UK Universities Brace for £330 Million Hit from New International Student Tax
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England’s higher education sector is facing a potentially devastating financial blow, with new government plans set to cost universities an estimated £330 million a year by 2030/31. The figure comes from the government’s own modelling on its controversial new policy: a flat-rate levy of £925 per international student, per year, effective from August 2028.
The levy, which will be collected by the Office for Students (OfS), is designed to raise revenue for the reintroduction of targeted maintenance grants for disadvantaged domestic students. While the intention to support local learners is commendable, the price tag for universities, which are already navigating choppy financial waters, is causing widespread alarm.
The official impact analysis also predicts a significant drop in student numbers, estimating 16,500 fewer international enrolments by 2030/31. This is a critical concern, as fees from overseas students currently serve as a vital financial lifeline, cross-subsidising teaching, and world-class research across many institutions. The sector has warned repeatedly that this reliance on international income has only grown due to years of frozen domestic tuition fees and stagnant public funding.
For the people who make up our universities; the lecturers, researchers, support staff, and, crucially, the students, these millions are not just abstract numbers. A reduction in income of this magnitude threatens job losses, cuts to essential services, and a decline in the UK’s research output. It could also force universities to raise international student fees further to claw back the cost, making a British education even less accessible and competitive against global rivals like Australia and Canada.
The flat-rate structure, though simplified from an earlier percentage-based proposal, is still viewed by many as a short-sighted tax on one of Britain’s most successful exports. Universities argue that it sends a negative message to the global talent pool, risking the academic and cultural diversity that enriches the student experience for everyone.
The International Student Levy presents a clear policy dilemma: how to support disadvantaged domestic students without destabilising the broader higher education system. While the government is committed to the plan, the sector fears the long-term consequences of this annual financial hit. The £330 million projected loss is more than just a deficit; it represents a significant gamble with the financial health and global reputation of English universities. As the 2028 start date looms, institutions will be forced to make difficult choices that could fundamentally reshape the future of British academia and its standing on the world stage.
Source: THE PIE NEWS
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