International student cap to cut GDP by €4bn, report warns

November 18, 2025

International student cap to cut GDP by €4bn, report warns

Ahead of a general election on 29 October to replace the existing caretaker government in the Netherlands, a new report provides evidence that an existing government proposal to cap international students will translate into huge financial losses for Dutch universities and the nation.

SEO Amsterdam Economics found that restricting international student numbers would lead to an annual gross domestic product (GDP) loss of €4 billion (US$4.6 billion) to €5 billion (US$5.8 billion), far outweighing any short-term budget savings. Regions, businesses and society as a whole will feel the substantial economic consequences, it argues.

It is estimated that the Randstad region, which is home to five major universities – Leiden University, Utrecht University, Erasmus University Rotterdam, University of Amsterdam, and Vrije Universiteit Amsterdam – and accounts for half of the Dutch GDP, will experience the worst effects of the caps – 82% of the loss will occur here, the report notes. The most severely affected sectors will be business services (39%), financial institutions (20%), and the public sector (10%).

The report, Out of Balance without Internationalisation?, was commissioned by the five Randstad universities and was released in October this year.

It speaks directly to the Dutch government’s controversial “Internationalisation in Balance” bill, which gives the government strong powers to intervene to reduce the inflow of international students – a move that will result in budget cuts to all universities.

While an earlier proposal to introduce a Toets Anderstalig Onderwijs (a test to examine whether a programme is allowed to be taught in a language that isn’t Dutch) has been dropped from the bill, it will still require universities to report annually on their internationalisation strategies and gives power to the government to set conditions on English-taught programmes where necessary.

The bill, proposed by former Minister of Education, Culture and Science Robbert Dijkgraaf, is expected to be discussed in the House of Representatives early next year, with possible consideration in the Senate in mid-2026.

National talent strategy

The position of the country’s universities, which have pushed to retain some control over the number of international students they admit, has been bolstered by the latest SEO report.

“International students are vital to the Netherlands’ earning capacity and long-term prosperity. They contribute directly to the quality and diversity of higher education, help fill persistent labour market shortages in key sectors such as business services, finance, healthcare, government, and education, and strengthen the international position of the Dutch knowledge economy,” said Femke van Zijst, information officer at Universities Netherlands (UNL), a trade group of government-funded research universities.

“That is why Dutch universities urge policymakers to take a long-term, evidence-based view and develop a National Talent Strategy that recognises international students as essential contributors to the country’s economic and societal vitality both for the Randstad and the country.”

Van Zijst told University World News in an email that Dutch universities had developed a “ self-regulation proposal ” published in April 2025 that gives institutions “the tools to responsibly manage international student intake within national frameworks.

“The proposal allows universities to adjust recruitment and admissions at the programme level, taking into account regional context, labour market needs, and teaching capacity,” she said.

“This differentiated, data-informed approach prevents one-size-fits-all national caps and ensures that the Netherlands remains both attractive and sustainable as a study destination.

“Several universities have decided to switch specific programmes to Dutch, mainly larger programmes like psychology or business.

“Universities have already begun implementing measures such as improved intake planning, selective English-taught provision and offering language programmes for their staff to learn the Dutch language,” said Van Zijst.

As reported earlier by University World News, the proposal by UNL that Randstad universities scrap a number of English-taught programmes – a proposal that heavily affects bachelor psychology programmes at five major universities – was met with strong criticism from academics and students.

Contributions of international students

According to the SEO Amsterdam Economics report, the share of international graduates who stay in the Netherlands and contribute to the economy during the first year after graduation has risen from 40% (cohort 2017 to 2018) to 57% (cohort 2022 to 2023).

“After five years, 25% still live in the Netherlands, of whom 80% have paid employment,” the report states.

It argues that in addition to the impact on the labour market and associated GDP effects, fewer available highly educated international personnel are expected to have a negative impact on the business climate in the country.

It notes that other research shows that approximately 30% of companies with a relatively large number of theoretically trained foreign employees have indicated that they will relocate growth plans and/or business activities abroad if they cannot attract sufficient talent.

While no research was conducted into the consequences for the housing market for students, the report states it is possible that fewer international students would “reduce the pressure on the housing market for students, resulting in shorter waiting lists and potentially lower rents”.

It also pointed to a “net saving for the central government” of €80 to €132 million, although it points out that such a saving – calculated by examining lost taxes and premiums and savings on social benefits, education funding and student loans was “small compared to the GDP loss”.

The report notes that consequences of fewer international students that were “less economic in nature, such as the impact on the quality of education and accessibility of university education” were not examined.

Those benefits were outlined by Margrethe Jonkman, chair of the executive board of Vrije Universiteit (VU) Amsterdam, who told VU News: “International students enrich our education. The world is becoming increasingly interconnected. As a university, we believe it is important that students gain experience with different perspectives during their studies.

“This experience is not only crucial for personal development but also essential for future careers and valuable from the perspective of companies and organisations. That is why we want to work together to ensure the necessary intake of international students, who are of great importance to both the region and the Randstad.”

Annelien Bredenoord, chair of the executive board of Erasmus University Rotterdam and a key stakeholder in research, also voiced strong opposition to any move that restricts international student numbers.

“Companies need well-qualified employees across various sectors – not just engineers, but economists, business administrators, and psychologists alike,” she said.

Bredenoord also advocates for a comprehensive national talent strategy that values diverse educational backgrounds as much as technical skills. She warns that with a demographic decline leading to fewer Dutch students, other countries are ramping up efforts to lure international talent.

“The Netherlands must do everything possible to maintain its appeal to global talent,” she told Franetic.

Investment in science and higher education

Reacting to the SEO report, Associate Professor Eddie Brummelman from the University of Amsterdam, who is chair of the Dutch Young Academy, told University World News the academy had published several statements on the devastating consequences of budget cuts in science and higher education and the reduction in the number of international students.

“We will have elections soon. In this statement, we urge political parties (and the to-be-formed coalition) to invest in science and higher education.”

Brummelman said it is only with science and scholarship that the Netherlands can tackle the major challenges of tomorrow.

“After all, science not only boosts the economy, it also strengthens the resilience of Dutch society. Therefore, we urge the government to invest at least 3% of GDP in research and development (like our neighbouring countries do), to invest in education, and to protect and invest in international talent,” he noted.

Brummelman also referred to a statement in which the academy called for the government to scrap the Internationalisation in Balance bill and preserve internationalisation to strengthen Dutch society.

“In public discourse, internationalisation has been mentioned in relation to several problems facing universities and the cities in which they operate.

“Crucially, however, the extent to which internationalisation causes or contributes to these problems is often exaggerated, conflated with other issues, or unsupported by facts.

“This has led, particularly in political discourse, to an atmosphere in which the [bill], as well as the recent self-regulation measures, no longer appear to genuinely address the actual problems but merely serve as an instrument to keep international students out. We call on academics to join together in resisting this harmful atmosphere and policy,” he added.

Göran Melin, a higher education expert at the Technopolis Group in Stockholm, said all evidence points to "significant economic and social gain from international students, as long as admittance and integration are careful and follow sound principles.

“This is true for the Netherlands just as well as for other Western countries with declining populations in parallel to the business sector’s loudly expressed demand for a highly educated and qualified workforce,” Melin said.

“Cutting the numbers of international students just for the sake of receiving fewer must be seen as the most counterproductive politics. As the leading Dutch universities furthermore point out, education quality will certainly suffer too, besides the obvious measurable negative effects on the national economy.”

A ‘less alarming’ context?

Hans de Wit, professor emeritus and distinguished fellow at the Boston College Center for International Higher Education in the United States, told University World News the upcoming elections were important in respect of the Internationalisation in Balance Bill and the higher education budget.

“As the three parties which were most in favour of the law and budget cuts will almost certainly not be in the next government (the PVV [Party for Freedom] of Wilders, although in the polls still the biggest, excluded by the others, and BBB [Farmer Citizen Movement] and NCS [New Social Contract] encountering extremely big losses), there might be a less alarming context than is currently the case, although one cannot be too optimistic either,” he said.

Jo Ritzen, a professorial fellow of International Economics of Science, Technology and Higher Education at the UNU Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT) and Maastricht Graduate School of Governance, a previous minister for education and science and former president of Maastricht University, told University World News there could be no better way for the Dutch government “to shoot itself in the foot than by limiting the number of foreign students” in the country.

He said the long-run impact of the move would be “devastating”.

“Europe needs more social cohesion to maintain its democracy and its competitiveness in the arena where the US and China are increasingly dominant. Increasing cross-border studies is an effective means. Limiting foreign students means loss of cohesion and competitiveness,” he noted.

Ritzen said the “proper answer” to “too many foreign students” was: “Manage by diplomacy and compromise to have more European funding for foreign European students” and “encourage Dutch students to study abroad”.

Student housing

Independent higher education strategist Peter van der Hijden said while the report from SEO represented “compelling arguments” and that it was clear that international students bring cross-sector benefits “outweighing costs by far”, the housing shortage was the “killer argument” – a “big unease that is played out in the asylum seeker debate as well, especially now in the run-up to the 29 October elections”.

Van der Hijden said the issue of student housing was also on the radar of EU Housing Commissioner Dan Jørgensen, who will present his European Affordable Housing Plan in early 2026.

“It is high time to consider unorthodox measures, accelerated procedures and public-private partnerships. The Class Foundation based in Amsterdam has made a number of suggestions for an ‘EU Action Plan to Student Housing’,” he said.

“Next to that, my mantra: Universities for their part should open their degree-locked learning offer so that certified citizen-learners become allies and feel part of the local academic community,” he concluded.