Some of the greatest losses resulting from Britain’s departure from the EU will never be counted: the friendships that never happened, the relationships that never took place, and the ideas that were never shared. EU students studying in the UK have been a welcome source of all three for young Britons. But, in a time of stretched budgets and with Brexit approaching, the UK government must consider the fiscal cost of continuing to give preferential treatment to EU undergraduates.
Damian Hinds, the education secretary, is reported to have proposed allowing universities to lift the cap on fees for students from the EU27. At present, they pay the same as British students. At English universities they can benefit from a generous government loan system: the UK government lent £490m in the 2017-2018 academic year to EU students. Whether because they are unemployed or because British authorities are unable to trace them, EU27 graduates are twice as likely not to repay these subsidised loans as Britons of the same age.
So long as the UK is a member of the EU there is little controversial about these arrangements. More EU citizens take advantage of rights to study in Britain than vice versa, but the UK is more than compensated through a disproportionate share of research funding from EU bodies — worth £760m in 2017/18. Fewer British students take advantage of the Erasmus exchange programme, but that largely reflects poor language teaching.
Rather than threatening to remove the cap, it would be better for the UK to offer to allow EU students to continue to benefit from it. Outside the EU, however, Britain would have no obligation to offer such access and it is only fair that it should be on a reciprocal basis. UK students should continue to enjoy rights to study in the EU at local rates and participate in EU exchange programmes. The UK should also take part in and receive EU research grants.
British negotiators should seek to enshrine this relationship in a broader deal on future relations with the EU. Knowledge cannot be constrained by borders, and Europe as a whole benefits from any individual country’s research: an idea generated in Cambridge can help a pharmaceutical company in Munich, for example.
In the absence of such a deal, the UK would need to decide what action to take. Without reciprocal EU access, there would be no reason to continue to offer often wealthy EU27 students reduced fees and subsidised loans that are not available to their American, Indian or Chinese peers. The UK would have an opportunity to redistribute funds currently spent on EU students and use a portion to seek out talent and offer opportunities to poorer students from anywhere in the world.
Either way, there was little need for the government to launch a public discussion now. Prospective EU students are already looking warily at Britain and wondering how welcoming it might be. Arrangements would remain unchanged during the transition period that is likely under any orderly version of Brexit. That the issue has come up now may be a symptom of too many ministers looking for ways to talk tough on immigration.
Britain’s universities are a rare export success for its services-driven economy. The country is the second most popular destination for international students after the US. Officials estimate higher education exports were worth roughly £13.4bn in 2016. As well as the monetary benefits the UK gains soft power and ties of affection with future business leaders, technocrats and politicians. Whatever happens, Britain will need these friends.