A decline in international students applying for visas is threatening to exacerbate the financial woes of some English universities, according to higher education insiders.
Despite a recent tuition fee increase for UK students to £9,535—the first hike in eight years—university officials report that financial challenges persist, with additional course closures and redundancies under consideration.
This fee rise has been offset by an increase in employer national insurance contributions, leaving many institutions financially worse off, sources told the Observer.
The fee increase, which cannot be applied to current students but only to new enrollees, has been largely negated by these additional costs.
Further exacerbating the situation, official statistics reveal a 13% drop in study visa applications up to the end of January compared to the previous year, largely due to tighter restrictions on students bringing dependants.
Universities often rely on the higher fees paid by international students to subsidize domestic student courses and research.
The financial gap faced by universities is substantial, with an annual shortfall of £5.3 billion for research and around £1.7 billion for teaching domestic undergraduates, and these deficits are reportedly increasing each year.
Vice-chancellors are preparing to challenge further damaging regulations and narratives affecting international student recruitment as part of an ongoing revision of the government’s strategy for overseas students, potentially setting the stage for a conflict between the education department and the Home Office.
Amidst these challenges, new research indicates that public sentiment towards international students is generally positive, with 61% of people preferring to maintain or increase current levels of international student migration, according to a poll included in a report by the British Future think tank.
Only 28% of respondents consider international students as migrants, although there are concerns about the impact on housing.
Heather Rolfe, research director at British Future, emphasized the need for universities to assure the public that international recruitment does not disadvantage domestic students and that local issues, such as housing pressures, are managed effectively.
Nick Hillman, director of the Higher Education Policy Institute, remarked that while the decrease in visa applications could have been more severe, the financial state of the sector remains troubled.
He highlighted that the recent tuition fee increase for domestic students has not alleviated these financial pressures as it has been entirely consumed by the national insurance hike.
However, there are some hopeful signs, including supportive remarks from Education Secretary Bridget Phillipson and increasing challenges faced by international students in other popular study destinations like the US, Canada, and Australia, which may position the UK as a more attractive option.
Harry Anderson, deputy director at Universities UK International, emphasized the UK’s leading status in attracting international students and the substantial economic contributions they make, amounting to £41.9 billion annually.
Ben Moore of the Russell Group suggested that the popularity of the UK with international students is a “genuine UK success story,” and called for continued supportive immigration policies to maintain this status.
