{"id":173322,"date":"2025-09-22T05:48:15","date_gmt":"2025-09-22T05:48:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/173322\/"},"modified":"2025-09-22T05:48:15","modified_gmt":"2025-09-22T05:48:15","slug":"the-shadow-economy-behind-the-international-student-boom","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/173322\/","title":{"rendered":"The shadow economy behind the international student boom"},"content":{"rendered":"<p>Gawdham Melath, an Indian undergraduate at Anglia Ruskin University, came to the UK full of optimism about a British education. But he quickly became disillusioned by the steep fees and cost of living.<\/p>\n<p>For Melath, who now campaigns against the exploitation of international students,\u00a0the problem is some unregulated agencies that sell foreign students a rose-tinted version of life in the UK. Agents say, \u201cYou will easily find a job. When you work 20 hours you will get this much money. This much you can save. This much you can pay for rent,\u201d he adds. \u201cBut when they arrive here, everything is entirely different.\u201d<\/p>\n<p>Universities in the UK and elsewhere have come to rely on international students like Melath, who pay around three times as much as their domestic counterparts to study the same courses.<\/p>\n<p>In Britain, fees from foreign students generate about a quarter of total university income. It is a similar story in Australia, where the A$51bn ($34bn) international education sector is now more valuable than its gold exports. <\/p>\n<p>The demand, both from overseas students and the universities eager to enrol them, has fuelled a booming secondary economy, where universities pay agents commission fees to recruit students like Melath from global destinations, particularly in Asia and Africa.\u00a0<\/p>\n<p>These agents operate on behalf of universities in a range of countries. In 2024, 75 per cent of US universities used commission-based agents, up from 37 per cent in 2016, according to the Association of International Enrollment Management. Agents can earn commission equal to between 10 and 30 per cent of each student\u2019s first year of tuition fees.<\/p>\n<p>But a global tightening of international student rules amid an immigration backlash has brought fresh scrutiny of unregulated agents, who critics say are selling lofty promises that can push students into heavy debt.<\/p>\n<p><a href=\"#25142994\"><\/p>\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/https:\/\/public.flourish.studio\/visualisation\/25142994\/thumbnail\" alt=\"\"\/><\/a><\/p>\n<p>Melath believes some agents \u201conly show the good part\u201d and play down the financial challenges of studying abroad. As a result, many students are forced to overwork to meet repayments. In some cases, students have lost their places after their attendance fell below standards. \u201cThey are focusing on work rather than coming to class,\u201d says Melath. <\/p>\n<p>The contribution of these students to the bottom lines of cash-strapped universities has also incentivised some higher education providers to enter into franchising partnerships to attract more of them. This \u201ccreates risks for students and taxpayers\u201d, British MPs have <a href=\"https:\/\/publications.parliament.uk\/pa\/cm5804\/cmselect\/cmpubacc\/455\/report.html\" data-trackable=\"link\" rel=\"nofollow noopener\" target=\"_blank\">warned<\/a>, opening the door to fraud and abuse of the student loan system.\u00a0<\/p>\n<p>Agents \u201cmay not make it clear what students get for their money\u201d, the UK parliament\u2019s House of Commons public accounts committee has said, while \u201cthere are incentives to recruit numbers rather than ensuring students enrol on the most suitable courses\u201d.\u00a0<\/p>\n<p>The British government is toughening its approach to student migration, most recently by texting tens of thousands of foreign students, warning them not to outstay their visas.\u00a0<\/p>\n<p>With universities now required to register for a code of conduct governing agents, the lucrative system that has built up around overseas students may be about to unravel. <\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/8dc83aba-1788-438f-a30c-3d35ccd55b83.jpg\" alt=\"Gawdham Melath reads a book in a library aisle\" data-image-type=\"image\" width=\"2159\" height=\"1439\" loading=\"lazy\"\/>Foreign student Gawdham Melath. Universities in the UK and elsewhere have come to rely on international students like Melath, who pay up to three times as much as their domestic counterparts to study the same course \u00a9 Charlie Bibby\/FT<\/p>\n<p>The consequences for Britain\u2019s university sector \u2014 and its attractiveness as a global education destination, already <a href=\"https:\/\/www.ft.com\/content\/e6ca7f7b-872d-4be8-8693-03bdc85e6a8a\" data-trackable=\"link\" rel=\"nofollow noopener\" target=\"_blank\">hit by waning demand<\/a> \u2014 may be profound.<\/p>\n<p>Mandating these new measures \u201cis one of the clearest signals yet that international student recruitment in the UK is entering a new era\u201d, says Vincenzo Raimo, a veteran higher education consultant.<\/p>\n<p>But, he warns, \u201cif British universities treat the new measures as a box-ticking exercise rather than a chance to rethink how they recruit the UK risks undermining both its reputation and attractiveness to international students at exactly the moment global competition is intensifying.\u201d<\/p>\n<p>Student migration to Britain peaked in 2022, with 484,000 sponsored study visas issued \u2014 double the number in 2018. The bulk of growth was driven by countries outside the EU. <\/p>\n<p>The introduction of the Graduate Route visa in 2021, which offered foreign graduates two years to work in Britain, pushed numbers higher. In 2023-24, 732,285 students, or 23 per cent of the total student population, were from overseas.<\/p>\n<p>The surge has been a much-needed source of revenue for British universities. Unlike international fees, which have risen freely, domestic tuition was capped at \u00a39,250 a year from 2017 until it was raised to \u00a39,535 this autumn. <\/p>\n<p><a href=\"#24855790\"><\/p>\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/https:\/\/public.flourish.studio\/visualisation\/24855790\/thumbnail\" alt=\"\"\/><\/a><\/p>\n<p>Competition for overseas students has been fierce, fuelling an increase in the number of agents. Today, such agencies collectively refer two-thirds of foreign students to UK institutions, according to Enroly, a platform that supports universities in recruiting abroad.<\/p>\n<p>As a result, they have significant influence. Some universities have sent academics overseas not just to woo students but also to court the in-country agents who have the power to nudge applicants towards their rivals. One lecturer at Queen Mary University of London says he has visited Istanbul twice on \u201cconversion trips\u201d.<\/p>\n<p>By day, he pitched Queen Mary to Turkish students, some of whom had come from families who remortgaged their homes to pay for tuition. At night, he wined and dined agents. \u201cIt\u2019s weird \u2014 we pay agents to get our students from abroad, but we also have to keep them sweet,\u201d says the academic, who requested anonymity in order to speak freely.<\/p>\n<p>But some academics worry that the focus on foreign students is going too far. At Queen Mary, some lecturers say the university is prioritising recruitment over support for existing students.<\/p>\n<p>\u201cMoney isn\u2019t going to the actual work of research and education,\u201d says Liesbeth Corens, a history lecturer at Queen Mary, but towards surplus reserves that help the university maintain its estates and act as a buffer against sector volatility.\u00a0\u00a0<\/p>\n<p>Corens criticises the university\u2019s hiring of three new international student recruitment staff while it is implementing voluntary severance schemes and departmental mergers, forcing staff to teach bigger classes with slimmed-down budgets.\u00a0Queen Mary did not respond to request for comment by the time of publication. <\/p>\n<p>Those without the brand prestige of Queen Mary, part of the UK\u2019s high-ranking Russell Group universities, must rely on marketing strategies and courses to win students, says Joshua Brown, an education professor at Johns Hopkins University in Baltimore. \u201cAnd if those enrolments don\u2019t hit, they\u2019re in trouble.\u201d<\/p>\n<p>Coventry University, for example, where tuition fees account for 80 per cent of income compared to Queen Mary\u2019s 55 per cent, has spent lavishly on agents. In 2022-23, when Coventry had 396 agency partnerships, it spent \u00a355mn \u2014 12 per cent of its expenditure \u2014 on paying commission. In the following year, agent commission totalled \u00a345mn. <\/p>\n<p>\u201cIt must spend to feed the beast,\u201d says John Connolly, whose company feezy.io digitises universities\u2019 agent contracts. \u201cWhen an agent says we\u2019d like 3 per cent more [in commission], it really takes a brave member of staff to say no and risk losing the agent.\u201d Coventry says this is a sector issue and declined to comment further.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/5a373d92-4447-48b5-b0c1-db2c4d3bb767.jpg\" alt=\"Awesome Olasope stands outside London Metropolitan University, dressed in a white shirt and green cap\" data-image-type=\"image\" width=\"2287\" height=\"1525\" loading=\"lazy\"\/>Awesome Olasope, outgoing student union president of London Metropolitan university, says some agents see their work as \u2018a quick moneymaking scheme\u2019 \u00a9 Charlie Bibby\/FT<\/p>\n<p>The risks of the system fall on those who can least afford them.<a href=\"https:\/\/www.ft.com\/content\/be96d657-726b-45db-ba9c-abc48b0ce677\" data-trackable=\"link\" rel=\"nofollow noopener\" target=\"_blank\"> Some students have felt misled<\/a> by agents pushing unrealistic assurances about job and immigration prospects. <\/p>\n<p>Awesome Olasope, outgoing student union president of London Metropolitan university, which has one of the highest dropout rates of UK universities, says some agents see their work as \u201ca quick moneymaking scheme\u201d.<\/p>\n<p>\u201cThey may not give entirely accurate information and say it\u2019s going to be fine\u2009.\u2009.\u2009.\u2009you will figure it out,\u201d he adds. The university says it works with \u201ctrusted agents\u201d and employs \u201crobust checks to ensure compliance with immigration rules\u201d.<\/p>\n<p>Brent Morris, managing director at agent Sable International Study Abroad, argues agents invest many months in supporting clients and ensuring they fit their course, because agents are only paid once the student has successfully enrolled. A single dropout costs \u201chundreds of pounds per student in adviser time, processing, marketing and events\u201d.<\/p>\n<p>The UK\u2019s new code of conduct regarding agents \u2014 the Agent Quality Framework \u2014 is intended to clean up the system. But critics warn it will be challenging to police the biggest players \u2014 especially as many now use intermediaries known as \u201cagent aggregators\u201d to find students, making oversight even harder.\u00a0<\/p>\n<p>Since launching in 2023, the AQF does not seem to have improved accountability and visibility of these contractors, Connolly says. \u201cUniversities\u2019 stretched teams lack the capability to implement it properly.\u201d<\/p>\n<p>In June, the UK introduced a space to name the agent on the official confirmation form that students need to enter the country \u2014 but it is voluntary. <\/p>\n<p>Jamie Arrowsmith, director of Universities UK International, says the changes could be \u201creally powerful\u00a0if properly implemented\u201d by enabling universities to monitor the outcomes of agent-recruited students. But the AQF is only a \u201cdevelopmental framework,\u201d he adds. \u201cIt\u2019s not yet embedded in regulation, and it isn\u2019t a magic bullet.\u201d<\/p>\n<p>Meanwhile, the UK\u2019s tighter enforcement on visa approvals and other laws will \u201cstop bad actors gaming the system once and for all\u201d, the Department for Education says.<\/p>\n<p>Some universities rely on other ways to boost intake without adding pressure on their own facilities or staff. This includes franchising their degrees to private providers at home and abroad.<\/p>\n<p>What began in the 1990s as a niche option for universities struggling to fill quotas has became a popular revenue-raiser in the sector, with 110 universities and colleges using it in 2022-23, according to the Office for Students, England\u2019s higher education watchdog.<\/p>\n<p>The franchisee teaches the course while the lead institution, which awards the degree, retains between 12.5 and 30 per cent of the student\u2019s tuition fee, according to the Comptroller and Auditor General.<\/p>\n<p>The number of students enrolling on franchised courses more than<a href=\"https:\/\/www.ft.com\/content\/f7ff474c-4934-47c2-bcde-2effb9ffe0d4\" data-trackable=\"link\" rel=\"nofollow noopener\" target=\"_blank\"> doubled to over 130,000 in 2024-25<\/a> compared with 2018-2019, according to official figures. Analysis from 2022-23 by the OfS shows 55 per cent of students on franchised courses have either zero or unknown qualifications.<\/p>\n<p>A former student recruitment consultant at franchised providers, who asked to remain anonymous as they work for higher education institutions, says franchisees face minimal scrutiny: \u201cYou get students enrolled on courses, often not passing degrees, but they keep taking the money from the student loan book.\u201d<\/p>\n<p>At Buckinghamshire New University, the age of franchise-fuelled growth is over. At its peak in 2023-24, it had 14,500 franchised students \u2014 the most of any UK university \u2014 compared with 6,400 enrolled on its main campus.<\/p>\n<p>Vice-chancellor Damien Page, who started the role in February, says this was \u201cmassively out of proportion\u201d and plans to cut franchised provision by 85 per cent by 2028-29, reducing total income by \u00a320mn. \u201cIf you\u2019ve got a \u00a320mn risk, and our net income is about \u00a3100mn, you\u2019re talking about a significant proportion.\u201d<\/p>\n<p>The National Audit Office\u2019s investigation into student finance at franchised providers last year found \u201cthere is insufficient evidence that students are attending their courses\u201d \u2014 which in theory determines access to loans \u2014 with some providers using \u201cagents or cash bonuses to persuade students to sign up to courses\u201d. It called for the sector to investigate anomalies \u201cas a matter of urgency\u201d.<\/p>\n<p><a href=\"#25156113\"><\/p>\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/https:\/\/public.flourish.studio\/visualisation\/25156113\/thumbnail\" alt=\"\"\/><\/a><\/p>\n<p>Page argues franchising \u2014 where students are disproportionately from poorer backgrounds \u2014 has been oversold as a means for widening participation. In reality, he says, it often leaves students behind, with outcomes \u201ctaking down our overall metrics\u201d.<\/p>\n<p>Staff were never comfortable with the franchise-heavy model, he says. \u201cVoices were raised about their concerns, the things they saw and practices that didn\u2019t align with our values, but they weren\u2019t listened to,\u201d he adds. \u201cNow we live or die by our own work. We\u2019re not going to be reliant on other organisations. I would advise any other university with large franchise numbers to do the same.\u201d Buckinghamshire cut ties earlier this year with five of its former private franchise partners.<\/p>\n<p>Even so, other universities are continuing to explore franchise models. For Queen Mary\u2019s new \u201cInternational Year One\u201d in business and management, for example, it will outsource the teaching and recruitment for the programme to Kaplan International College, a for-profit group offering pathway courses into higher education. <\/p>\n<p>Taught at Kaplan\u2019s centre in London Bridge, the one-year course will enable foreign students to move straight on to the second year of Queen Mary\u2019s business management undergraduate degree. Kaplan\u2019s tuition fee is about \u00a39,000 cheaper and requires lower entry grades and English language qualifications.\u00a0<\/p>\n<p>Queen Mary academics fear the Kaplan pathway, billed as the only one of its kind leading to a London Russell Group university, will not improve the academic preparedness of students.<\/p>\n<p>In some classes at Queen Mary, international students are in the majority, meaning academics have had to adapt, says the lecturer who asked not to be named. Teaching certain classes with limited English language skills is \u201cdemoralising\u201d, he adds. Queen Mary accounting lecturer Chandres Tejura said he was \u201cflabbergasted\u201d when he experienced one student live-translating with their phone.<\/p>\n<p>The future of international student recruitment could hinge on whether the UK can tighten compliance without undermining its attractiveness. Foreign students are a hugely valuable group not only for universities, but also to British employers who could benefit from young, international talent plugging skills gaps.<\/p>\n<p>Pressure to reduce migration has already prompted the government to place limits on overseas students. In 2024, the then Conservative government banned international students from bringing family members with them. Then the Labour government announced plans in May to reduce the length of a Graduate Route visa from two years to 18 months.\u00a0\u00a0<\/p>\n<p>Naz Panju, a UK-based agent, warns clampdowns on international intake may have cut net migration figures, but the government has only \u201ctaken the golden goose and killed it\u201d.<\/p>\n<p>Charlie Ball, head of labour market intelligence at Jisc, a non-profit providing digital infrastructure in higher education, says: \u201cWe should be proud of being the destination of choice for so many of the globe\u2019s young high achievers and we ought to be thinking of ways to keep them.\u201d The gross export value of higher education from international students is \u00a320.1bn a year, according to think-tank Public First.<\/p>\n<p>The volatility of foreign student markets could push universities to strategise more on appealing to home students. International student fees look handsome on paper, but shrink significantly once generous scholarships and hefty agent commissions are stripped out.<\/p>\n<p><a href=\"#24792915\"><\/p>\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/https:\/\/public.flourish.studio\/visualisation\/24792915\/thumbnail\" alt=\"\"\/><\/a><\/p>\n<p>Despite worries over the role of agents, a global survey of university leaders by Navitas and Nous Group shows 24 per cent will increase investment in agent commissions and incentives, but down from 30 per cent in 2022.<\/p>\n<p>Margins will keep depleting, says Connolly. As student flows and fees become increasingly volatile, universities \u201cwill need to be able to say we tried everything\u201d, he adds. \u201cIt means more vice-chancellors and senior people shaking hands with agents.\u201d<\/p>\n<p>Yet for some students, the investment is no longer worth it. Puneeth Gowda, an Indian national, had to work evening shifts to cover his \u00a316,500 tuition loan for a masters degree in motorsports engineering at Oxford Brookes.<\/p>\n<p>Although he has since secured a job in the UK, he says most of his course mates have not. For students from poorer Asian backgrounds, \u201c[Coming to the UK] is a waste of money\u201d, he warns. \u201cIf you don\u2019t get the right kind of work, it\u2019s better to give up the dream.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Gawdham Melath, an Indian undergraduate at Anglia Ruskin University, came to the UK full of optimism about a&hellip;\n","protected":false},"author":2,"featured_media":173323,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-173322","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/173322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=173322"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/173322\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/173323"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=173322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=173322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=173322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}