Declining international student enrolment sparks financial woes for UK universities

By Rhiannon Jenkins, News Co-Deputy Editor

The UK's higher education sector may face significant financial blows as the number of international students enrolling in British universities continues to decline.

Recent government data has revealed a concerning trend for the UK's higher education sector, with a sharp drop in applications for study, skilled worker, and health and care visas from workers and their family members. Data shows such applications fell by more than a third in July 2024 compared to the same period last year.

This decline appears to be exacerbated by government policies that have restricted international students and health and care visa holders from bringing family members. The previous Conservative government introduced these restrictive policies, and the current Labour government has not yet indicated any plans to make any changes to them.

The Home Office's initial figures reveal that sponsored student visa applications dropped by around 15% from July 2023 to July 2024. This comes in contrast to the record-high levels of international student enrolment universities experienced in 2022, of which are likely to ensure international student enrolment continues to remain above pre-pandemic levels.

The financial implications of this decline are significant. Since 2016, the £9,250 annual tuition charged to UK home students has seen its real-term value decline to the equivalent of approximately £6,000 due to recent surges in inflation. This has made universities increasingly reliant on tuition fees paid by overseas students, rendering them vulnerable to fluctuations in their international student populations.

The University of Oxford's Migration Observatory has cautioned that the drop in international student enrolment could force universities to make difficult "trade-offs" as they grapple with dwindling revenues.

This concern is echoed by reports indicating that at least 67 educational institutions are already undertaking redundancy and restructuring initiatives, which pose the threat of heightening risks of increased labour disputes.

According to recent analyses by PwC and the OfS, the higher education regulator in England, as many as 40% of the country's universities are expected to operate at a deficit in the coming year. This is a worrying prospect, particularly as the impact of recent nationwide anti-immigration riots on international student enrolment remains to be seen.

What is clear, is that this impending financial crisis poses a significant risk to the quality of education and the overall well-being of the UK's higher education system.