Many are deliberately increasing their overseas contingent at the expense of home students, since they can charge more to students coming from outside the European Union. The majority of students at the London School of Economics now come from overseas, leading to suggestions that foreigners are being fleeced.
"Overseas students are beginning to bankroll the university system," said Andrew Pakes, president of the National Union of Students. "They are an easy target for universities desperate to make some money."
The LSE has pursued a deliberate policy of increasing its overseas student numbers since the Eighties. Fifteen years ago less than 30 per cent of students came from outside the EU; now the figure is just under 50 per cent. The LSE charges them pounds 9,072 a year for a classroom course - more than any other university charges for similar degrees. For home students it can raise only pounds 3,000-pounds 4,000 a year.
Nick Barr, a senior lecturer in economics at the LSE and an expert on student finance, accused the Government of operating a regime that systematically discriminates against British students. "That may persuade the Government that, whatever the merits of existing arrangments, they don't achieve what either ministers or the better universities want to achieve, which is to have British undergraduates," he said.
According to Clive Saville, director of the UK Council for Overseas Student Affairs, universities in Britain are driven by income considerations and are actively recruiting internationally - a trend that has been encouraged by the Prime Minister.
"It makes a real difference in financial terms," he said. "Quite a few institutions realise they're cross-subsidising home students."
The LSE is in a particular bind because it teaches such a narrow range of subjects. Social sciences command relatively low funding for home and EU students and the college does not teach courses in science and engineering, which attract funding from industry.
On top of this universities are penalised by the Government if they take more than a limited number of home students and if they charge them more than the flat-rate pounds 1,025 tuition fee. One answer, according to some, would be for the Government to relax the controls and allow them to fix numbers and fees at what the market will bear.
"We would rather that all UK students were adequately funded by the state," said Stephen Hill, the LSE's pro-director. "Failing that we would not be unhappy to move towards more of a market-based system. We think most big universities would try to introduce substantial scholarships for those who couldn't afford to pay."
Warwick University does not have a policy of increasing overseas student numbers but it happens in some courses, according to Susan Bassnett, the pro vice chancellor. Warwick's manufacturing engineering course recruits heavily from abroad, she said. "I think there will be more of that as time goes on," she added.
Imperial College in London has increased its proportion of overseas undergraduates over the last 20 years - from 10.4 per cent in 1978 to 17.3 per cent in 1998. A spokesman said this had not been deliberate policy and that Imperial recruited the best people from all over the world.
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