British universities risk becoming too expensive for overseas students and are losing their grip on the market, a report published today suggests.

Research comparing leading universities in 11 countries found that it cost more to study in England, for example, than anywhere else, other than the US.

Fees paid by international students account for 8 per cent of income earned by universities across Britain, according to the report by the Higher Education Policy Institute (Hepi).

Soaring numbers of students are choosing to study here, bringing in £1.5 billion in 2005-06, but institutions face increasing competition from abroad. Britain's share of the booming market in educating overseas students has fallen from 16 per cent ten years ago to about 12 per cent last year.

The report concludes that although British universities are unlikely to see a collapse in the number of international students, they cannot afford to be complacent. It lists the biggest threats as cost, competition from overseas universities, and the belief held in some countries that British higher education is less demanding.

While acknowledging that universities have been “remarkably successful” in recruiting international students, the authors of the report say: “It is expensive for an international student to study in England, more so than in almost any other country in the world. UK degrees are marketed as a premium product for a premium price. So far we have been able to maintain our position, but if price sensitivity becomes an issue, this may not be sustainable.”

The report compared the cost, in US dollars, of studying similar courses at leading universities in other countries. The fees ranged from a very modest $235 (£120) at the Sorbonne in Paris to about $18,000 at the University of Sydney, to $21,653 at Oxford. Only Harvard, at $31,456, was more expensive, but Harvard also offers generous bursaries.

Other factors that worried international students included the lack of contact time at British universities.

The report said: “There are concerns about the shorter courses offered in the UK and the relatively low amount of teaching provided, and private study required, in many courses in UK universities ... there is a danger that English degrees will be seen as 'study light'.”

While Britain's relatively short degrees have been seen as a selling point in the past, the authors said this feature could “work against us in future”.

It highlighted criticism from the Norwegian quality assurance agency, which suggested that Britain's one-year masters degrees were less rigorous than those offered in other European countries. The report said: “The ramifications of this are potentially troubling. External perceptions of the value of UK higher education qualifications have clear commercial implications for export-oriented higher education institutions, many of whom rely heavily on international student fee income for their viability.”

The authors said it would be important to demonstrate that British methods of teaching, and the overall quality, more than compensated for the apparently shorter study time.

Although Britain had previously been able to use teaching in English as an advantage, this was now less influential as many other countries also provided this service. The report said an international student survey found that “students were more satisfied with the English-language proficiency of teachers in the Netherlands than they were in the UK”.

Professor Rick Trainor, president of Universities UK, which represents vice-chancellors of British universities, said: “Hepi's report confirms that the UK remains one of the leading destinations for students looking for a quality higher education experience. UK degrees are valued around the world and lead to excellent employment opportunities. The higher education sector in the UK has one of the world's best quality assurance systems to maintain these standards. There is no evidence to suggest that demand from international students is about to wane.”

Top of the class

— About 40 per cent of the European universities that appear in the world's top 200 institutions are in Britain

— Almost 220,000 non-EU international students were in Britain in 2005-06

— The total cost to a foreign student of completing a bachelors degree in Britain, including tuition fees, living costs and other expenses, is estimated at £50,000

— The cost for a masters is £27,000. For a PhD it is almost £50,000

— A British Council report in 2004 predicted a 5 per cent annual growth in demand for British university places from foreign students until 2020

Source: Hepi

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