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Last Updated: Thursday, 12 July 2007, 12:09 GMT 13:09 UK
Call for foreign student subsidy
Graduation ceremony
Hepi says it is in the national interest to subsidise places
UK taxpayers should subsidise overseas students who want to study here, a higher education body is arguing.

The Higher Education Policy Institute (Hepi) says high fees might put off foreign students, who bring economic benefits to the country.

Non-EU students pay much higher tuition fees than British students, although EU students pay the same.

The government says the current system works well and it has no plans to change it: universities set their fees.

A report from Hepi says the economic benefits of attracting more students far outweighs the cost.

This is because students pay fees and spend money on food and rent. Once they have graduated, they might work in the UK and pay taxes here, the report says.

International students from non-EU countries pay at least 3.3bn a year on tuition fees and living expenses, the researchers estimate.

And even if every EU student refused to pay back the UK government loans they are entitled to receive for tuition fees, the economy would still benefit, the report said.

"It is clear that it is well worth maximising the number of both EU and non-EU international students, it said.

"Even if there were no other benefit, both groups provide substantially more, financially, than they consume."

Cultural benefits

The authors warn that international students might be put off from coming to Britain by the fees, when countries such as Germany offer free education.

Higher education minister Bill Rammell said there were no plans to change the system.

"We have a world class system of higher education which is attractive to overseas students who not only make a valuable financial contribution to the UK higher education sector and economy but also bring other cultural, research, trade and diplomatic and benefits.

"Institutions are free to set their own fee rates for overseas' students. The demand for places from domestic students exceeds supply - with more funding, our priority would be to create room for them rather than subsidise those from overseas."

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