Written evidence by UK Council for International Student Affairs (UKCISA) (HEF0039)

 

Education Committee

Higher Education and Funding: Threat of Insolvency and International Students

 

Who we are and who we represent

  1. The UK Council for International Student Affairs (UKCISA) is the UK’s national advisory body supporting the interests of international students and those who work with them.
  2. UKCISA has 414 members. This total includes every publicly funded university in the UK, students unions, publicly funded higher and further education colleges which are active internationally, pathway providers, independent schools and private colleges, and other organisations supporting international students in the UK.
  3. UKCISA provides advice and support directly to members and international students, through our website and advice lines (open Monday to Friday), and our members’ forum. Our advice lines and forum provide a space for members and students to raise concerns or highlight emerging issues related to international student policy – these insights, as well as those identified on our members advice line, inform UKCISA advocacy and response to government on all policy areas related to international students.
  4. UKCISA is regulated by the Immigration Advice Authority (IAA) to provide immigration advice to prospective and current international students in the UK.
  5. UKCISA conducts regular pulse student surveys and other activities to monitor the impact of proposed and actual government policy on international students.
  6. UKCISA delivers the WeAreInternational Student Ambassador programme, capturing and disseminating the authentic lived experience of the UK’s international students.
  7. Our diverse membership and direct engagement with international students ensure that our advocacy is informed and insightful, representing the breadth of the UK education sector recruiting international students.

How international students contribute to the UK

  1. International students bring significant economic and cultural benefits to UK higher education institutions, their peers, and the wider community. Most importantly, they:
  1. Recent research by Public First found that international students raise domestic living standards in every UK constituency. On average, because of international students in the UK:
  1. These benefits extend beyond education, supporting jobs and services across the country, including in constituencies without a university.
  2. Research published in May 2025 indicates that the gross export value of higher education from international students is £20.1bn a year. In 26 constituencies in the country, higher education is the single largest export sector, supporting 183,000 jobs.

International Student statistics

  1. International students consistently make up a significant proportion of the overall student body, approximately 25% in 2023/24.

Figure 1: International student numbers in the UK

Source: www.hesa.ac.uk/data-and-analysis/students

  1. The largest proportion of international students are at postgraduate taught levels of study, though this has declined since the introduction of changes to the dependant policy in January 2024.
  2. Government data shows a decline in international student numbers since changes to the dependant policy on 1 January 2024. Official statistics show that in 2024, there were 393,125 sponsored study visas granted to main applicants, 14% fewer than in 2023.

Figure 2: Student visas granted to main applicants

Source - Gov.uk, 27 February 2025

  1. Some countries saw a particularly sharp drop in numbers. Nigeria showed a 63% main applicant decrease in quarter 4 2024, in comparison to a 134% increase in the previous year. India also showed a decline of 43% in the same quarter, compared to a 62% increase in the previous year.
  2. This decrease is likely to be caused by immigration policy as well as the increased cost of living and variable exchange rates that impact on the value of currencies against GBP.

Key immigration policy and contextual changes since May 2023

How will current Government policies affect the financial stability of higher education institutions?

What implications will these policies have on future tuition fee increases?

  1. A recent assessment by the Office for Students (OfS) found that the sector experienced its third consecutive annual decline in financial performance, based on actual data from 2022–24 and forecasts for 2024–25.
  2. The report showed that student recruitment was significantly below forecasts for 2023–24, and that a major factor is the difficulty in recruiting international students, especially since January 2024.
  3. OfS reports that this shortfall is contributing directly to the sector’s deteriorating financial health, and that institutions with a greater reliance on international student income are more exposed.
  4. OfS noted that the sector is vulnerable to further shocks in international recruitment.

Impact of immigration policy changes and proposals

  1. As the statistics in section show, the more restrictive dependant policy from 1 January 2024 led to a significant decrease in the number of international students coming to the UK to follow a postgraduate taught programme.
  2. No impact assessment has been carried out on the policy and its likely disproportionate effect on female and disabled students.
  3. Following the publication of the Immigration White Paper in May 2025, our members have highlighted several concerns that would have further implications for the attractiveness of the UK as a study destination and, indirectly, the financial stability of sponsoring institutions.

Proposal: Levy on international tuition fees

  1. The proposed levy on international tuition fees is a major concern, as it would place additional financial pressure on universities.
  2. The government’s proposal assumes institutions will raise fees to cover the levy, but many of our members report that their markets will not be able to absorb this, as any fee increase risks driving students to more affordable countries.
  3. If a levy is not reinvested into the international student experience, it may damage the UK’s reputation and perceived value. International students may perceive that they are paying a premium but those funds are not directed back into their experience.

Proposal: Reform of the Basic Compliance Assessment framework

  1. The Immigration White Paper proposes to raise the Basic Compliance Assessment (BCA) threshold for enrolment and course completion rates at sponsoring institutions by 5% to 95% and 90% respectively, and lower the maximum visa refusal rate from 10% to 5%. Further strengthening of these percentages will have a disproportionate effect on institutions with smaller student populations. 

 

  1. A recent survey of our members to explore the anticipated impact of the increased restrictions found that members are most concerned about the proposal to lower the permitted visa refusal rate. Changes in the refusal rate would hamper sustainable recruitment in institutions, leading to potential withdrawal from certain markets and further limiting ability to recruit genuine students from these markets. 

 

  1. When processing an immigration application, a UK Visas and Immigration (UKVI) caseworker will make decisions on the credibility of a student. These decisions are subjective. This means sponsors do not have control over UKVI decision-making, nor do they receive a transcript or a recording of how this decision was made. Applicants themselves do not readily receive a transcript or recording, and have to submit a Subject Access Request which can be a lengthy process and can go beyond the deadline for administrative review.

 

  1. While an administrative review is possible, the review process often takes time (published information says it can take up to 12 months), and as students must choose to either challenge an incorrect decision or make a new application (they cannot do both), time pressures often dictate that students will not challenge the incorrect decision. Any changes to the metrics will reduce the buffer that sponsoring institutions have to manage UKVI’s subjective decisions on visa applications.

 

  1. The White Paper does not propose to improve the data available from UKVI on decision outcomes for student visa applications. Currently, sponsors do not have access to timely data and cannot assess how close they might be to the threshold. Access to high-quality data is key to enable institutions to operate within the proposed BCA metrics. If the Government were to implement the proposed changes without providing accurate real-time data to sponsors, sponsors would not have the opportunity to identify and address issues before reputational damage is sustained. This could limit their ability to recruit and therefore would negatively impact the financial sustainability of compliant student sponsors.

 

  1. The White Paper proposes to RAG rate sponsors on their performance against these metrics. Interventions for sponsors who are identified as at-risk include restricting the ability to recruit international students, which would have an immediate effect on the institution’s ability to generate international tuition fee income. Given that so much data used by UKVI to assess performance against metrics is not available to sponsors to inform their actions, we recommend that this RAG rating is not implemented. If it were to go ahead, it is vital that this rating is held in confidence by UKVI and only shared with the institution in question.  Publication of anything other than a green rating would impact the institution’s ability to recruit internationally and potentially affect their domestic reputation.

 

  1. The White Paper acknowledges that the student route is generally compliant. UKCISA members work with government colleagues across UKVI to ensure robust and reactive processes are in place to comply with the current rigorous BCA requirements, while maintaining stringent checks on applicants and students, and undertaking robust audit processes. The disproportionate action proposed across all student sponsors will negatively affect compliant institutions and will not limit sanctions to non-compliant institutions.

Proposal: Reducing the graduate route visa period

  1. Reducing the Graduate Route from two years to 18 months is perceived as a weakened offer by international students. Furthermore, the lack of clarity around the implementation of changes to the Graduate Route has led to an increased demand for advice from current and prospective students about who will be affected and when. We and our members are unable to provide clarity on this.
  2. There is no information on when the policy change will come into force, or which cohorts will be impacted. This risks driving students to countries with a firmer post-study work policy in place. This undermines the UK’s competitiveness at a time when other countries (most recently New Zealand and Canada) are reviewing their offer to international students.

The relationship between education and immigration policy

  1. While senior ministers in the Department of Education consistently message that international students are welcome in the UK, there has been no immigration policy shift to maintain or increase the numbers of international students in the UK.
  2. Prospective students are aware of policy changes and uncertainty through extensive international media coverage and as a result may choose other study destinations, despite positive high-level messaging by the Secretary of State for Education.
  3. The International Education Strategy refresh has been delayed indefinitely, and the Immigration White Paper announces proposals without clear timelines, creating uncertainty for students and institutions. This lack of clarity is affecting student decision-making and could further reduce enrolments and international fee income.

Student perspectives

  1. A comprehensive student-led report from May 2025 representing the voices of almost 5,000 international students at Russell Group universities revealed the significant challenges facing international students as well as highlighting the positive contributions they make to campus life and the UK economy.
  2. The report found that international students face financial strain, impacting their overall experience. This includes finding accommodation expensive and difficult to obtain as well as additional cost of living challenges.
  3. Were the tuition fee to be increased to fund a levy, or to redress falling international student recruitment, this would place additional financial pressures on international students in the UK. Currently institutions can increase tuition fees during the life of a course for a multiyear programme, and the report’s recommendations suggested fixing fees at the point of entry for the duration of a course, to help with budgeting and financial planning.
  4. The report and its recommendations reiterate how costly it is to be an international student in the UK, and how challenging it is for students who have committed to a course of study here in the UK when these costs go up unexpectedly during their visa period.
  5. Given student views on the costs of studying in the UK, it is likely that any policy proposal that leads to increased fees will have a negative impact on students choosing the UK and further reduce institutions’ fee income.

Higher Education Insolvency Protections

  1. UKCISA has written formally to OfS and met with key colleagues, but we have not seen any specific measures in place to protect international students and staff in case of institutional insolvency.
  2. International students have specific vulnerabilities, in that their visa status is linked to the sponsoring institution. If that institution were to become insolvent, concessions would need to be implemented to protect the student visa while the individual is supported to find another institution.
  3. We are not aware of any protections or support in place for students who would not be able to leave an accommodation contract to move to another city or institution, or who would incur unexpected financial hardship because of the ramifications of their sponsor becoming insolvent.
  4. If a higher education provider becomes insolvent, it would have a huge impact on the reputation of the whole sector. If there were to be any instances of an international student suffering as a result of an insolvent institution, in overseas media or through word of mouth, then this would lead to students becoming reluctant to choose other UK institutions and potentially drive down fee income.
  5. The importance of comprehensive protections for international students should not be underestimated by government and related agencies, and they need to work openly with key stakeholders to ensure that the safeguards in place are adequate.

How will the interaction between international student enrolment and tuition fees shape the sector’s financial outlook?

  1. In summary, international students and their tuition fees already underpin the sector financially. This reliance is not limited to a small number of universities - most universities rely on international fee income to sustain their activity for the whole student population, particularly as domestic tuition fees remain relatively low.
  2. Concerns about the cost of living are already high among international students, and the government is committed to regular visa and immigration surcharge increases. If tuition fees are increased to fund a levy that is not invested into the international student experience, at the same time that the post-study work visa offer is restricted, then the risk is that the UK becomes too expensive and is no longer seen as a value for money option for a high-quality education.
  3. If international student numbers continue to fall, either because of restrictions placed on institutions’ recruitment, or because of the reputation of the UK due to an insolvent institution or the rising cost of a UK education, then UK institutions will become further vulnerable to cuts and closures. These will affect all students, not just international students, and all communities, as universities are major employers and drivers of local economies.
  4. Government must recognise the vital importance of international students to the financial sustainability of the whole UK higher education sector, and commit to a positive international student experience to support sustainable international recruitment strategies.
  5. Government should also commit to sharing accurate and timely data with sponsoring institutions, working to share information in a transparent and secure manner to enable institutions to remain compliant and continue to recruit internationally.

 

Reports cited in this submission

https://russellgroupstudentsunions.org/international-students-report

https://www.publicfirst.co.uk/global-talent-local-growth-the-export-and-jobs-benefit-of-international-students-in-the-uk.html

https://www.publicfirst.co.uk/calculating-the-positive-impact-of-international-students.html

https://www.hepi.ac.uk/2023/05/16/international-students-boost-uk-economy-by-41-9-billion/

https://www.officeforstudents.org.uk/publications/financial-sustainability-of-higher-education-providers-in-england-2025/

September 2025