Background

The latest report from the Migration Advisory Committee (MAC) fulfils a commission from the Home Secretary to provide a "rapid review" of the Graduate route. The Graduate visa was introduced in 2021 to enhance the offer to international students, retain talent upon graduation, contribute to the UK economy and increase the value of education exports.

The report focuses on who is using the route, their activities during and after the route, and the impact on international student numbers and the UK economy. The MAC concludes that the Graduate route has achieved the government's objectives and recommends its continuation in its current form.

The government has already taken action to reduce the number of dependants entering the UK on a student visa, which will reduce the number of graduate visas as course uptake declines. The MAC cautions that further restrictions on the Graduate route could exacerbate the decline in international student numbers and have significant financial consequences for universities and domestic students. As a result, the MAC emphasises the need to consider the total impact of any policy changes on wider government policy, including the contribution made to the UK Higher Education sector and not just net migration.

MAC key recommendations

• The Graduate route has achieved the government's objectives and should be continued in its current form.
• Mandatory requirements for universities and improved disclosure of agent use, including a new mandatory registration system, should be considered to protect the integrity of the UK Higher Education system.
• Introduce a requirement for universities to provide confirmation of the course outcome (i.e. class of degree), in addition to the existing requirement to demonstrate that the course was completed successfully when applying for a Graduate visa.
• Further restrictions on the Graduate route could worsen the decline in international student numbers and have significant financial consequences for universities. Therefore, the government should prioritise the overall impact of policy changes rather than focusing on net migration effects.

Who uses the Graduate route?

In 2023, 114,000 Graduate visas were granted to main applicants, with a further 30,000 being granted to dependants. The report identifies that Graduate visa applicants are largely concentrated among four nationalities: India, Nigeria, China and Pakistan, with Indian nationals accounting for 40% of uptake, followed by Chinese nationals. The data also showed that 91% of Graduate visa holders had completed a post-graduate course. Whilst it is not possible to determine the academic achievements of those applying for Graduate visas as the Home Office does not request this information during the immigration life cycle, the MAC recommends a new mechanism to gather this data so further analysis can be undertaken as to whether the route enables Britain to retain the "brightest and best" as per government policy.

What do migrants do on a Graduate visa?

In terms of post-Graduate route options, the document indicates that the majority of graduates secure employment promptly, with a significant proportion remaining employed throughout their first year. Monthly income tends to increase over time, with a substantial number of Graduate visa holders reaching the highest income bracket by the 12th month. The salary distribution for Graduate route switchers is similar to that of domestic graduates, with 61% of switchers earning below or equal to £30,000. The median monthly income for an individual working on the Graduate route is £750, or £21,000 annually, which is comparable to the earnings of domestic graduates.

However, there is a concern about employer awareness of the Graduate route, and some employers may be reluctant to hire Graduate visa holders due to potential departure from the UK or salary thresholds to switch to a Skilled Worker visa following the changes to immigration policy made in April 2024.

No evidence of abuse on the Graduate route

The MAC concludes there is no evidence of significant abuse of the Graduate route, which is defined as "deliberate non-compliance with immigration rules". However, concerns were raised regarding the use of recruitment agents by universities in certain markets. These agents were found to provide misleading information to prospective international students. The report suggests that the voluntary framework introduced by the sector may not be effective in addressing deliberate poor practices. As a result, the report recommends considering mandatory requirements for universities to ensure good practice in agent use.

Graduates switching to a Skilled Worker visa

The data shows that 50% of individuals whose Graduate visas have expired switch into a work visa or student visa. Among those who switch into work routes, the majority (86%) opt for the Skilled Worker route. The report also reveals that 69% of Graduate route switchers moving into sponsored working visas enter occupations classified as managers, directors and senior officials, professional occupations, or associate professional and technical occupations – emphasising the importance of enabling the retention of talent for employers and the valuable contribution made to the UK economy.

Whilst the report acknowledges concerns about Graduate visa holders switching into care work, it clarifies that the issue lies within the care sector rather than the international study sector. While some Graduate route switchers do work in care occupations (20%), it is still lower than the proportion of domestic graduates in such roles. The MAC suggests that improving pay and conditions in the care sector is the main solution to recruiting problems, rather than relying on immigration.

Conclusion

The results of this review will be welcomed by universities, students and employers alike. The Graduate route provides a valuable incentive for international students to come to the UK and secure employment post graduation. Many students do not land their first graduate job immediately upon leaving university. This route provides greater flexibility to ensure international students have the opportunity to go on to secure sponsorship in higher-skilled roles and for the UK job market to retain this talent in the longer term.

Whilst the retention of the Graduate visa would be a positive outcome, international students and employers must grapple with the huge increase to minimum salary thresholds and "going rates" to qualify for a Skilled Worker visa once their two-year Graduate visa expires. We have seen one of the largest shake-ups to immigration policy introduced in April, with the minimum graduate salary for sponsorship increasing from £20,960 to at least £30,960 per annum. Those on a Graduate visa benefit from a "new entrant" discount, but this only lasts for four years and includes time already spent on a Graduate visa. As a result, some employers have already been reviewing their graduate intake policies and approach to sponsorship.