Will Rising Education Costs Derail the Global Race to Attract and Retain International Talent?

International students are becoming a strategic source of skills and economic growth, but rising tuition, housing costs and restrictive migration policies could weaken countries’ ability to attract global talent. The OECD urges governments, development partners and businesses to link affordable education, scholarships, work rights and post-study employment pathways to turn student mobility into long-term development.

International student mobility is becoming a strategic economic issue rather than simply an education trend. The OECD's International Student Mobility: Factors for Attraction and Retention shows that countries are increasingly competing for students who can become researchers, entrepreneurs and skilled workers. The report finds that affordability, university opportunities, housing, work rights, migration rules and post-study employment prospects collectively determine where students go and whether they remain after graduation. For governments, development partners and businesses, the challenge is therefore to connect international education with labour-market and development priorities.

Why Are International Students Becoming a Strategic Talent Pipeline?

International student numbers expanded rapidly over the past decade. Between 2010 and 2020, the international student population across OECD countries increased by 70%. More than 2.1 million student permits were issued in 2023, around 33% above 2019 and 60% higher than in 2013.

However, tighter policies are beginning to redistribute students. International student inflows fell 13% in 2024, including declines of 39% in Canada and 22% in Australia, while other OECD destinations collectively recorded growth of around 5%.

The economic significance extends beyond university revenue. International students represented approximately 5% of bachelor's, 19% of master's and 27% of doctoral students across the OECD in 2024. Around 30% studied STEM subjects, compared with 19% of domestic students.

For governments facing ageing populations and skills shortages, retaining some of these graduates could strengthen domestic supplies of scientists, engineers and other skilled professionals. But countries must balance talent attraction against pressures on universities, housing and public services.

Can Rising Education Costs Undermine the Global Competition for Talent?

Affordability is emerging as a major policy concern, with more than two-thirds of prospective international students identifying it as an important consideration. In several leading destinations, average annual tuition for international master's students exceeds USD 20,000 in purchasing-power terms, before housing and other living expenses.

European experience demonstrates how sharply students can respond to higher prices. Sweden's introduction of tuition fees for non-EU/EEA students in 2011 was followed by an almost 80% fall in new third-country enrolments, from more than 8,000 to just above 1,600. Finland experienced an initial decline of around 35% following its 2017 reform, although enrolments later recovered. Norway recorded a 46% decline in admitted third-country degree students following its 2023 reform.

Students from lower-income economies can be particularly vulnerable to such increases, raising concerns that international education could become increasingly concentrated among wealthier households.

Financial requirements add another barrier. Students may need to demonstrate approximately USD 25,000 annually in Switzerland, USD 20,000 in Luxembourg and USD 19,000 in Australia, while requirements in Canada, Germany, the Netherlands and the United Kingdom broadly range between USD 13,000 and USD 16,000.

Scholarships, Housing and Work Rights Could Decide Who Gets Access

Scholarships can reduce inequality in international education, but most students remain self-funded. More than 90% of international students in the United Kingdom were self-financed in 2021, while only around one-fifth of international students in the United States reported scholarships or sponsorship as their main funding source in 2024/25.

International development partners therefore have an important role. OECD Development Assistance Committee members reported almost USD 4.8 billion in Official Development Assistance for scholarships and student costs in 2024. Germany alone accounted for nearly USD 2.4 billion.

Development agencies could make these investments more effective by connecting scholarships with priority skills, institutional partnerships and development needs in students' countries of origin. Carefully designed programmes could encourage knowledge transfer and international professional networks rather than creating a simple choice between permanent migration and compulsory return.

Housing must also be integrated into education planning. Estimated annual living expenses range from below USD 10,000 in cheaper OECD destinations to above USD 30,000 in expensive ones.

Work rights provide another affordability mechanism. All OECD countries covered by the survey allow international students to work at least part-time. Most permit roughly 15–25 hours weekly, helping students earn income while gaining local professional experience and networks.

From University to Employment: Where Governments and Businesses Must Act

Post-study employment is becoming one of the strongest tools for attracting and retaining talent. Clearer and longer pathways allow employers to recruit graduates already trained within the domestic education system while helping governments address skills shortages.

English-taught education is simultaneously creating new competitors. The four major English-speaking destinations supplied 78% of English-taught programmes in 2024, but programmes elsewhere increased by 48% between 2019 and 2024. Germany and the Netherlands each offer more than 2,000, while Türkiye, Italy, Spain and Sweden each exceed 1,000.

This creates opportunities for universities, employers, education-technology companies, student-housing developers and financial-service providers. Risks include poor-quality programmes, irresponsible recruitment, housing pressures and excessive university dependence on international tuition.

The OECD evidence suggests that governments need an integrated strategy rather than isolated visa or tuition reforms. Affordable education, targeted scholarships, adequate housing, responsible recruitment, reasonable work rights and transparent routes into skilled employment should reinforce one another.

For development partners, the priority is ensuring students from lower-income countries are not priced out while connecting mobility programmes with skills and development objectives. For businesses, stronger university partnerships, internships and graduate recruitment can turn international students into productive workers.

Ultimately, success will not be measured simply by how many international students a country attracts. A stronger measure will be whether countries can convert international education into skills, innovation, employment and sustainable economic development.