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Overseas student numbers are "flatlining" and the government must "press reset" to tempt them back, says a cross-party group of MPs and Lords.

International students bring huge benefits, but restrictive policies mean they increasingly go to the US, Canada or Australia, says the report.

A key recommendation is to remove students from immigration targets.

This contradicts a recent Migration Advisory Committee report which found no clear case for such a change.

However, the All Party Parliamentary Group (APPG) for International Students argues that the UK has few greater assets than its education system, which delivers prosperity and opportunity across the regions and nations of the UK.

"The desire to study in our universities, colleges and schools has made us second only to the US as a destination of choice, bringing billions in export earnings and enormous influence," argue the group's co chairmen Paul Blomfield MP and Lord Bilimoria in their foreword to the report.

International students who choose the UK provide the opportunity for UK students to study in a multinational classroom and "bring vitality and tremendous cultural contributions to our campuses and communities", they add.

But they warn that in recent years, international student recruitment has fallen victim to the wider debate on migration, and efforts to create a "hostile environment".

'Self-defeating course'

In particular, the report says, measures like the ending of post-study work visas in 2012 have contributed to international students opting for competitor countries.

"For too long, the drive to reduce net migration has trumped the growth of our world-class education system.

"Our campuses, local economies and global standing are suffering as a result."

Proposals to reverse "this self-defeating course" include:

a "clear and ambitious" target to grow international student numbers and a commitment to remove them from targets to reduce migration

a post-study work visa allowing up to two years of work experience in the UK

an EU deal giving unrestricted movement for students and researchers and clarity on funding

export earnings from education to be included in trade strategy

clear, welcoming and consistent messages to international students

employment support for international students in their home countries

Former Education Secretary and APPG member Nicky Morgan, added that the impact of international students was seen in every constituency in the UK, "as an economic, cultural and social benefit".

"This report is a blueprint for ensuring that benefit remains and grows for the foreseeable future," she added.

In a statement, the government promised to consider the APPG report carefully, alongside the recommendations of the Migration Advisory Committee.

"We recognise the cultural and financial contribution which international students make to the UK and our world-class higher education system.

"That's why there is no limit on the number of international students who can come to study in the UK."

The spokeswoman pointed out that graduates are currently eligible to stay in the UK if they get graduate level jobs or internships, or apply to set up business here. Completing PhD students can stay an extra year to set up as entrepreneurs or to gain work experience.