England’s universities face £330m loss under new £925-per-international-student levy

On the day Chancellor Rachel Reeves unveiled the government’s autumn budget, the Department of Education launched an open consultation on the technical design of its controversial international student levy – confirming that England’s universities will be charged a flat fee of £925 per international student per year from August 2028.

The Department said the consultation aims to “ensure the effective introduction and delivery” of the levy, which will be collected by the Office for Students and applied to all higher education providers recruiting international students.

Publishing the technical consultation, the government said: “The international student levy will require providers to pay a flat fee of £925 per international student per year… It will take effect from 1 August 2028.”

The proceeds will be invested into higher education and skills, with ministers stating that the levy will help fund the reintroduction of targeted maintenance grants for disadvantaged students – a policy framed as part of the government’s Plan for Change.

Under the proposed design, each provider will receive an allowance covering their first 220 international students each year – equivalent to exempting roughly £200,000 of levy liability. The government says this is intended to reduce disproportionate burdens on smaller or specialist institutions and will be “kept under review”.

Draft legislation is due to be published in 2026, with further technical consultation scheduled before the levy is included in a future Finance Bill. The new charge itself will not begin until the 2028/29 academic year, giving institutions “time to plan for its introduction”.

The international student levy will apply to England only and once it is introduced, the government projects it will raise roughly £445 million in year one (2028/29) rising to £465 million in year two (2029/30) and £480 million in year three (2030/31).

Meanwhile, it projects that the higher-education sector could see a net income loss of £270m in 2028/29, increasing to £300m in 2029/30 and £330m in 2030/31.

In terms of student enrolments lost due to the implementation of the levy, the government’s impact analysis estimates a loss of 14,000 international student enrolments in the initial year, rising to 16,500 fewer students by 2030/31.

The levy was first floated in May’s immigration white paper, with a 6% levy on universities’ international fee income originally modelled, sparking widespread concern across a sector already facing hefty deficits.

Jess Lister, head of higher education at Public First, said that today’s clarification of a flat £925 per-student fee “marks a real reversal of fortune” for UK universities.

UK universities were politically outmanoeuvred earlier this year when Bridget Phillipson framed the new international student levy as a mechanism to pay for maintenance grants for domestic students

Jess Lister, Public First

“UK universities were politically outmanoeuvred earlier this year when Bridget Phillipson framed the new international student levy as a mechanism to pay for maintenance grants for domestic students,” she told The PIE.

“Far from the open-ended percentage revenue grab many had feared, the government has opted for a more predictable, contained charge,” commented Lister.

“The new structure allows ministers to preserve the symbolism of ‘making international students contribute’, while avoiding the destabilising consequences of a more aggressive levy. For the sector – and for the Russell Group in particular – this represents a rare lobbying win.”

Tim Bradshaw, chief executive of the Russell Group, said that the levy will have a significant impact on universities’ ability to invest in teaching, research and communities, but “a flat rate fee should avoid the complexities of a percentage-based model and limit the potential for gaming the system”.

Bradshaw affirmed that the UK “remains a fantastic study destination” and said the government should continue to “take every opportunity to send a positive welcoming message to international students”.

“We’re also pleased to see financial pressures being eased for some UK students through the reintroduction of maintenance grants and await more detail,” the Russell Group chief executive added.

A spokesperson for London Business School welcomed the decision to avoid a 6% levy on international student fees, citing significant consequences for higher education and knock-on effects to the national economy.

“Whilst we remain concerned about the imposition of any levy on education, which is one of Britain’s most successful exports, a flat-rate levy will help to protect specialist, world-leading institutions such as London Business School from a disproportionate impact, ultimately supporting the UK as a leading place to study and do business.”

The post England’s universities face £330m loss under new £925-per-international-student levy appeared first on The PIE News.