The government might be targeting "phantom students" in its efforts to control migration, a study suggests.
The number of non-EU migrants who come to the UK to study but remain five years later could be about half that ministers claim, say researchers.
The "current self-destructive policy is deterring genuine international students", says the Institute for Public Policy Research.
Ministers say it is crucial to crack down on immigration abuse.
Ministers say official statistics suggest that each year about 91,000 non-EU students do not leave the UK at the end of their studies.
This figure is an extrapolation of data from the International Passenger Survey (IPS) carried out annually by the Home Office on a sample of travellers at UK ports, says the IPPR.
Arrivals who plan to stay more than a year are asked their main reason for coming to the UK - and people who leave after more than a year are asked what they were doing while they were in the UK.
For students, the difference between the two figures is about 90,000 - so reducing this figure would help the government in its objective of cutting overall net migration.
But this approach is based on "dubious evidence", says the report.
Other ways of counting international students put the figure at less than half that suggested by the passenger survey, say the researchers:
- Home Office visa data suggests about 40,000 non-EU students had leave to remain or settle five years later
- The Office of National Statistics annual population survey suggests between 30,000 and 40,000 non-EU students are still in the UK after five years
- The Higher Education Statistics Agency suggests that six months after graduating, 75% of international students in work are employed outside the UK
"The large discrepancy between the other sources' figures and that of the IPS suggest that the latter's 90,000 figure is not reliable enough to be used as a guide for policy," says the report.
"While it is certainly right to root out abuse and tackle bogus colleges where there is robust evidence of wrongdoing, these rules have adversely affected genuine students and institutions, and have undermined the UK's reputation as a desirable destination for international students," it adds.
"Our research suggests that many of the students they are targeting may be phantom students who are no longer in the country," said report author Marley Morris.
The report urges the government to:
- exclude students from net migration cuts and, instead, class them as temporary migrants, as in Australia, Canada and the US
- set out a 10-year plan to expand international education
- reintroduce post-study work visas for key professions
- improve data collection on the migration patterns of international students
Seamus Nevin, head of employment and skills policy at the Institute of Directors, agreed it was time for the government to re-evaluate its approach to international students.
"Restrictive student and post-study visa rules undermine the UK's claim to be an open, outward facing, trading nation," he said.
"Most students who come to the UK to study are not permanent migrants."
And the umbrella group Universities UK urged the government to view international students as "valuable temporary visitors".
A Home Office spokesman said: "We continue to welcome the brightest and best to our world-class institutions. We are also committed to bringing net migration down to sustainable levels as soon as possible and are looking at all visa routes as part of that work."