UK Plans 6% International Student Levy to Boost Public Confidence, Says Minister

London, UK: The UK government is moving forward with a controversial levy on universities’ income from international student fees, a measure officials say is designed to boost public confidence in higher education funding.

Speaking at the 20th BUILA conference on July 10, 2025, UK Skills Minister Jacqui Smith emphasized that the proposal is not a tax on students, but rather a charge on universities. The revenue, she said, would be reinvested into education and skills development.

Read More: London Loses Top Student City Title to Seoul in QS 2026 Rankings

“This levy will make the contribution of international students to our communities transparent and accountable,” Smith noted, stressing that the policy aims to maintain public trust amid concerns over university funding models.

The Proposal in Numbers

The levy is expected to be set at 6% of international fee income, which totaled £12 billion for UK universities in 2023/24. Based on current figures, this would generate approximately £620 million annually in England, with Russell Group universities shouldering £367 million of the burden.

International students currently inject about £58 million per parliamentary constituency, equivalent to £560 per person, according to recent data cited by Smith.

Read Also: UK Home Office Explores Digital English Language Testing for Global Applicants

Sector Concerns

University leaders warn the levy could have serious financial consequences, including:

Cost-cutting measures such as job reductions and service cuts

Fee increases for future international students

A projected loss of 7,000 students annually due to price sensitivity, compounded by recent visa restrictions that could drive losses up to 40,000 students per year

Critics are also skeptical about whether the funds will truly be ring-fenced for education, citing the precedent of the apprenticeship levy, where much of the revenue ended up in the Treasury.

Next Steps

The final structure of the levy will be announced in the Autumn Budget, following ongoing consultations. Scottish universities have raised concerns over an estimated £85 million annual impact, fueling calls for devolved decision-making on higher education policy.

The government frames the levy as a transparency measure to demonstrate international students’ economic value, while universities fear the policy could undermine competitiveness, reduce diversity, and strain finances. The Autumn Budget will determine whether this plan moves forward and in what form.