How Starmer's immigration crackdown could kill off the Mickey Mouse degree

Yahoo

2 days ago

In 1999, Tony Blair pledged that half of young people would go to university. The sector mushroomed, producing a rash of so-called 'Mickey Mouse degrees' – those useless, and now very expensive, courses that result in low salaries and few job prospects.
But they may finally be under threat – from a Labour government.
Sir Keir Starmer announced in May that universities would face tighter restrictions on recruiting overseas students as part of a wider push to reduce immigration.
Under the reforms, universities would face a levy on fee income from international students and stricter restrictions on how long students can remain in the UK after they graduate.
Telegraph analysis has identified more than a dozen universities that rely on foreign students for more than half their fee income, and whose graduates typically earn salaries of less than £30,000 five years after graduation. The table below shows these universities:
Karl Williams, of the Centre for Policy Studies think tank, accused universities of 'papering over the cracks in their funding through foreign students', who they can charge unlimited fees.
He said: 'Poor graduate salaries show that all too often the courses universities offer – both to domestic and international students – do not provide the outcomes students are hoping for.
'The only way to encourage universities to improve their courses and get themselves on a more sustainable financial footing is to clamp down on student numbers and create an immigration system which truly does attract the best and brightest.'
Charging higher fees to foreign students to subsidise domestic ones is not unusual when compared to universities in Canada, Australia and the US. However, British universities have been hamstrung by a freeze on tuition fees since they were introduced in 2012.
Professor Brian Hall, who chairs the Migration Advisory Committee, said: 'When tuition fees were introduced, universities could break even on their domestic students, and international students were a nice-to-have.
'Since then, universities have been told to keep their prices steady while paying higher pension, salary and building costs.'
Universities therefore responded by introducing more cheap-to-run courses such as business studies, as opposed to engineering, and recruiting more students from abroad. But this approach is fast reaching its limit, and universities are already going bust.
Prof Hall said: 'When inflation reached 10pc in 2022, that was the final nail in the coffin. The model can't continue in its current form, and I worry about some of the lower-ranked universities.
'If they push up their prices any more, they will see a reduction in the number of students applying.'
Even after the coalition government granted universities the power to charge thousands of pounds a year for tuition, universities have plainly struggled to balance the books against a ballooning number of students.
Just as Sir Tony envisioned, the number of successful applications through the University and College Admissions system in Britain ballooned from 335,000 in 1999 to a peak of 570,000 in 2020.
Meanwhile, visas granted to overseas students reached a peak of 484,000 in 2022, with record numbers of Chinese and Indian students offsetting a decline in those from the EU after Brexit. A government report noted that the growth in the student population since 2020 'has been driven by increases in overseas students on postgraduate taught courses'.
The total amount foreign students have paid through uncapped fees has more than doubled from £5.3bn to £11.6bn between 2017 and 2024. Meanwhile, domestic fees have increased by just £2.5bn in the same period, from £10.5bn to £13bn.
Eyebrows have been raised at the merit of the courses for which universities charge full price, not least at media courses with modules on Disney, which would leave a typical graduate earning below minimum wage for five years.
Nick Hillman, of the Higher Education Policy Institute, said Labour's white paper 'absolutely might mean some less prestigious courses are closed down'.
He added: 'There are a lot of universities in the middle of the league table which are kept going by international students, and demand for their courses is very dependent on immigration policy.
'You have some courses where international students are propping up the course, and it probably applies to the very prestigious courses at the other end of the spectrum as well.'
Universities reliant on a high number of students from Pakistan, India and Nigeria would be especially hit by restrictions on how long graduates can remain in the UK, Mr Hillman added.
In the 2023-24 financial year, the most recent for which data is available, one in three universities relied on foreign cash for over half their fee income, Telegraph analysis shows.
These include 17 universities where a typical graduate earns a salary of less than £30,000 in five years, according to the Higher Education Statistics Agency (HESA).
Among them is the University of the Arts, London, which made £242m in fees from foreign students in 2024, up from £91m in 2017. A typical UAL graduate's salary five years after graduation is £26,300 a year, according to HESA.
A UAL spokesman said: 'The UK's creative industries are a huge contributor to the economy and the UK's status as a global creative leader must not be taken for granted.
'Measures of graduate success that focus narrowly on immediate post-university salary fail to reflect the realities of the creative industries.'
Shadow education minister, Neil O'Brien, called on Labour to 'ensure that our higher education sector upholds the quality and global reputation it deserves'.
He added: 'We have long warned that too many universities have prioritised revenue over rigour, offering low-value degrees to foreign students simply to boost their income.'
The crackdown on universities' reliance on overseas students comes a year after Rishi Sunak pledged to scrap 'rip-off' degrees that the former prime minister claimed 'make students poorer', in favour of more funding for high-skill apprenticeships.
Edinburgh Napier University similarly relies on overseas students for two-thirds of its fee income. The university raked in £46m from foreign students in 2023-24. However, a typical ENU graduate earns £29,200 a year five years after graduation.
A university spokesman said: 'We are proud of our international students, who enhance the success of Edinburgh Napier and enrich the university experience for all. ENU graduates continue to make a positive difference to people's lives across a wide range of sectors around the world.'
Universities UK, which represents all universities in England and Wales, argued there was 'no such thing as a Mickey Mouse university', and that measuring a university's quality by graduate salaries was too simplistic.
A spokesman said: 'Some of the institutions named here are world-renowned in specialist fields like music, art or dance, while others do the vital job of training nurses and teachers – all are necessary for the country to thrive.
'The financial challenges facing universities stem from falling per-student funding, visa changes which have decreased international enrolments, and a longstanding failure of research grants to cover costs.
'However, it is simply wrong to pinpoint these institutions as particularly at risk, given the diverse range of income streams universities have.'
A spokesman for the Office for Students said: 'We recognise that universities and colleges are facing increased financial challenges.
'However, we have repeatedly been clear that they should be alive to the risk of over-reliance on fee income from international students, particularly when recruitment is predominantly from a single country.'
A government spokesman said: 'Students rightly expect a high-quality education, and the Office for Students has powers to protect their interests. In line with our mission to drive up standards through our Plan for Change, we have asked the OfS to make that work a priority.
'Our reforms will ensure value for money for students while delivering the high-quality education they deserve and ensuring universities play their part in driving economic growth.
'The Education Secretary and the OfS have been clear that many institutions will need to change their business models to ensure they remain financially sustainable.'
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