Research reveals benefits of the UK Graduate Route visa

A new report highlights the net benefits of the visa scheme to the UK Exchequer.

For a limited number of years after graduating, the visa allows international students to stay in the UK.

A new report - published by Higher Education Policy Institute (HEPI), Kaplan International Pathways and the National Union of Students, and undertaken by London Economics - discusses the fiscal benefit in the first full tax year after the Graduate Route visa was introduced in 2022/23.

Taking into account tax revenues and costs of hosting Graduate Route visa holders, the total net benefit to the Exchequer is estimated to be £70mln (or £1,240 per international graduate), disproving claims that the UK loses out financially.

The financial benefits are due to increase by over five times the level in the first full year, with the Home Office estimating 173,000 Graduate Route visas being granted in 2023/24 and slightly more the year after.

This means more than 350,000 Graduate Route visa holders could be in the UK by April 2025.

The report aims to provide added information the Migration Advisory Committee (MAC) after the Home Office asked them to review the Graduate Route.

Nick Hillman, Director of HEPI, spoke about the limited timeframe MAC were given. ‘The MAC’s review of the Graduate Route visa is very compressed in terms of time, at the government’s insistence. So there has been no call for evidence and there is a real risk that important decisions will be taken on the basis of little robust evidence.

We believe it is vitally important that policy recommendations are rooted in the best knowledge that can be obtained. So we have worked hard and rapidly in concert with others to provide the key facts on how the Graduate Route visa has been operating.’

The visa is a key reason for international students choosing the UK as a place to study. It also increases the UK’s 'soft power'. According to HEPI’s latest annual Soft-Power Index, one quarter of the world’s countries are led by someone formerly educated in the UK’s tertiary education sector.

Hillman is cautious about scrapping the scheme. ‘If…the Graduate Route visa is severely restricted or even abolished, as has been rumoured, then fewer international students will come to the UK in the first place, damaging our universities, our economy and our soft power,’ he says.

‘Tougher rules would mean employers in the public and private sectors find it harder to recruit the skilled employees they need.’