Netherlands warned of losing $5.8B from international student caps

The study by SEO Economic Research, a research institute in Amsterdam, warned that capping foreign students at Leiden University, Utrecht University, Erasmus University Rotterdam, the University of Amsterdam, and Vrije Universiteit Amsterdam would hurt labor markets, business services, and public sectors already facing talent shortages.

The Randstad region, home to the five universities, which accounts for half of the Dutch GDP, would absorb 82% of the projected losses. The most affected sectors would be business services (39%), financial institutions (20%), and the public sector (10%), SEO Economic Research said on its website.

Researchers noted that international graduates play a key role in filling skills gaps, with over a quarter remaining in the Netherlands five years after graduation.

The caps on international students at Dutch universities were proposed in stages, with initial discussions beginning in 2022 and formal legislation being proposed in 2023 and 2024.

According to ICEF Monitor, in February 2024, Dutch universities unveiled a comprehensive plan to reduce international student enrolment in response to mounting government pressure. The Dutch government spent most of 2023 signaling concern about the rapid growth of international student numbers in the country.

The strategy includes implementing enrolment caps, ceasing the expansion of English-taught bachelor's programs, and winding down preparatory foundation year courses. Additionally, universities will scale back international recruitment efforts and introduce more Dutch-taught degree programs to strengthen the use of the Dutch language. These measures aim to address concerns over housing shortages, overcrowded classrooms, and the integration of international students into Dutch society. The plan also focuses on increasing the retention of international graduates and improving student accommodation.

SEO Economic Research's report highlighted that the cap imposed by the outgoing cabinet on international students at Randstad universities resulted in a short-term saving of 80-132 million euros across education funding, student finance, and social provisions. However, they said this relatively small amount would "come at the cost of broader economic damage."

"The impact on the labor market, business climate, and GDP translates into a decline of 3.9 to 4.8 billion euros per year."

The study highlighted the growing retention rate of international students one year after graduation, rising from 40% in 2017–2018 to 57% in 2022–2023. After five years, 25% of them still live in the Netherlands, with 80% in paid employment.

It warned that restrictions on international students would impact not only the state budget and labor market but also Dutch businesses that might consider relocating elsewhere if they couldn't attract enough global talent to the Netherlands.

Universities and UNL, their representative body, urged the government to adopt a more flexible, data-driven policy that aligns recruitment with regional labor needs instead of imposing blanket limits, according to The PIE News.

Van Zijst, UNL public affairs officer, told The PIE that international students were "vital to the Netherlands’ earning capacity and long-term prosperity," highlighting the benefits of a diverse higher education system and their role in filling persistent labor market shortages across sectors from finance to healthcare and education.