How graduate visa scheme helped attract foreign students to UK

The UK government’s independent adviser on migration concluded a 14-week investigation into the UK’s visa graduate programme on Tuesday and its findings were categorical: the scheme should remain in place.

The Migration Advisory Committee’s report was commissioned by home secretary James Cleverly in March in response to concerns that the route, which allows overseas students to stay in the UK for two years after graduation, was leading to politically unsustainable levels of immigration.

The MAC’s clear findings, including that there is “no evidence” of deliberate abuse of the scheme, has placed Prime Minister Rishi Sunak in a bind, forcing him to either confront those on the Conservative right who want it scrapped, or ignore the advisory group.

Why all the fuss over graduates?

Sunak has been under pressure over the levels of legal net migration into the UK after numbers last year showed a record 745,000 for the year to June 2022, and 670,000 in the year to June 2023.

The number of foreign students staying to work after graduation increased sharply after the “graduate visa route” was introduced in 2021. More than 114,000 people claimed a graduate visa last year, almost 18 times higher than those who stayed in the UK after being sponsored for a job in 2020, the last year before the scheme was introduced.

In response to the surge in net migration, Cleverly announced a package of reforms in December. These included removing the rights of students starting one-year masters courses to bring over family members, and sharply raising salary thresholds for employers sponsoring skilled workers’ visas.

Cleverly also asked the MAC to investigate the case for making changes to the graduate route. His letter to MAC chair Professor Brian Bell raised two chief concerns.

Firstly, that the reputation of UK universities as high-quality providers of education was “at risk” if foreign students were coming “through a desire for immigration rather than education”.

The second concern — one directly addressed in the MAC report — was that too many international students were going into low-value occupations, such as social care, when switching from graduate to skilled visas.

Cleverly said this was not what the government intended when it reintroduced the graduate route in 2021 — an earlier version was abolished in 2012 — to “attract the best and brightest students”.

What did the Migration Advisory Committee find?

The chief finding was clear: the graduate route was not being abused.

It found the scheme worked as intended, attracting students to the UK and helping them stay with no evidence of significant rule-breaking. Graduate visa holders swiftly found similar jobs to those of British graduates, with similar earnings. 

Application levels are already falling, in part because of changes on dependants and salary thresholds, on top of other issues such as a Nigerian currency crisis that made it more expensive for Nigerian students to fund places at UK universities.

A larger issue the report raised is that universities depend on international student fees to cross-subsidise domestic students, and any change would further exacerbate the funding crisis in the sector.

There were some caveats. The first was that there was some evidence that unscrupulous recruitment agents were mis-selling courses. It said these should be subject to tighter regulation.

Secondly, the majority of the growth in graduate visas is to lower-ranked universities outside the elite Russell Group, something that might not fit with the idea of retaining the “brightest and best” students — even though this term is not clearly defined by ministers. 

Bell noted that some very able students from poorer countries might choose lower-ranked universities, which have lower fees, for cost reasons.

The MAC also said that the data Cleverly previously cited — that about half of overseas graduates switched to social care — was wrong. The actual figure is about 20 per cent. 

Bell said the skew towards care work was “almost inevitable”, given that the sector faces a lower salary threshold than other industries for students to remain after the two years.

Some graduates interviewed by the committee were struggling to find work to fit their qualifications. The MAC said that some employers were unaware of the route’s existence, and others might be reluctant to hire people who would need a large pay rise two years later in order to stay on.

International students could also be putting upward pressure on housing costs, the committee noted — echoing other economists who believe high net migration has been a big factor driving up rental prices over the past two years. 

However, it added that migrants were also likely to pay more tax than they consumed in public services, especially given the rule changes that would prevent students bringing children in future. 

What will Rishi Sunak’s government do?

After the report, Downing Street and Cleverly are set to make a decision on whether to close or limit the graduate visa route in the coming weeks. They are under severe pressure from warring factions of their party. 

“Any changes to the graduate visa route should be properly informed by the evidence and the review,” a Labour spokesperson said. The university sector has also lobbied furiously against any changes, and welcomed Tuesday’s report.

Cabinet ministers have long been divided over whether to restrict the route. Backers of the current scheme include education secretary Gillian Keegan and chancellor Jeremy Hunt.

Yet despite support from cabinet heavyweights, Sunak faces opposition from the right of his party. Robert Jenrick, the former immigration minister and a staunch critic of government immigration policy, has told colleagues that the MAC report was a “stitch-up”.

He argued this on the grounds the body was not asked to review the government’s goal of attracting 600,000 foreign students per year, and was asked to assess the extent of abuse in the visa system, rather than the social and economic impact of this type of migration.

“The MAC’s conclusions have clearly been constrained by the narrow terms of reference deliberately set by the government,” Jenrick, who is seen as a potential future leadership candidate for the Tory party, wrote on Twitter. “If you order white paint, you get a whitewash.”