Last Thursday, about 300,000 British secondary school students (England, Wales & Northern Ireland) received their A-level results, which are a key determinant of whether or not they will receive a place at a university of their choice. This year, the number of applicants to British universities was about 684,000 but the number of spaces was 480,000.
The result is a very competitive process for university admission. An added wrinkle to all of this is that there is a record number of applications this year in order to beat next year’s tuition increase. Tuition will be going up from 3,000 to 9,000 pounds (from about 5,000 dollars Canadian to 15,000 dollars). This is a massive price increase and like all price increases it can be expected to have an income and substitution effect. The increase in prices will depress the real resources students have and could lead to fewer students going to university. However, there will also be a substitution of university education abroad for British university education. No doubt, many British students may start looking to the continent for their university education but another option may be North America – even Canada. It is not that the education will be that much cheaper. At Lakehead, for example, undergraduate tuition is about 5,000 dollars for domestic undergrads but about 15,000 dollars for international undergrads. It does not appear to be much different at some of the other Ontario universities either but they do vary across the country as this (possibly dated) website indicates. These are tuition fees and do not include ancilliary fees, books, etc… but they suggest that there may be some options for British students in Canada (as well as the United States). Indeed, British papers are providing articles on such options. According to an article in The Independent, for those worried about the climate, the University of Saskatchewan assures students that there are passageways connecting parts of the campus. Perhaps a parka and a Tim's card for hot chocolate can be thrown in as part of the recruitment package. British students will likely not save money coming to Canada but given their domestic tuition increases, the international market has become a more competitive option for them.
Worthwhile Canadian Initiative 
Making a Londoner move to Thunder Bay and drink Tim Horton’s coffee is just cruel and unusual punishment 😉
But let’s think about the economics for a moment.
1) What’s the marginal cost of adding, say, 10,000 UK students to our existing universities? Is it more or less that what we would charge them in tuition?
2) What’s the cheapest way for Canadian universities to teach those UK students? Make them in Saskatoon or Moncton or Guelph? or rent some space in the UK and fly Canadian academics out to teach them?
There’s a lively international market in university education; I think the Aussies are some of the world leaders with (a) very large numbers of foreign students on their campuses, (b) lots of “foreign campuses”, and (c) lots of experimentation with “distance learning.” Put another way, this is already quite a competative market.
re Londoners moving to Thunder Bay:
What can I say? When one tires of Thunder Bay, one tires of life!
Re marginal cost:
Our universities are keen on expanding enrollment. Would the marginal cost of an international student be any different than for a domestic student?
I think this is a real opportunity for Canadian universities. I was talking to my English nephews and nieces about it earlier this summer.
A lot of them would like the opportunity to go abroad anyway, and if there is no (or little) extra cost, many more will take that opportunity.
Plus, they speak English. Well, sort of. (I once met a student from Somerset sharing a flat in Aberdeen with some students from Glasgow, and I was the only one there who could understand all of them.)
Rents are the biggie. UK rents seem to be much higher than Canadian rents, though it depends on the exact location in both cases, of course.
The exchange rate of the Loonie against Sterling is also very high at the moment. If/when it returns to historically normal levels, Canada will be an even better deal for UK students.
There’s a lot of Brits too, and a lot of them want to go to uni.
It’s surprising how few Brits are currently undergraduates (I’m speaking only of my own classes). The last student I thought was a Brit turned out to be a German with an impeccable Manchester accent.
Canadian demographics are currently unfavourable for universities. IIRC, the only areas with growing populations in the 17-20 age group are Toronto area, plus Vancouver? (Maybe areas with high aboriginal populations too.) Many universities in the Atlantics are, I think, already stepping up GTA recruiting to try to offset declining local demographics.
My rough view is that LRAC curves are roughly flat for universities, (perhaps once you get past the really small scale). So LRAC=LRMC. (There’s more of a different quality of experience — the trade-off between a small university “where everybody knows your name” vs the larger variety of courses and programs). Universities are allowed to set any foreign student fee they want (this is for Ontario, not sure for all provinces), so they price to at least recover Marginal Costs on foreign students.
Simon: “Making a Londoner move to Thunder Bay and drink Tim Horton’s coffee is just cruel and unusual punishment ;-)”
Actually all of my British relatives love Tim Horton’s coffee. They’ve been known fly via Toronto just to stop off for a Timmy Ho’s…
Never been to Thunder Bay so can’t comment there.
Frances: I confess that I’m always impressed with the quality of food in London (the prices…not so much.) And while I don’t have direct experience with Londoners’ impression of a double-double, one of my wife’s second cousins from Lyon visited us a few years back and tried Tim Horton’s coffee. He couldn’t make it past the first sip…20 oz – delta were politely tipped into the garbage can.
I’ve visited Lakehead U. and think it’s a beautiful place. (Skiing was fine and the bilingual signage impressed me, although I’m still not sure what that second language was.) I just suspect most Londoners would have a very tough time adapting. The climate and the culture are …. different.
The UK approach to reforming post-secondary education seems like very good policy to me, especially coupled with the beefed-up student loans program. I wonder if that program extends to UK students who attend foreign universities–I see no reason why it should not, with the requirement that the loans become payable in full if those students do not return to the UK after their studies.
Simon – well, it has to be said that the family’s (strictly speaking, my in-laws) enthusiasm for Tim Horton’s is not unrelated to the price (“Coffee and a doughnut for under a pound!” – though not now given the $). I can’t really judge the British food – do I like it because of my cultural/genetic heritage or because it’s actually good? Don’t know. But new potatoes with mint and fresh new peas and lamb….yummm…..
There’s probably also a post to be written on coffee as a sociological signifier…
I get a lot of emails and calls from UK doctoral students asking about studying and working in Canada. The economy looks better to them, and even though most Brits see Canada as irredeemably dull, they can accept the trade-off.
I got the shock of my life the other day at someone’s home when they handed me a great cup of coffee. It was Tim’s! Normally I can’t stand it, but it was brewed stronger.
There is a much, much larger issue at stake: the probability that Canadian food is worse than British food. Sadly, that’s where we seem to be.
I don’t think the coffee they serve in their restaurants is the same as what they sell for home use. I could be wrong. Agreed that their coffee is generally too weak. I can’t stand dishwater. If I have to buy coffee from a fast food place, it would be McDonalds. Sometimes their coffee is too weak as well, but when it is strong enough it at least tastes decent.
From my experience in Sept-Îles,where we have a strong contingent from the Réunion Island ( in the Indian ocean) and Nouvelle-Calédonie (at the limit of the Coral Sea 1200 km from Aussie), foreign students necessitates a small increase in staff in the Students Services to steer them through strange laws, customs etc. Of course probably less would be needed for totally westen students.
But MR is way over the increased MC
Of course, with British universities charging significantly more, there may be offsetting supply-side effects (i.e., more spots available, so that demand, rather than supply, binds, higher quality)
I had the chance to study in Canada a while back on a British-Canadian exchange, but I don’t speak Canadian.
(Ok, language was not a problem, since it was in Montreal and everyone at my school left having studied French for five years. What really mattered was that I didn’t feel adventurous enough to take my first honours year abroad.)
Also, it looks like a lot of universities won’t be charging the full £9,000. This is significant for Scotland, since it means there won’t be such a funding gap between free Scottish universities and their southern competitors.
“it looks like a lot of universities won’t be charging the full £9,000” No doubt a number of then wouldn’t be able to attract any students at that price.