UK universities are facing a serious financial crisis as the number of international students declines. Many universities have come to rely heavily on income from these students, but recent changes in visa rules and increasing competition have caused a significant drop in applications. Experts now warn that this could lead to some institutions closing down.
In recent years, international students have become a key source of income for many UK universities. Unlike domestic students, who pay a capped annual fee of £9,250, international students are charged much higher fees, ranging from £11,000 to over £60,000 depending on the course and institution. In the 2022/23 academic year, UK universities earned £11.8 billion from international students, accounting for 23% of their total income.
However, this reliance has now turned into a potential crisis. A report from the Higher Education Policy Institute (HEPI) warns that foreign student income, once considered a bonus for universities, has now become essential for their survival.
The UK government’s recent changes to visa rules, particularly the restriction on students bringing dependents, have contributed to the decline in international student numbers. The Home Office has reported a 17% drop in visa applications for international students for the current academic year. Postgraduate courses have been hit particularly hard, with Russell Group universities reporting a 10% decrease in master’s applications.
Experts believe this decline could get worse in the coming years, putting around 40% of UK universities at risk of running a deficit. In fact, the Office for Students, the sector’s watchdog, has already reported that 40% of universities are expected to make a loss this year.
While prestigious universities like Oxford, Cambridge, and University College London continue to attract international students, smaller and less selective institutions are struggling. Some universities, such as those in Bradford, East London, Hertfordshire, and Coventry, rely on foreign students for up to 55% of their income. With the decline in international admissions, these institutions are facing serious financial difficulties.
The University of East Anglia, for example, suffered a 40% drop in international student numbers last year. Although a new vice chancellor managed to turn the situation around by attracting more foreign students, this approach may not be possible for all universities.
One possible solution to the financial shortfall is increasing tuition fees for domestic students. Currently, universities in the UK lose money on each domestic student, as the fees have not kept pace with inflation. The Higher Education Policy Institute suggests raising fees from £9,250 to £12,000 to help universities cover their costs. However, this idea is politically unpopular, as many people believe fees should be reduced or scrapped altogether.
As universities face these financial challenges, many are hoping to recruit more international students. However, the government’s push to reduce migration complicates this strategy. If international student numbers continue to fall, experts warn that some
