Beyond volume: what HEPI’s report on demographic decline means for international student recruitment strategy

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This blog was kindly authored by Vincenzo Raimo, an independent international higher education consultant.

The recent Higher Education Policy Institute report number 201 by Bahram Bekhradnia on demographic decline and ‘predatory recruitment’ in English higher education deserves close attention well beyond the domestic undergraduate market.

At first glance, the report is primarily about home undergraduate recruitment. Its central concern is stark: after a temporary peak in the 18-year-old population around 2030, England faces a projected fall of around 18.5 per cent in that cohort by 2042. For non-higher-tariff universities – on the scenarios Bekhradnia considers most likely – that could translate into a loss of up to 29 per cent of home undergraduate income. Combined with continuing financial pressure, this threatens the viability of institutions that are, in the report’s own words, ‘doing an excellent job and adding real value to the students and regions they serve’.

But there is a wider lesson here. The dynamics described in the report have striking parallels with what has already been happening in international student recruitment.

In both cases, the underlying issue is not simply demographics or policy change but what happens when universities respond to a declining unit of resource by prioritising volume growth over value, margin, positioning or long-term sustainability.

Bekhradnia warns that higher-tariff institutions are increasingly recruiting students who might previously have attended lower-tariff providers, creating a destabilising effect across the system. Many universities will recognise the same phenomenon in international recruitment. As financial pressure intensifies, stronger brands often move further ‘down market’, increasing competition in markets and segments that were once the preserve of less selective institutions.

The result is a form of market compression. Institutions compete harder for similar pools of students, often through scholarships, discounts, expanded agent networks and higher commission incentives.  Recruitment targets may still be achieved, but at the cost of lower margins, increased operational complexity and greater institutional risk.

Universities have become accustomed to thinking about recruitment success primarily in terms of enrolment growth. Yet growth alone tells us surprisingly little about institutional health.

A university can recruit record numbers of students while simultaneously weakening:

• net revenue;
• student retention;
• student experience;
• portfolio quality;
• organisational resilience; and
• long-term market position.

This is not simply a financial issue; it also affects the ability of universities to serve their regions and communities effectively.

In international recruitment, this tension has become increasingly visible. Many institutions now face rising costs of acquisition driven by commission inflation, expanded scholarship offers and increased reliance on intermediaries. Gross fee income can look impressive while net contribution becomes progressively weaker.

The same logic increasingly applies to the home undergraduate market, albeit through a different mechanism. With domestic tuition fees effectively fixed, institutions often have limited ability to improve the margin per student. The temptation, therefore, becomes to recruit more students simply to maintain financial stability.

The risk is that volume becomes the strategy rather than the outcome of a strategy.

One of the more important implications of Bekhradnia’s report is that domestic and international recruitment can no longer be considered separately. The two markets are becoming increasingly interconnected.

Students recruited into undergraduate programmes today are tomorrow’s postgraduate taught applicants. If demographic decline weakens domestic undergraduate recruitment, many institutions may become even more dependent on PGT recruitment, particularly international PGT recruitment.

This creates a potentially dangerous cycle:

• pressure in domestic UG increases dependence on international recruitment;
• dependence on international recruitment intensifies competition;
• competition drives discounting and commission inflation;
• and margin pressure then creates further pressure for growth.

The sector risks entering a position where both home and international recruitment models become simultaneously more volume-dependent and financially fragile.

This is why universities need a more strategic conversation about recruitment and pricing.

For many years, the sector has often behaved as though demand growth – especially international demand growth – was structurally guaranteed. In reality, universities are now operating in a far more competitive and uncertain environment shaped by demographic change; geopolitical instability; shifting migration policy; rising recruitment costs; and increasing price sensitivity among students.

In that environment, the key question is not how many students can we recruit, but rather:

• Which students are we trying to recruit and why?
• What level of net revenue is sustainable?
• What balance should exist between growth, quality and risk?
• Which activities genuinely create long-term value?
• What institutional size and shape are financially and educationally sustainable?

These are difficult questions, particularly for institutions under acute financial pressure. But they are increasingly unavoidable.

Bekhradnia’s report is therefore important not only because of what it says about demographics, but because it highlights a broader structural challenge facing English higher education. The limits of volume-led recruitment are becoming increasingly apparent across both the domestic and international markets.

The danger is not simply demographic decline. It is the possibility that universities respond to that decline using strategies that further erode institutional sustainability.

The sector now needs a more mature discussion about what recruitment success actually means in an era where growth can no longer be assumed.