An updated impact assessment puts UK providers’ lost fees from the international student levy at £1,010m over its first three years.
The fee-loss estimate exceeds the government’s earlier figure
The charge is £925 per international student. The newly stated cost is £110m more than universities had previously been told to expect; the government’s earlier estimate put their losses at £900m. These figures describe fee income providers lose, while the levy is a charge applied per international student. The per-student charge and the projected loss therefore measure different parts of the policy’s financial impact.¹
The levy is projected to raise £1,340m. That is below the £1,390m forecast in a 2025 impact assessment. The projected revenue has a designated use: maintenance loans for domestic students. The income raised by the levy and the fees providers lose are separate totals, so the revenue projection does not cancel out the estimated loss to universities.¹
The projected fall in student numbers is smaller than before
The updated estimate puts the reduction in international student arrivals at 11,500 over the levy’s first seven years. A 2025 assessment had projected a loss of 16,500 students. The government said future international student numbers were “inherently uncertain”, framing the figures as projections rather than a settled count of how many students will choose the UK.¹
The government said future international student numbers were “inherently uncertain”, framing the figures as projections rather than a settled count of how many students will choose the UK.¹
The government pointed to competition in the international student market and several factors that shape inflows to the UK. These include recruitment strategies used by international competitors, exchange rates and other economic variables. The assessment’s student-number projection sits within that wider set of influences, rather than being a count determined by the levy alone.¹
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Read More →The impact assessment also says providers will not be affected equally. Higher-ranking universities are expected to pass a larger share of levy costs to international students without a comparable recruitment drop-off to lower-ranking institutions. That creates a two-tier pattern: the ability to transfer costs to students differs by institution, as does the risk that higher charges could be followed by fewer recruits.¹
The assessment separates universities into two tiers
Tier 1 consists of Oxford University, Cambridge University and Imperial College London. Tier 2 covers the remaining universities in the Complete University Guide’s top 20. The assessment’s grouping links a university’s position in this ranking-based classification to the different capacity it describes for passing levy costs on to international students.¹
Jess Lister, director (education) at PF Global, called the announcement timely because the sector was gearing up for another attempt to quash the levy. Lister said earlier modelling from Public First had rejected the assumption that providers could simply pass on all the costs, which the Home Office had been making. Her comments point to the dispute over who ultimately absorbs the charge.¹
Jess Lister, director (education) at PF Global, called the announcement timely because the sector was gearing up for another attempt to quash the levy.
Lister also said she was pleased that Public First’s “very rapid turn around modelling” was holding up a year and a half later, now that the government had completed its own analysis. Her response connects the updated assessment to a previous argument about how much of the levy universities can shift to international students, rather than absorb through reduced fee income.¹
The levy remains contested as the government changes the Graduate Route
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Read More →The UK’s higher education sector has strongly criticised the levy. Its detractors have warned that policy makers are risking one of the UK’s most lucrative industries. The new estimates add projected losses in fees and student numbers to that debate, while the government’s stated purpose for the revenue is to fund maintenance loans for domestic students.¹
HM Treasury also inserted a line into its 2026 Budget on extending the Graduate Route back up to two years for graduates of “high-compliance universities” with strong labour market outcomes. The change links the route’s duration to the type of institution a graduate attended and its labour market outcomes, alongside the separate levy policy affecting international student fees.¹
Levy splits risk by university tier
The levy’s impact now depends on which university you choose. Tier 1 institutions like Oxford, Cambridge and Imperial can pass more of the £925 per-student charge to international students without losing recruits, while lower-ranked universities face a sharper trade-off between fees and enrolment. If you are weighing an offer, ask how the institution plans to absorb the projected £1,010m fee loss, and whether it is in Tier 2 or below. The government’s earlier £900m estimate was too low, so the real pressure on non-elite providers is greater than previously thought.¹
The Graduate Route change ties post-study work rights to your university’s compliance and labour market outcomes. A two-year extension applies only to graduates of high-compliance universities, so your ability to stay and work after study depends on the institution you attend, not just your degree. This makes university choice a career decision, not just an academic one. The levy also funds domestic maintenance loans, so international fee income falls while domestic support rises. Plan for the possibility that lower-ranked universities may reduce services or raise other costs to offset the shortfall.¹
Tier 1 institutions like Oxford, Cambridge and Imperial can pass more of the £925 per-student charge to international students without losing recruits, while lower-ranked universities face a sharper trade-off between fees and enrolment.
Sources
Written by Career Ahead AI. AI can make mistakes, so verify key facts. Report errors to support@careeraheadonline.com
