Student levy will reinforce public confidence, says UK minister

The government has reiterated its support for international students, as universities grapple with new compliance requirements and the potential introduction of a levy on international student income.

Speaking at the 20th annual British Universities’ International Liaison Association (BUILA) conference this week, Jacqui Smith, minister for skills, addressed the UK’s international and higher education sector, as it navigates incoming changes laid out in the government’s recent immigration white paper.

Smith reaffirmed the government’s support for international students and universities, highlighting their economic and cultural contributions, while also defending tougher oversight measures and the potential introduction of a new financial levy.

“The students that flock here to study make a unique and positive contribution to British life, to our broader culture, and to our economy,” said Smith. “This government’s key mission is sustained economic growth, to improve our country’s prosperity and the lives of working people, and we understand the contribution made by international students to that.”

This government’s key mission is sustained economic growth… and we understand the contribution made by international students to that
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Among the most contentious proposals laid out by government is a levy on the income universities receive from international students. While not yet confirmed, it is being actively considered ahead of the next budget.

“We’re not levying international students directly,” said Smith. “We’re levying the income that universities receive from international students.”

However, as universities face increasing financial pressures, it is widely expected that they will pass this cost on to international students.

Smith reiterated that the policy could offer a way to more visibly redistribute the benefits of international education, noting the government’s intention to reinvest it back into the higher education and skills sector, though further details remain sparse.

“What we’ve committed to is to explore it,” said Smith. Framing it as a way to ensure public understanding and support, she added: “The important thing about [the levy] is it’s a manifestation of the contribution that international students are making to our economy and the higher education system.”

“It isn’t necessarily the case that this has always been understood, or felt, in our communities,” she said.

Smith pointed to figures showing international student fees contributed £12 billion to UK universities’ income in 2023/24. But she stressed that the impact goes beyond university balance sheets, referencing research by the Higher Education Policy Institute showing that each UK parliamentary constituency is £58m better off thanks to international students – equivalent to around £560 per citizen.

“Less frequently acknowledged is international students’ significant economic contribution to their local communities,” she added.

Elsewhere, the government’s broader package of reforms includes the shortening of the Graduate Route to 18 months and a new Basic Compliance Assessment (BCA) for institutions who enroll international students.

“The Graduate Route is here to stay, it’s here to stay in the way in which it’s been outlined in the most recent immigration white paper, which is an internationally attractive offer for students,” Smith told The PIE News.

But it’s the government’s proposal to raise the minimum thresholds for each Basic Compliance Assessment (BCA) metric by five percentage points that has sparked concern. Under the proposed changes, a sponsor must maintain a course enrolment rate of at least 95% and a course completion rate of 90% in order to pass the compliance threshold.

However, the change that has most unsettled the sector is the proposal to tighten the visa refusal rate compliance threshold, halving it from 10% to 5%.

“I know the sector has found the white paper challenging,” acknowledged Smith. “But maintaining the integrity of the immigration route is really important to maintaining public confidence in the legitimacy of our large international student body, which in turn is essential for maintaining our higher education’s excellent reputation.”

Those challenges were made evident this week as it was revealed that Glasgow Caledonian University has halted international student recruitment to courses at risk of being non-compliant to fall in with the newly proposed BCA metrics.

“What we want to do is to make sure that where the system needs improving in terms of compliance, it improves. Not that we are beating the sector with a stick,” said Smith, as she sought to assure stakeholders that the Home Office and UKVI are keen to work collaboratively with universities – creating a feedback loop that enables enforcement while also supporting continuous improvement across the sector.

The UK sector now awaits the publication of the refreshed international education strategy, which is expected later this year. Smith acknowledged that while the current strategy has been successful, the new one must adapt to broader ambitions and a rapidly changing world.

“The strategy must continue to be an effective tool for increasing education exports and reflect the priorities of institutions such as yours,” she told delegates.

“We also want to support wider government strategies and policies and to strengthen our global position, as well as supporting international student recruitment and transnational education.”

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