Proposed new immigration laws could deprive colleges of overseas students they depend on

Legal experts Laura Darnley and Audrey Elliott advise on how they can plug the financial gap

Government proposals to radically alter the student visa regime have left colleges facing the possibility of having to cut recruitment of foreign students and move much of their international work overseas.

A survey by the international law firm Eversheds found that colleges and universities are doing just that - three in 10 are considering setting up a campus overseas and more than 90 per cent believe that increased collaboration with foreign colleges is likely.

The Government's attempts to crack down on "bogus" colleges and restrict immigration threaten an industry that brought in £42million in foreign earnings in 2008/9, according to the Learning and Skills Council. While press coverage has mostly focused on the likely effects on higher education, it is further education that stands to be hit harder by the changes.

The proposals under consultation include slashing the number of students on sub-degree courses, which can only be provided by Highly Trusted Sponsors, accredited by the UK Border Agency. There are also plans to raise the English language requirement and restrict the rights of students to work while in the UK.

This is no peripheral matter affecting only the larger colleges; the impact will be felt by most, if not all, Further Education (FE) institutions to a greater or lesser degree. If the Government's changes have their desired effect, this revenue stream will reduce substantially as the number of overseas students drops significantly. Colleges will have to find ways to plug this gap. This would be a difficult task in good times, but one that is particularly hard in the context of a recession and widespread funding cuts targeted at the sector.

Over and above funding concerns, overseas students have a key role to play in both the British and the global economy, as well as in the social development of the UK and other countries.

"Colleges' international work provides an excellent advertisement for UK plc," says a November 2010 Policy Paper by the 157 Group, a membership organisation of the largest colleges set up in 2006 following Sir Andrew Foster's Review of the future of FE colleges. It is hard to argue with this succinct statement.

The danger is that by attempting to crack down on "bogus" colleges and achieve a blanket reduction in net migration overall, the Government is proposing changes with far-reaching implications, not only for the education sector but the country as a whole.

The Government's proposals are far reaching and include the following: raising the level of courses for which students can study on a student visa to degree level only (barring child students). Only Highly Trusted Sponsors will be able to offer courses below degree level. This clearly has significant implications for the FE sector; implementing tougher entry criteria for adult courses, for example raising the level of English language ability required and requiring students to pass a secure independent test to verify their level of English language ability; ensuring that students return overseas at the end of their courses - students wishing to continue their studies in the UK will require a new visa, proof of academic progression to a higher level course, and may be required to leave the UK and reapply from overseas; limiting the ability of student visa holders to work.

It is proposed that students will only be allowed to work on campus during the week and for an external employer at weekends and during vacations; limiting the ability of student visa holders to bring in dependents to only those students who will be studying in the UK for more than 12 months and limiting or removing the right of dependents to work; stricter accreditation procedures for education providers in the private sector; and closure of the Tier 1 post-study work visa category.

The Association of Colleges is working with its members to collate a full response to the UKBA consultation document. Eversheds is also discussing these issues with clients with a view to ensuring their concerns are put forward to the UKBA before final decisions regarding the new rules are made. Consultation closes on 31 January, so institutions do not have long.

But assuming the proposals do not change significantly as a result of the consultation exercise, many colleges will be taking immediate steps to become Highly Trusted Sponsors by satisfying the closely defined criteria laid down by UKBA, including factors such as the college's track record of complying with its sponsorship obligations and the percentage numbers of students who fail to complete their courses. The AoC estimates that approximately 140 colleges within the UK have not yet obtained HTS status and this is something we would recommend these institutions address fast.

Finally, colleges should consider whether there are ways in which they can work within the new rules. UK- accredited courses can be delivered abroad through international expansion and collaborations.

Given Eversheds' survey evidence of the extent to which colleges are considering setting up campuses overseas and the overwhelming drive for increased collaboration with foreign colleges, what should be done to support them? The Government could provide further help to colleges wanting to develop such an export-led approach through pump-priming schemes following the various Prime Ministers' Initiatives.

Other options could include using the student short-term visitor rules. Colleges could follow the example of many universities in offering summer schools to international students.

In any event colleges must urgently consider their response to this very significant development.

Laura Darnley and Audrey Elliott are associates at law firm Eversheds LLP