UK universities face deficit from fewer international students

By Samantha Lo

UK universities face a serious threat of financial deficit as a sharp decline in international students’ applications is expected for both undergraduate and postgraduate programmes. This decline is attributed to the Conservative government’s recent tighter stance towards immigration, which is likely to deter the arrival of international students. 

Undergraduate tuition fees for home students have been capped at £9,250, a number that has eroded due to inflation. Universities UK (UUK) estimated that £9,250 will be worth £5,800 in real terms by the 2025/26 academic year. Universities have traditionally turned to hiking international student fees, which are not capped. In response to these financial challenges, University of York has lowered entry requirements for international students. 

The quality of higher education in Britain has consistently been globally competitive, especially with the ‘Oxbridge’ universities consistently securing top spots in world university rankings. Leaders of the sector have however expressed that they do not expect the government to provide support in times of serious financial trouble, including possible breaches of agreements with banks. One leader describes the government as “determined to drive us out of business”

Research from PwC has revealed that the falling number of international students is only one of many factors causing unstable financial circumstances in universities. Other major obstacles include rising expenditures on staff salaries and maintenance costs. 

For the 2022/23 academic year, LSE reported a total income of £466,051,000, ending the year with a total surplus of £58,136,000. This is an improvement from the 2021/22 academic year, which saw a deficit of £22,110,000. 

For undergraduate programmes, fees for international students at LSE increase annually

For postgraduate programmes, the UK government does not impose a cap on either home or overseas fees; LSE has also increased its postgraduate tuition fees each year, in varying percentages across programmes. The 2024/45 tuition fee policy also states that ‘[p]rogramme fee levels may be subject to change during the academic year for those Executive Master’s programmes that operate a number of start dates throughout an academic year’, meaning that students might have to face unexpected fee adjustments. 

Photograph from Pexels

Samantha reports on what the decline of international students could mean financially for the UK

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