Will we rob Peter to pay Pavel?

A European Court ruling on EUstudents' eligibility for loans while studying in Britain is just one recent change that could affect the fortunes of UK universities, reports Harriet Swain

Karim Mijal was so keen to study in the UK rather than his native Belgium that he did not really think about the financial side. Thus it came as a pleasant surprise to discover that, because his family income was low, the British Government would pay his tuition fees. Although, unlike home students, he is responsible for his own maintenance expenses - which he says cost as much in pounds in England as they would in euros in Belgium - he thinks it is worth every penny.

"It is true that the financial aspect is the big issue," he says. "But since I really wanted to study in the UK, I would be ready to pay [even with top-up fees]." Mijal, a second-year politics undergraduate at Essex University and president of the university's European Society, was attracted by the chance to improve his English and to mix with students of other nationalities, as well as by the structure of the course and by the greater teacher contact that UKhigher education offers. The other advantage was that it was not too far away from Belgium.

For his flatmate, Nick Hilhorst, from the Netherlands, the opportunity to learn in the English language was the main motivation, and the UK was cheaper for him than the US. His parents pay his tuition fees, but the Dutch Government contributes E4,000 (£2,780) a year towards maintenance. Even when top-up fees come in, it will still be far cheaper for him to study in Britain than in America, although he may cross the Atlantic to study for his masters.

Since a recent case in the European Court of Justice, European Union students could find studying in the UK even more attractive. The court found in favour of Dany Bidar, a French student. He had been denied a loan when he was studying for an undergraduate degree at University College London although he had been living with his grandmother in the UK for three years. Before the ruling, EU students had to be resident in Britain for at least four years to qualify for maintenance grants and could not count years spent in education towards that. The ruling judged that Britain was justified in giving university loans only to "settled" students, but it stated that Bidar should count as settled because he had "established a genuine link with the society" through his time spent at school.

According to the Department for Education and Skills, the judgment will benefit only a very limited number of EU students who meet the specific criteria of the case. But university admissions officers are keeping an open mind. Mike Nicholson, head of undergraduate admissions at Essex University, agrees with the DFES that only a few applicants to his university will benefit directly from the ruling.

However, he adds, in the context of the Bologna Declaration and general discussions about freedom of movement in European higher education, the Bidar judgment weakens the argument that EU students should get no help with living costs. Whereas Finnish and Dutch students studying in the UKcan take with them grants from their home countries, those from other EU states, including those countries that have just joined the union, cannot.

This means some students will be much freer to move than others, contradicting the spirit of Bologna.

Suzanne Alexander, director of promotions at the British Council, concedes that this is a delicate area. "The free movement of students within the EU is one of the things we signed up to," she says.

In addition, the new UK student finance arrangements coming in next year will allow, for the first time, European students to borrow money from the Student Loans Company to pay tuition fees. Apart from the headache this is likely to become for the SLC - which is conceivably faced with collecting money through, say, the Lithuanian tax system - the distinction between tuition and maintenance loans is a slim one.

Nicholson predicts that it will not be long before another legal challenge is brought over the question of why, if EU students can borrow money for fees, they cannot also borrow funds to allow them to live while they study.

The Bidar decision, he says, strengthens the case for such a challenge.

If circumstances change so that EU students become eligible for maintenance help - and Essex, for one, has taken the possibility into account - it could have a serious impact on how the new fee regime affects UK institutions. It could even force them to open up to EU students some of the headline-grabbing bursaries announced in March by the Office for Fair Access to help students who may be put off university by financial considerations. As the average income in many new EU countries is considerably lower than that in the UK, this could prove disastrous for poor British students. "That could throw out all the calculations made by universities," Nicholson says.

As it is, Polish students who return to their home country, for example, are likely to take much longer to pay off their UK student loans than British students because they are likely to take much longer to reach the income level at which they become eligible for repayments.

Students from other EU countries make up about 5 per cent of the UK higher education cohort. In 2001-02, there were about 80,000 students from other EU countries studying in the UK, nearly 50,000 of them undergraduates.

Another 17,600 came in as exchange students on Erasmus programmes.

Figures from the Higher Education Statistics Agency show that in 2002-03, business studies was the most popular choice of subject, followed by languages, engineering and technology, and social studies.JGreeks were the most numerous, particularly among EU undergraduates, followed by Germans, French, Spanish and Italians.

Anecdotal evidence from Essex, which has just under 200 EU undergraduates from outside the UK, suggests that business and economics are attractive to Greeks, while law has traditionally drawn Cypriots. Scandinavians tend to choose social sciences, whereas economics is popular among students from Germany and Luxembourg.

Shirley Patrick, acting international officer for Europe at Portsmouth University, agrees that the majority of the university's Greek students - the largest single EU group at the university - are on business courses, while technology and the environment are proving popular among students from countries that have recently joined the EU. She says many EU students also take translation studies and English.

But where these students come from, what they want to study and where they want to study is a shifting picture, dependent on politics at institutional, national and EU level, as well as on both tradition and fashion.

Take the impact of UK politics. Recent moves to widen participation, and shortages of home applicants in some subjects, have driven UK universities to look to Europe to fill some places. This is particularly the case in subjects such as engineering, economics and languages, which are much more popular and have a higher standing in many other EU countries than in the UK. Alexander says recruiting EU students helps UK universities meet all of their varying, and sometimes contradictory, targets of widening participation and quality of admissions.

Then there are top-up fees. Patrick predicts that these are bound to have an impact on EU student recruitment, although it is not clear yet what that is likely to be. The British Council warned in 2003 that large numbers of EU students would opt to study elsewhere, although more recent headlines have suggested that the UK risks being overwhelmed by EU students in the wake of the May 2004 accession by ten states including Slovenia, Cyprus and Poland.

So EU politics clearly also have an effect. A report by the Higher Education Policy Institute suggests that, as a result of accession countries becoming EU members, the numbers of students from these countries studying in Britain by 2010 could leap by between 20,000 and 30,000.

The Bologna Declaration is also proving significant because the structure of UK degree programmes, which has proved attractive to many EU students, is no longer unique.

Nicholson says: "Traditionally, Germans would come because they knew they could get a first degree in three years rather than ploughing on for seven years in Germany. Most universities there have now changed as part of the Bologna Process."

Finally, student choices are influenced by the politics of their own countries. One reason that Greece has been the top source of EU students studying in the UK is that the Greek higher education system used to be relatively limited, making it difficult for students to study what and where they wanted. More recently, the Greek Government has become so concerned by the number of students studying abroad that it has increased the number of places in Greek universities, which has had a knock-on effect on UK admissions.

Britain still has a huge advantage in recruiting from the rest of Europe because of the English language and the reputation of its education system.

But Nicholson warns that British institutions are beginning to face stiff competition.

Moreover, the fallout from the Bidar case could turn a net financial benefit to the UK from these students (through their living expenditure and the income tax they pay if, as is common, they stay on to work in this country) into a net financial loss.

It may, nevertheless, be a price worth paying for cosmopolitanism - at least for students such as Mijal and Hilhorst and their counterparts across Europe, including those in the UK.