The UK’s new levy on foreign student fees could cost English universities £620 million a year

The UK government’s plans for a new levy on international student fees could potentially cost English universities £620 million annually.

London business leaders, led by John Dickie, chief executive of BusinessLDN, have slammed the proposal as “misguided,” arguing it could deepen financial struggles for higher education institutions.

Speaking to 250 senior business and political figures in London, Dickie warned that the levy threatens universities already grappling with acute financial pressures.

He called on ministers to abandon the plan and collaborate with higher education leaders to develop a “clear long-term funding plan” instead.

Outlined in the recent immigration White Paper, the levy could impose a six percent tax on universities’ income from international student fees.

The White Paper also proposed slashing graduate visas from two years to 18 months as part of broader visa reforms.

Government officials justified the measures, citing “misuse and exploitation of student visas” and an oversupply of graduates staying in the UK without securing graduate-level jobs.

Critics, however, contend that the £620 million annual hit could destabilize university finances at a critical time.

Net migration to the UK has dropped to 431,000 in the year ending December 2024, driven by fewer visas issued to foreign workers and students.

The debate underscores growing tensions between immigration policy and the economic health of the UK’s higher education sector.

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