Migration Advisory Committee (MAC): Rapid Review of the Graduate Route

The report was commission in March by the Home Secretary James Cleverly to provide a rapid review of the graduate visa route, which allows students to stay in the UK for at least two years after successfully completing a course in the UK (or 3 years in the case of a PhD). The report provides new evidence on who is using the route and what they are doing whilst on the route, based on 40 interviews with graduate visa holders, engagement with stakeholders and statistical analysis. It also provides international comparisons of the route and documents how international student numbers have grown since the route was introduced in 2021.

The full report can be found here

At-a-glance:

• The graduate route should remain in place in its current form, the Committee’s report concludes. It has broadly achieved, and continues to achieve, the objectives set by the government – to ensure UKHE remains internationally competitive, enable retention of talented and skilled graduates to contribute to the UK economy, and achieve ambitions set out in the International Education Strategy (p4)
• There is “no evidence” of any significant abuse of the graduate route, such as deliberate noncompliance with immigration rules, says the report (p4)
• Evidence suggests that recently introduced restrictions on international student dependants has already contributed to reduced international student recruitment for September 2024. Early indications suggest a 63 per cent drop in the number of international postgraduate deposits paid this year compared to the same time last year. It is therefore likely that there will be a significant reduction in future use of the Graduate route as a result of policy changes already introduced (p4)
• Any additional restrictions on the graduate route will result in UK universities experiencing further substantial financial difficulty leading to job losses, course closures and a reduction in research, and in the extreme it is “not inconceivable” that some institutions would fail (p5)
• The failure to properly fund the sector has led to an increasing over-reliance on immigration. Discussion with ministers in Westminster and the Devolved Administrations indicate there is no plan in place to address this structural under-funding. In such circumstances, any policy change to the graduate route intended to reduce student numbers would need to explain how the financial consequences for the sector would be addressed (p5)
• There are concerns over the use of recruitment agents by universities in certain markets providing misleading information to prospective international students. A voluntary framework to address these concerns may prove ineffective against deliberate poor practice (p34)
• The government should consider a mandatory registration system for agents and sub-agents and that universities be required to publish information on their use of agents, to help protect the integrity of the UK higher education system (p64)
• Since the introduction of the graduate visa in July 2021, there has been a rapid increase in the number of visas granted. The 66,000 graduate visas granted for main applicants and dependants in 2022 more than doubled to 144,000 visas in 2023. 30,000 dependant visas were issued in 2023 (p12)
• India, Nigeria, China, Pakistan and the USA account for nearly 75 per cent of all graduate visas. Nigerian nationals were the most likely to bring a dependant and of these dependants, half were children (p15)
• The majority of the growth since the graduate route’s introduction is from teaching-focused universities’ postgraduate courses (66 per cent of all graduate visas): the same group that has driven the growth in the number of student visas in recent years (p15)
• Almost 40 per cent of applicants to the graduate route were based in London. To a lesser extent, students may be moving to the West Midlands and North West, where there are also large cities (p16)
• Of the graduate visa holders who started the route before April 2022, 79 per cent match to an HMRC record (including paid employment through pay-as-you-earn (PAYE), or self-employment measured by self-assessment). Those for whom no HMRC record was found may have started to work for the first time after April 2023, may have left the country without exercising their right to work in the UK, or may have been working in the UK but their records did not match (p19)
• The median monthly income of the cohort who are in work is £1,750 (equivalent to £21,000 a year). The median monthly income, when looking at only the last 3 months of the first year on the graduate route, is £2,020 (equivalent to £24,240) (p22)
• Graduate visa holders often reported they were not in jobs related to their course of study or were in jobs they were overqualified for (p22)
• Home Office data shows that half of those on graduate visas switched to a work visa or student visa. Most of these (86 per cent) went into the skilled worker route. Graduate route switchers are more likely to be in graduate-level occupations than student visa switchers (p29)
• It is likely that graduate visa holders make a small positive net fiscal contribution, as although they are relatively low earners, they are expected to have low healthcare costs, pay the Immigrant Health Surcharge and the ‘no recourse to public funds’ restriction applies (p31)
• As the scheme only started in 2021, the Home Office was unable to provide data on the rate of overstaying on the Graduate route (p33)

Implications for governance:

The MAC report’s key recommendation, that the graduate visa route should remain in its current form, has been widely welcomed across UK higher education.

Vivienne Stern, chief executive of Universities UK, said the decision to review the visa had led to “toxic” uncertainty and that the MAC report now provided “categorial reassurance” that the government should listen to.

For governing boards at universities with large overseas cohorts, the clear directive – at a time when any discussion of migration is politically charged – will come as a relief.

Some are already grappling with the financial impact of a drop in international student enrolment this year, as a likely consequence of the restrictions on dependents for undergraduate and postgraduate taught students which came into forced in January.

The report’s estimate of a 63 per cent drop in the number of international postgraduate deposits paid this year compared to the same time last year comes from evidence supplied by Enroly, a platform that automates the Certificate of Acceptance of Studies (CAS), visa and arrival process for universities that recruit international students (third of market coverage). 

Enroly reports that out of a sample of 24 institutions that used its software, deposits received by May were down for the 2024 intake by 57 per cent compared to the 2023 intake. For India and Nigeria, the biggest users of the graduate route who also typically bring more dependants, deposits were down by 69 per cent and 74 per cent respectively. 

MAC warns that “universities at all tiers of ranking level, and geography, have been affected by a significant year-on-year decline” and also points out that universities outside the global top 200, which have recently increased their recruitment from Nigeria, India and Pakistan, are likely to feel the biggest impact.

Home Office research shows that nearly three quarters of graduate visa holders who were aware of the route when applying said it influenced their choice to come to the UK. The report lays bare the potential dire consequences of any move to tighten these rules, on top of the restrictions on dependants, and warns of job losses, course closures and even institutions going bust.

One major concern in the highly complex system highlighted by the MAC review is the role played by international agents, which many institutions are dependent on to boost student numbers.

According to students quoted in the report, the graduate route is used as a selling point to recruit candidates to the UK, with some unscrupulous agents  giving false impressions. 

Initial steps have been taken by the sector to limit bad agent practice and protect students from exploitation. The recent implementation of the UK Agent Quality Framework (AQF) by the BUILA, Universities UK International, UK Council for International Student Affairs, and the British Council, aims to ensure agents act ethically and professionally. 

Universities signing up to the AQF are encouraged to share data on agents to increase transparency and help identify and act against unscrupulous agents. Governors may want to consider if their international office procedures and processes minimise any risk of bad practice.

Further regulation could be on the cards if the government follows MAC recommendations to establish a mandatory registration system for international recruitment agents and sub-agents and require universities to publish data on how much they spend on recruitment agents and the number of international students recruited through such means.

Another potential risk to the appeal of the graduate visa scheme are new rules around the skilled worker route, which many graduate route holders switch to. From April, the minimum salary to be sponsored for a skilled worker visa increased from £26,200 to £38,700 (£30,960 with the new entrant discount), while the occupation-specific threshold specific to each job also increased significantly. Of the graduate visa holders between July 2021 to December 2021 who switched into the skilled worker route, approximately 40 per cent would not have met the new salary threshold.

Government claims that there is evidence that the majority of switching graduate route holders are going into low-paid care work (undermining the “brightest & best” policy ambition) are incorrect, according to the MAC report. It found that the salary distribution of international graduates was roughly equivalent to those of domestic graduates and that a greater proportion of student visa route switchers were in the lowest salary band.

One area where universities could potentially try to make a difference to outcomes for international students is to improve awareness amongst employers of the graduate route. Some of the international students interviewed in the report said ignorance across businesses of their right to work was a barrier to seeking employment.

Meanwhile, governing boards have an anxious wait until later in the year to discover the full effect of the various changes to immigration rules on their international student recruitment levels in the next academic year.