UK Universities Warn of £620m Hit from International Student Levy
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UK universities could collectively lose more than £620 million annually if the government proceeds with its proposed 6% levy on international student tuition fees, according to new analysis from the Higher Education Policy Institute (HEPI).
Independent researcher Mark Fothergill, who compiled the data, warned the levy could hinder the UK’s ability to compete with other leading study destinations. The measure, first revealed in the government’s recent immigration white paper, has drawn concern across the higher education sector.
The biggest financial blow would fall on large metropolitan universities with high proportions of international students. University College London (UCL), which earns 79% of its fee income from overseas students, could face losses of £42m, while Manchester University and King’s College London (KCL) risk losing £27m and £22m respectively. Nineteen universities could each see losses above £10m.
While ministers argue the levy will raise funds for the “higher education and skills system”, stakeholders are unsure whether the revenue will be reinvested into universities. Fothergill stressed that international students contribute over £10bn in fees to English universities annually, calling the levy “a tax on one of the country’s best-performing sectors.”
HEPI warned institutions may either pass costs onto students, reducing competitiveness or absorb them, leaving less funding for teaching and research. A fall in overseas enrolments could further damage finances, given international fees often subsidise research budgets.
UK Skills Minister Jacqui Smith said the policy would not directly tax students and could highlight their economic contribution to local communities. However, HEPI director Nick Hillman described the plan as “a shadow looming large” over the sector, noting that 72% of providers could be in deficit by 2025–26, with a sector-wide shortfall projected at £1.6bn.
Fothergill also pointed out that Australia rejected a similar levy in recent years, suggesting the UK risks undermining its reputation as one of the most stable study destinations.
With further details expected in the autumn budget, university leaders are urging ministers to reconsider, warning the levy could further strain an already financially pressured sector.
Source: THE PIE NEWS
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