submitted either abroad or in EU territory, and the maximum processing time is brought down from 90 to 60 days.
• Parallel national schemes for similar eligible groups are to be replaced by a single, EU-wide scheme for highly skilled third-country nationals.
• The required minimum duration of initial contracts is brought down from 12 to 6 months to align more with labour market realities and many national schemes.
• The new scheme introduces more facilitation for recent graduates and workers in shortage occupations to increase the retention of foreign talent educated in the EU and facilitate their entry from abroad.
• Member states have the option to introduce fast-track procedures for recognised or trusted employers, with the recognition procedure regulated at the national level.
• Blue Card holders will be able to move to other member states after 12 months of residence in the first member state, compared to 18 months under the existing rules. They would be able to move after six months of residence in second, third, and further member states.
• Professional experience will be recognised as equivalent to possessing higher education credentials.

Certain rules would not change, for example the requirement for Blue Card applicants to prove their highly-skilled status, or to have a job offer or contract in hand before submitting paperwork. Member-states will also still be able to rely upon labour market tests to judge employer needs and create national shortage lists, which would be used to adjust salary thresholds and thus attract the workers each country’s labour markets need most urgently.

According to OECD Director for Employment, Labour, and Social Affairs Stefano Scarpetta, employers in most EU member states already report more difficulty attracting and retaining talent than those in competing non-EU countries. Commenting on the need to draw more highly skilled workers, he said, “Skilled migrants can play an important role in addressing labour market shortages, drive innovation, and promote productivity growth.”

Political obstacles loom

Jean-Claude Juncker is now his EU presidency due to the outcome of Britain’s Brexit vote. It is unclear what effect this would have, if any, on the EU’s recent proposals. Likely none, as support is strong among policymakers for common action in making the EU more attractive for highly qualified migrants. But any reforms will take place in an atmosphere of growing anti-immigrant sentiment among EU citizens.

Strong resistance to EU policy in countries like Denmark, Sweden, the Netherlands, and Slovakia are already roiling the political waters. Switzerland staged a referendum on immigration caps in 2014 that passed and is legally binding upon Swiss policymakers, and Romania has its own immigration vote upcoming in the autumn. Various European politicians have criticised the EU’s proposals in the most forceful terms. Gisela Stuart of the UK’s Labour Party told , “The plan appears to be to open our borders ever wider – extending access to the European labour market to yet more war zones.”

The authors of Recruiting Immigrant Workers: Europe acknowledge that the issue of legal migration is tied to that of forced and illegal migration. For example, one proposed Blue Card reform expands the programme to encompass people who previously arrived in Europe illegally and are seeking asylum. But the report also points out that legal migration, such as by foreign students seeking university degrees, constitutes the bulk of movement to the EU.

The EU estimates Blue Card reforms will net the single market €1.4 billion to €6.2 billion each year (US$1.6–US$7 billion), derived from retaining or attracting 32,000 to 137,000 additional high-skilled workers. Dimitris Avramopoulos, EU Commissioner for Migration, Home Affairs, and Citizenship, said, “If we want to manage migration in the long-term, we have to start making those investments now, in the interest of us all. The revised EU Blue Card scheme will make it easier and more attractive for highly skilled third-country nationals to come and work in the EU and strengthen our economic growth.”

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• Digital tools, including online search and more specialised school selection sites, play a key role in the discovery phase of students’ research – that is, the point at which they are researching different institutions and trying to identify schools that could be a good fit.

• Given the growing prominence of online platforms – including search sites and online directories in student decision-making processes – senior staff should be devoting substantial attention to these platforms, perhaps more than they have in the past.

• Recent surveys from the UK point to a shift in marketing spending toward digital channels – and to paid and organic search in particular. However, they also indicate that recruiters are struggling with measuring the performance of their online campaigns.

• Nearly two-thirds (63%) of the agents responding to the 2015 şÚÁĎąŮÍř i-graduate Agent Barometer indicated that 20% or more of their leads came from online sources in 2015. And for nearly a third, online sources accounted for 40% or more of total leads.

Google research on education-related search volumes highlights the growing role of online search in the “student decision journey” and an increasing trend of students searching exclusively online for information about study programmes.

One of the most important findings offered by the search giant is that non-branded search – that is, queries for more specific programmes or locations as opposed to those for an individual institution or school – is key. Google’s analysis finds that as many as 9 in 10 prospective students don’t know which school they want to attend at the onset of the search process and they reflect this non-brand orientation in their search behaviour.

With this in mind, Google has recommended that recruiters target their search marketing efforts to promoting particular programmes in specific locations.

Platform insights

As these findings suggest, online search and discovery channels should now be a priority for senior marketing and recruitment staff.

Interestingly, school selection sites that operate at scale and that can therefore aggregate large volumes of student search data are now also providing valuable insights into shifting patterns of demand and behaviour online.

For example, Hotcourses, a global search platform targeted to international students, released a new analytics services late last year called “Insights” that allows for greater analysis of usage and search patterns across its websites. The company recently released commenting on some of its initial data observations, with a particular emphasis on a few key destinations and a set of emerging markets: Thailand, Indonesia, Vietnam, Brazil, Malaysia, Saudi Arabia, and Egypt.

The paper draws on 14 months of Insights data reaching back to November 2014, and relies on data from 23,000,000 Hotcourses users in 2015 alone.

Among its high-level findings, Hotcourses finds that the US remains the most searched-for destination, with a 33.5% share of platform searches in 2015. The UK follows with 27.2%, and then Australia with 17.2%.

Share of search volumes by destination on Hotcourses, 2015. Source: Hotcourses

We have, in recent years, reported on a pattern of declining market share for the UK, and Hotcourses research corroborates this trend. Its whitepaper notes “Across all top 10 major destination countries the UK either flatlines or loses its share of searches from prospective students. This is in keeping with recent HESA data which shows the UK with a diminishing number of enrolments in six of its top 10 source countries. In the first half (January – June) of 2015, the UK received 27.5% of searches across all websites, this reduces to 26.9% by the second half of the year (July – December), an in-year fall of -0.6%.”

Curiously absent from the data are other major international study destinations, including Canada, France, China, and Germany. This perhaps illustrates that data from a proprietary search platform such as Hotcourses may not fully reflect broader patterns of student search or mobility, such as we might see on Google or other general-use search engines.

Trends in the US, UK, and Australia

An important segment of the Hotcourses whitepaper looks at “diversification markets” for the US, the UK, and Australia. It defines a diversification market as “a country which current constitutes less than 10% of students in a country.” In other words, these are source countries that are particularly significant to the diversification efforts of American, British, and Australian institutions.

In terms of these emerging markets, the US received the greatest volume of searches from Brazil (15.6% overall in 2015), Vietnam (9.9%), Thailand (6.7%), Indonesia (5.2%), and Saudi Arabia (4.4%). While Brazilian students remain those the most likely to be searching for the US of students in the diversification markers, Hotcourses notes a drop occurring through 2015 from this market (from 16% to 15.2%), which it imagines is a result of the ending of the hugely influential Brazilian scholarship programme, Science Without Borders.

The UK received the greatest volume of diversification market searches from Thailand (13.3% overall in 2015), Indonesia (11.1%), Vietnam (7.0%), Brazil (6.8%), and Saudi Arabia (4.2%).

As we noted earlier, Hotcourses notes that the general trend is negative for the UK, with the UK either flatlining or losing share of searches from prospective students. However, there is one bright spot: “The UK sees an increase from 37.3% to 41.1% in searches from Indonesia from the first to the second half of 2015 …. this would indicate Indonesian students are looking beyond the traditional countries of USA, Australia and NZ.”

Australia, meanwhile, is generating the most searches from these diversification markets: Vietnam (16.6%), Indonesia (13.4%), Thailand (11.1%), Brazil (6.5%), and Saudi Arabia (2.4%).

Hotcourses notices a significant drop in searches for Australia from Indonesian students (from 15.4% to 11.5% over the course of 2015). It relates this to a wider context of Indonesian students feeling unwelcome in Australia: “In the early part of 2015, there had been a number of high profile news stories where asylum seekers from Indonesia were refused entry to Australia, and this appears to have filtered through into the extent to which prospective students wish to study in that country.”

Top subjects searched for by different markets

Overall, Engineering, Health and Medicine, and Business and Management are the top subject searches, but there is some variation. These are the top subject searches (in order) the report notes for five countries:

• India: Engineering, Health and Medicine, Business and Management, Applied and Pure Sciences, Computer Science and IT;
• Saudi Arabia: Engineering, Health and Medicine, Business and Management, Applied and Pure Sciences, Social Studies and Media;
• Thailand: Engineering, Health and Medicine, Business and Management, Creative Arts and Design, Social Studies and Media;
• Russia: Business and Management, Creative Arts and Design, Social Studies and Media, Health and Medicine, Applied and Pure Sciences.

Overall, the Hotcourses report sheds fascinating light on the study interests of prospective students from key markets as reflected in these students’ search behaviour. The insights from this report alone could help to finetune recruitment tactics for specific markets – including those “diversification markets” that educators are increasingly aware they have to consider in their enrolment strategies.

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Fees currently average SEK100,000 per year (US$11,700) but with some notable variances among programmes and institutions. As University World News reported recently, “, such as the University College of Arts, Crafts and Design in Stockholm which charges SEK285,000 (US$33,300), and the KTH Royal Institute of Technology in Stockholm which charges [US$28,300] for courses in architecture.”

Reflecting the sudden shift in 2011 from “free” to “hundreds of thousands of Swedish krona”, total student numbers, including both EU and non-EU enrolments, continued to decline through the 2013/14 academic year.

Total number of incoming and outgoing students for Sweden, 2004/05 – 2012/13 academic years. Source: UKĂ„

However, the latest data from the Swedish Higher Education Authority (UKĂ„) also illustrates that the numbers of new non-EU students began to slowly increase immediately after the 2011 crash and notably accelerated in 2014. The number of new non-EU students enrolling with Swedish institutions grew by 46% between fall 2013 and fall 2014. In absolute terms, this resulted in an increase of 830 new students (from 1,810 in 2013 to 2,640 as of fall 2014).

International student commencements for Sweden by region of origin and category, fall 2010 to fall 2014. Source: UKĂ„

The UKĂ„ adds of recent-year commencement trends, “[The introduction of fees for non-EU/non-EEA students] led to a decline in the total number of new incoming students of one-third between the autumn of 2010 and 2011, from 21,690 to 14,580. Since then there has been a slow increase and in the autumn of 2014 the number of new incoming students was, as stated above, 15,690.”

There are three important qualifiers to add to the table above. First, it is entirely concerned with student commencements – that is, it counts only students who are beginning their studies in Sweden for the first time – and so does not reflect the overall enrolment trends for both new and continuing students.

Second, it looks at student commencements for a specific point in time (fall intake) as opposed to enrolment recorded for the entire academic year (whereas academic year is the period of reference used in the preceding chart).

Finally, the chart distinguishes student commencements not only by region of origin (students from the EU and European Economic Area as well as those from Switzerland remain exempt from fees), but also for two categories: free movers and exchange students.

The following graphic breaks down student mobility from a Swedish perspective. Within this framework, non-EU/EEA free mover students are the ones that are now obliged to pay international student fees in Sweden.

International student mobility from a Swedish perspective. Source: UKĂ„

The bigger picture

With this broader perspective on student mobility squarely in mind, let’s step back from looking only at commencements to consider the more comprehensive enrolment pattern for fall 2014.

The UKĂ„ reports that in addition to the new fee-paying students indicated in the table above, there were also 1,300 continuing, fee-paying students in Sweden as of fall 2014. This puts the total non-EU enrolment at just over 3,600 students for that intake, representing a 30% increase over the roughly 2,800 fee-paying students enrolled in fall 2013.

While Sweden’s fee-paying students come from 107 countries, 25% are from China and another 14% (about 500 students) are from India. The number of Indian students in Sweden has reportedly quadrupled since 2011.

University World News notes as well that this segment of Sweden’s international enrolment is highly concentrated among only a few universities. “Half of the fee-paying students are attending four Swedish universities: Lund University (578), KTH Royal Institute of Technology (503), Chalmers University of Technology (308) and Uppsala University (301), while the other half is distributed among 25 universities and colleges.”

If we think in terms of fall enrolment from year-to-year (as opposed to counting students for the full academic year), the total number of incoming students rose for the first time since 2011 to reach 25,400 in fall 2014.

Seen through the lens of the academic year, however, and keeping in mind that the most recent academic year data is for 2013/14, the UKĂ„ notes, “During the academic year of 2013/14 about 32,600 incoming students were attending first and second-cycle programmes in Sweden, which is 1,400 fewer than in the previous academic year. In 2013/14 about 18,500 of the total number of incoming students were free movers and 14,100 exchange students. The number of exchange students declined by 900 (6%) and the number of free movers by 500 (3%).”

So there are a couple of countervailing trends at work here:

• On the one hand, the overall number of international students has continued to decline through 2013/14;
• On the other, we see accelerated growth in the number of fee-paying students between 2013 and 2014, to the point that total incoming numbers nudged slightly upward in fall 2014 for the first time in several years.

It will be interesting to see if that increase for fall 2014 translates into overall growth for the 2014/15 academic year.

There are, however, other factors that have prevented the increasing numbers of fee-paying students from having a greater impact on overall mobility figures. First, up to fall 2014 the year-over-year increases in fee-paying commencements have been too modest to influence larger enrolment trends in the country. At the same time, Sweden has also seen some declines in the number of incoming exchange students and these have largely offset any gains from increased fee-paying enrolment.

Factors driving growth in fee-paying enrolment

Sweden has been a ready case study of the effects of introducing (or dramatically raising) international student fees, and it has certainly been a commonly cited example in the debate over international tuitions in neighbouring Finland. However, the Swedish experience, particularly the ongoing recovery of its fee-paying enrolment, provides other important lessons as well.

To begin, the Swedish example illustrates the value of sustained marketing and recruitment. Several Swedish institutions began recruiting more actively in the wake of the 2011 fee change and their efforts have been rewarded in the years since with growing numbers of fee-paying students.

The impact of increased recruiting is particularly notable for postgraduate programmes with non-EU/non-EAA applications to master’s programmes increasing by 25% since 2011.

In conjunction with the introduction of non-EU/non-EEA tuition fees, the Swedish government also moved to expand scholarship support for incoming students. In total, the government currently provides about SEK250 million (US$30 million) in scholarship and grant funding for foreign students.

Along with this expanded financial aid, Sweden has also moved to expand work rights for international students in Sweden. Students are now permitted to work during their studies, to remain and work in Sweden after graduation, and, particularly in the case of doctoral students, to pursue permanent residency in the country.

Finally, there has also been a significant expansion of English-taught programmes within Swedish higher education institutions over the past decade. There are more than 800 such programmes in Sweden today (only Germany and the Netherlands have more among European countries), representing nearly a quarter of all university programmes in the country.

These measures suggest a cohesion in the efforts of Swedish policy makers and institutions to further internationalise higher education in the country, and as such they represent a valuable example for many study destinations regardless of fee policy.

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Our focus today is on its findings with respect to international mobility. Drawing largely on data through the 2012/13 academic year, Education at a Glance 2015 reaffirms many of the key characteristics of international mobility that we have come to understand over the past decade.

Ongoing rise in international student mobility

The number of foreign tertiary students enrolled worldwide increased by 50% between 2005 and 2012. As many as 4.5 million students were enrolled outside of their home countries in 2012 and the total number is estimated to have surpassed five million by this year.

The report notes, “Student mobility has increased dramatically over the recent past, due to a range of factors. The exploding demand for tertiary education worldwide and the perceived value of studying at prestigious post-secondary institutions abroad contribute to an increasing and diversified flow of international students, ranging from those who cannot find a place to study in post-secondary education at home to students of high academic achievement studying at high-quality programmes and institutions. In addition, the educational value associated with a diverse student body, the substantial revenues that can be earned by expanding education for international students, and economic and political considerations prompted some governments and institutions to make major efforts to attract students from outside their national borders.”

Asia is the engine of growth in global student mobility

It was the region of origin for 53% of all international students in 2012/13, and China and India remain the world’s first and second-largest source markets. “Asia is dominating,” said Andreas Schleicher, Director of the OECD Directorate for Education and Skills.

“That is where you can see the hunger for learning. Parents want their children to get a better education and they still quite often choose countries in the Western world, in OECD countries, to obtain those qualifications.

It may change in the future but at the moment that is still by a large margin the most dominant source of international students, followed by Europe, and with a large gap by Africa.”

Distribution of international students in tertiary education by region of origin, 2013. Source: OECD

Shifting market share

The US remains the leading study destination but, while absolute numbers of foreign students in America continue to increase, its market share has fallen. “That share is declining in the United States,” adds Mr Schleicher. “The market is dividing up quite differently with countries like Japan [and some European countries] getting a larger share.”

More broadly, Australia, Canada, France, Germany, Japan, and the United Kingdom together receive more than 50% of all international students worldwide and OECD countries attract 73% of all students enrolled abroad.

Also of note: the number of international students enrolled in tertiary education in OECD countries was, on average, three times the number of students from OECD countries studying abroad.

Level of study variations for international students

Education at a Glance 2015 has some thought-provoking new observations as well. In particular, it highlights the growing importance of post-graduate programmes and the higher proportions of international student enrolment at advanced levels of study.

“The proportion of international students among total higher education enrolments tends to be much larger at the most advanced levels of tertiary education,” notes the report. “On average across OECD countries, 24% of students enrolled in doctoral or equivalent programmes are international students against an average of 9% in all levels of tertiary education.”

The OECD speculates that the following factors may be contributing to greater proportions of internationally mobile students in advanced studies:

• Particularly severe capacity constraints – that is, very limited opportunities for post-graduate or doctoral studies – in the students’ countries of origin;
• The benefits of study abroad, in terms of career opportunities and earning potential, are that much greater at advanced levels of study;
• Doctoral (or comparable level) students may simply be more likely to travel and live abroad, in part because they would be attractive to their host countries for their research contributions during their studies and/or as highly qualified immigrants.

The following chart makes the point quite vividly that while foreign students may represent a relatively small proportion of total undergraduate enrolment in a major destination like the US, their participation rates are much higher at the master’s and doctoral levels.

International student enrolment as a percentage of total tertiary enrolment in OECD countries, by level of study, 2013. Source: OECD

Hit the brakes?

The report also gives passing attention to a possibility that has begun to play on the minds of international educators in recent years: can the market keep growing as quickly as it has? More to the point, what happens if growth slows significantly?

There are a variety of inter-related demand factors that influence demand patterns for study abroad, including domestic capacity, economics, demographics, labour market requirements, and immigration policies. And on the question of future trends, OECD says only, “In the current economic climate, shrinking support for scholarships and grants, as well as tighter budgets for individuals, may slow the pace of student mobility.”

The report does go on, however, to explore the different elements that drive student decision-making around study abroad and it distills these down to the following decision factors:

• Language of instruction. Languages that are widely spoken and read are attractive and the “progressive adoption of English as a global language” remains a major factor in the prominence of English-speaking destinations. This underlying demand driver has also played an important part in the expansion of English-taught programmes in non-English-speaking destinations, including those in Europe.
• Quality of programmes. Study destination attractiveness correlates strongly to perceptions of quality, as derived from international university rankings but also from a wide range of other indicators of quality for individual institutions and programmes.
• Costs of study. Both tuition and costs of living factor here, and all are filtered through the lens of prevailing currency exchange rates. OECD notes cost as an important consideration but observes as well that higher tuition fees do not necessarily discourage prospective students so long as the quality of education is perceived to be high.
• Immigration policy. There is no question that the destination country’s policies around student immigration are one of the most important determinants of attractiveness for foreign students. This pertains to the ease (and timeliness) with which a student visa can be obtained but also to opportunities for the student to work during or after his or her studies. The prospects for immigration after graduation may also be an important factor for students and host countries alike.

The global classroom

Overall, the OECD’s findings for 2015 reflect a global marketplace for education that continues to expand, but that is also increasingly complex.

“Tertiary education is becoming more international through a number of means,” notes the report. “For example distance education, international education-related internships and training experiences, crossborder delivery of academic programmes, and offshore satellite campuses.”

The global education market is also characterised of late by more varied patterns of mobility. China, for example, remains the world’s leading source of mobile students but is now also an important study destination in its own right. The same is true for Malaysia and a number of other regional destinations around the globe.

Growth rates and other high-level market trends will continue to hold our attention in 2016. But this expanding range of shifting market conditions will also challenge and engage international educators in the years ahead.

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Private investment in student housing – both on-campus and off, and both independently and in partnership with schools – is growing by leaps and bounds for two reasons. The first is that institutions, banks, and private developers see the potential for good returns given the profound imbalance in supply and demand in student housing that exists in many markets. Simply put, there are not enough beds to meet the needs of growing populations of students in many places around the world.

The second reason is that many schools, colleges, and universities simply do not have the land or capital required to meet demand for student housing. This opens up an opportunity for private companies and investors – whether acting independently or in collaboration with one or more institutions or schools – in markets where students are increasingly empowered and sophisticated consumers. As the Class of 2020, a leading think-tank on student housing in Europe, notes in its :

“Students are now seen as active consumers rather than passive tenants, and developers and investors are keen to tap into this potentially lucrative market.”

The connection to recruitment

Accommodation is one of the biggest costs associated with studying away from home, and is therefore an area students and their parents will look at carefully when deciding between institutions and locations. This may be particularly true when two institutions are comparable on other measures, but one stands out for the quality, comfort, or innovativeness of housing available to students.

This is especially the case for international students, who are not only living far from home but also surrounded by new cultures and languages. Safe, comfortable, and affordable housing is a must – both for the peace of mind of students and their families but also for academic success.

Whether a student is domestic or international, housing is a significant element of their study experience. Indeed, as many international educators know well, problems with accommodations can overshadow an otherwise exceptional programme, classroom, or campus. Students come to school to study, but they also carry hopes of having a great life experience, and it is difficult to achieve the latter without a comfortable, safe, and affordable place to live.

For educators, the availability of quality housing can be a key feature in the marketing and recruitment effort, a point that is well made by the recent example of Japan’s Takushoku University. The university opened a dormitory in 2012 at its Hachioji campus in western Tokyo, and in 2013, the Hachioji campus received three times as many applicants as there were available rooms. University official Mitsuo Nakahora told The Japan Times, “The existence of this dorm apparently convinces students to consider Takushoku as an option when they apply for university.”

Another Japanese institution, the Shibaura Institute of Technology, has also invested in student housing as part of its recruitment strategy. The school’s general manager of academic affairs Yong Jin Chung, also speaking to The Japan Times, said:

“Stable housing supply for students from abroad is part of the strategy to increase the number of international students and for the globalisation of our university.”

Some housing providers and institutions are taking this further by stepping up the accommodation offer with distinctive amenities or features, while others are targeting specific student needs or preferences. For example, University College Cork in Ireland offers for those who prefer the option, including any students whose cultures require them to abstain from alcohol.

Then there is Austria’s OeAD, which is now offering eco-friendly “pop-up dorms,” which they describe as “temporary, eco-friendly accommodations [made of] modern wood as well as recycled ship containers.”

The multinational investor

The purpose-built student housing complexes and apartments that are increasingly being opened by private developers all over the world do not look like the school dormitories of yesteryear. They are larger in scale, and most are meant to be lifestyle communities able to accommodate large numbers of students.

As the Class of 2020 Foundation explains:

“The European student housing investor is ambitious, building up a significant portfolio for economies of scale and operational models to work. Another parallel seems to be that strategies are truly international in order to spread risk and not be dependent on one country’s education policy.”

The Foundation notes that it is mainly the bigger properties and developments that attract such investor interest – “portfolios of 2,000 to 4,000 units” – and in larger cities where demand for student housing is higher.

Adding a further international dimension to the trend, such investments are increasingly made by multinational firms. Private investments in student housing in the UK, for instance, are said to come mainly from North America and increasingly, Asia and the Middle East.

US-based Greystar, for example, is a notable player in the UK housing market. With 400,000 beds in the US already, it has acquired a portfolio of 16,000 beds in the UK in only five months, with more to come. , meanwhile, has 100,000 managed student beds in the UK. There are several other large property management firms either developing or acquiring student housing blocks in the UK, and the UK student housing market is now considered “mature.”

Picking up on this point, the following illustration maps a spectrum of student housing investment in different markets around the world, ranging from examples of those that are “least mature” (which generally indicates an absence of purpose-built student housing) to “most mature,” where targeted, investor-backed housing for students is more common.

The evolution of the student housing market. Source: Class of 2020. Please note that the term “REIT” in the illustration above refers to Real Estate Investment Trust, a large-scale property investment fund that is analogous to a mutual fund in stock or bond markets.

Expansion in Europe

As some markets, notably the US and UK, continue to mature, private operators and investors are now expanding their operations elsewhere. The European Union as a whole is seeing more private investment in student housing. Yet Wouter Onclin, foundation manager of the Class of 2020, notes a continuing shortage of student housing in many EU cities.

He points out as well that European universities generally do not pursue partnerships with private property companies to the extent they might. He quotes Karin Helqvist of the University of Gothenburg in Sweden to make the point of why such partnerships may warrant more consideration by university administrators:

“With a lot of hard work, each year we manage to put a roof over international students’ heads. But what we don’t know is how many students decide not to come to Gothenburg because it is so hard to find a place to live.”

An uncertain regulatory environment appears to be playing a part here. Each local market in Europe has its own legal requirements governing student housing, and many governments are not yet familiar with the concept of private-public student housing projects. But , adds Mr Onclin in a recent interview with Study Travel Magazine:

“Differences between countries in Europe are still significant, and developers really have to get familiar with the local culture before entering a market. But if you have a good team of lawyers and tax accountants, the borders in Europe don’t really present a problem.”

Australia a hot market

Meanwhile, the pace of investment in Australia is also picking up dramatically, thanks to a situation where, according to The Australian Financial Review () only 54,000 purpose-built student bedrooms are available for the 1.2 million students enrolled in Australian higher education.

As AFR reports:

“Institutional investors have started taking major positions in the sector from the Government of Singapore Investment Corporation, which entered into a joint venture with Macquarie Capital to buy a stake in student accommodation provider Iglu, to UK-based Scape Student Living which, backed by Dutch Pension giant APG, has just purchased two prime sites in Melbourne and Brisbane for AUS$560 million worth of student accommodation.”

“With tertiary education being a key anchor of Australia’s economy, continued growth of international students from Asia and chronic shortage of purpose-built student accommodation, we strongly believe the sector provides superior risk-adjusted returns potential and is poised to become a mainstream asset class in the coming years,” added APG’s head of private real ­estate investments in the Asia Pacific, Sachin Doshi, in a recent interview with The Australian.

Other big players include Blue Sky (building 5,000 student beds over the next two years, in Brisbane, Melbourne, and Adelaide); (with 11,480 managed beds in Australia and New Zealand), and the multinational Campus Living Villages. All of these property developers and managers are acquiring real estate as close to school campuses as possible and they are building big.

This pattern of investment appears to have been accelerated by the recent slump in the Australian dollar, but it doesn’t hurt that municipal governments in Australia also see the potential of private investment to ease shortages of student housing. AFR adds that:

“In Brisbane, there are 2,086 student beds being assessed for development by the city’s council. More than 280 have been approved since the city’s Lord Mayor Graham Quirk introduced an 80% discount on infrastructure charges for student accommodation developments in February this year.”

“There is continued growth in demand for international students,” added Mayor Quirk. “We want to promote international education, which is Brisbane’s biggest export, but also expand options for domestic students seeking quality accommodation.”

UniLodge’s CEO, Peter Bates, meanwhile, recently told AFR he expects his business will double within five years.

The new competitive advantage?

makes reference to the fact that The Bologna Declaration has standardised many higher education programmes in Europe. Indeed, this is a key point: as programmes do become more standardised – think of the language school sector where commoditisation of general language courses is more and more of an issue – schools are obliged to compete on different dimensions.

Regardless of the degree of harmonisation or differentiation in programme offerings, there is an increasing awareness among educators of how key aspects of the student experience – including housing – can each represent an important source of competitive advantage.

The Class of 2020 notes that the student housing sector may take on characteristics of the hotel market, where consumers come to know and trust big brands.

Certainly right now, there is a race among multinational property investors and managers to claim their stake in the housing space. And it may not be so far in the future that students come to know prominent accommodation brands and choose accordingly.

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These are some of the key findings of a recent report from the European University Association (EUA). Trends 2015: Learning and Teaching in European Universities is the latest in a series of survey reports from the EUA, and the first since 2010.

It gathers responses from 451 institutions representing 46 countries and with a combined student body of roughly 10 million. This, notes the report, represents “more than half of the 17 million students studying at EUA member institutions, or about a quarter of the student body enrolled in the institutions of the European Higher Education Area. However, this percentage rises to 38% of the student population if Azerbaijan, Belarus, Ukraine and the Russian Federation are excluded from the sample due to their low response rates (the institutions that responded represented about 10% of the students in each of these countries).”

Student numbers on the up

Trends 2015 highlights the European Union’s commitment to educate at least 40% of 30-34 year-olds at degree level by 2020 – alongside an earlier research finding that 12 EU members had reached that level of higher education participation as of 2012 (relative to an EU average of 36% by that year). “Many countries in Europe,” the report adds, “have been interested in broadening participation and access to higher education.”

Perhaps it is therefore not surprising that 62% of survey respondents reported an increase in enrolment over the past five years with 42% reporting growth of more than 10% since 2010. In contrast, only 19% reported a decrease in student numbers with 9% indicating a decline of 10% or more.

“The largest enrolment gains are found in Belgium, Denmark, Norway, Switzerland and Turkey; smaller but still significant growth is expected in Austria, France, Germany, the Russian Federation and Ukraine,” adds the report. “The largest decreases are found in the Czech Republic, Lithuania, and Slovakia.”

This summary reflects a broader pattern of migration fueled in part by the prolonged economic crisis in Europe. The percentage of Europeans residing in another member state has been steadily increasing since 2010, resulting in two particularly notable flows of migrants from the south to the north, and, to an even greater extent, from the east to the west.

This reflects that economies in southern and eastern Europe have been more profoundly affected by the downturn, and this is indicated in the survey responses as well in that institutions in both regions reported greater impacts of economics and demographics on their current and future enrolment prospects.

“The weak economic outlook has been accompanied by an increase in youth unemployment in many parts of Europe,” adds Trends 2015. “It peaked at 50% in Spain and 60% in Greece in 2014 and was estimated to have reached five million across the European Union in August 2014.

This has prompted many governments, the European Commission and the Organisation for Economic Co‑operation and Development (OECD) to emphasise the need for closer links between universities and industry, to stress innovation policies and graduate employability.”

It has also, it would appear, contributed to an increasing demand for professional qualifications among European students. Nearly four in ten survey respondents (38%) reported increased demand over the last five years for studies leading to a professional degree in fields such as business, engineering, or law.

Internationalising the student body

Nearly all respondents indicated they have an internationalisation strategy in place: 50% have a specialised international strategy already, 8% intend to develop one, and 35% have incorporated internationalisation as an element of a broader institutional strategy.

Not surprisingly, most European universities cite the EU as the primary geographic target of their international activities, including exchange programmes, international recruitment, joint programmes, and other cross-border links. After the EU, Asia and the Americas are the next most-reported geographic targets.

The following chart provides a little more nuance for the earlier finding of increased enrolment for a majority of responding institutions. It highlights that 69% of European universities reported an increase in non-EU enrolment since 2010. Riding along with this, 64% also indicated an increase in enrolment by EU students. “The growth of international students, both EU and non-EU, is the most frequent change that has occurred,” adds the report, “notably in Austria, Ireland, Lithuania, the Netherlands, Norway, Poland, Portugal, Switzerland and Turkey.”

The changing composition of the student body of European universities, 2010 to 2015. Source: European University Association

When asked what they felt most contributed to any increase in enrolment since 2010, respondents cited “stronger emphasis on widening access and participation” (41%), “international recruitment” (39%), and “changes in admissions policies” (28%) as the top factors.

Main reasons for increased enrolment since 2010. Source: European University Association

The report highlights a related research finding that expanded international recruitment has become an increasingly common response to the economic crisis for European universities, both as a means to increase revenue and diversify funding sources.

Trends 2015 acknowledges that expanded international recruitment may be linked to the possibility of recovering higher fees from non-EU students but notes as well that recruitment activity is on the rise even in countries without such fee differentials.

“The new economic reality – the economic crisis, youth unemployment, the requirements of the knowledge society, globalisation – has led to renewed and additional emphasis on increasing student participation,” concludes the report.

“The composition of the student body is changing as a result of institutional strategies, particularly due to the major efforts being undertaken to recruit international students from both EU and non-EU countries…Where drops in enrolments occur, they are attributed to demographic change and the students’ financial situation, especially in eastern and southern Europe.”

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