Studying overseas is a character-forming time for many graduates who return with fond memories of the countries in which they have studied and worked. UK business schools are hoping they can persuade their government of the importance of such relationships – they had until today to convince Theresa May, the home secretary, that her plan to prevent overseas students from working in Britain once they graduate would damage their international recruitment business.

It is the latest move in a general trend of visa tightening, making it tougher for students outside the EU to stay in the UK. The previous government introduced an Australian-style tier system. Overseas applicants seeking a Tier 4 student visa must now obtain sufficient points calculated on the basis of age, qualifications, experience, previous earnings, English language proficiency and funding.

But of greater concern for British business schools and their university colleagues is the current government’s proposal to remove post-study work as a Tier 1 visa option from April 2011.

Under existing arrangements, anyone who graduates with a bachelor-level degree or higher can apply to work in the UK for a further two years. According to Maria Patsalos, an immigration specialist at Mishcon de Reya, the law firm, 38,000 visas were issued in 2009 under this category.

The UK is the world’s second-largest recruiter of international students behind the US, and its business schools fear the move will affect their ability to attract overseas applicants. The US market share of international students fell from more than 25 per cent to roughly 20 per cent following a post-9/11 crackdown on student visas.

“We are sure business schools are not the intended target. No one pays £30,000 ($46,500) in fees just to become an economic migrant,” says David Simmons, director of international development at Cranfield School of Management, who believes the measure is aimed at less reputable, unaccredited language schools.

He adds: “We are being seen as an immigration problem when we are actually an export success. Fees from business schools alone are worth £2bn of income, and a large proportion of that is from international students.

“Students come to the UK for the excellence of teaching and research, but also because of the possibility of working here for a period of time to improve their cultural mindset. If they are deprived of that, we will lose out, particularly to places such as Canada and the US where they are more welcoming.”

Simmons also warns of a longer-term impact. “Business schools are not just fundraising for the UK economy, but friend-raising too. There is a risk that if the next generation of business leaders don’t come here and get a positive view of the UK, in 10 or 20 years’ time when they’re looking for places to invest or export to, they won’t choose the UK.”

Sharon Bamford, chief executive of the Association of MBAs, says that while she understands immigration reform was an election pledge, this particular measure has not been well thought through.

“I’ve just come from a business trip to China, and colleagues from business schools in the US, Canada, Australia and Singapore were all saying this is great news for them,” she says. “In such a competitive market, we are handing out business on a plate.”

The UK government’s proposal seems at odds with visa policy elsewhere. For example, students graduating from a two-year MBA programme in Canada receive an automatic working visa for a period of two years that they can extend by a year if needed.

“As you can imagine, this is an important incentive for international students to come to Canada,” says Jonathan Khayat, associate director of recruitment and international development at McGill University’s Desautels Faculty of Management in Montreal.

In the US, graduates who studied on an F-1 student visa can work for up to 12 months under the Optional Practical Training scheme. Pulin Sanghvi, director of the Career Management Center at Stanford Graduate School of Business, says he has noticed an increase in the number of international students returning to their home countries soon after graduation, but puts this down to opportunities resulting from dynamic economic growth in their countries rather than US visa policy.

Last month, the Australian government announced a review of its student visa rules and a package of measures to help reverse the decline in international student applications. “My overall impression is that our government intends to provide more generous conditions from July 2011 to allow international students in specific fields of study to spend time after graduation working in Australia,” says Christopher Adam, associate dean of Sydney’s Australian School of Business at the University of New South Wales.

“We have certainly detected enthusiasm from our international postgraduate students for an opportunity to seek some Australian work experience after they graduate,” he says.

According to Prof Adam, two-thirds of the 60 students who enrol in the school’s MBA programme each year are from other countries, and 60 per cent of its graduates find long-term employment in Australia.

In Europe, too, business schools are viewing the UK situation with perplexed delight. “In the short term, this will inevitably lead to more students applying to Europe rather than the UK,” says Mark Thomas, associate dean of Grenoble School of Management in France. “The fact that both Germany and France are vying for the third spot in terms of international recruitment means they are unlikely to change their policies in the immediate future. I fear the British government is just going to make things very difficult for the country’s higher education sector, which, until now, has been very successful indeed.”

Several UK business schools have asked Mishcon de Reya to lobby the government on their behalf, says Patsalos. The law firm has already acted for multinational employers, persuading the government to exempt intra-company transfers from a cap on migrant numbers. “The government could readily find a workable compromise that addressed its mandate to reduce immigration numbers while safeguarding Britain’s position as a major educational destination of choice,” she says.

“Compromises such as a one-year work visa linked to a higher minimum salary would address the government’s concerns,” she adds. “The UK Border Agency has a good track record of listening and responding to business concerns, and we hope that it will do the same on this occasion.”

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