Universities in England face £1 billion of lost international tuition-fee income over three years under the government's planned international student levy, according to a revised Department for Education impact analysis published alongside the Budget on 28 October 2026. This is general information, not personal immigration advice.

What the levy is

The levy will take the form of a £925 annual fee per international student, payable by higher education providers and rising with inflation. Each provider gets an allowance for its first 220 international students. The levy applies to the higher education sector in England only, with fee pass-through assumed from the 2028–29 academic year.

A worse picture than first estimated

The revised estimate is £100 million worse than the original: income losses rise from £900 million over three years to £1 billion, reflecting updated data. The analysis also projects 11,500 students who would otherwise have come to the UK will not do so by 2033–34. The government assumes providers will pass on the cost in higher tuition fees, though pass-through will vary.

Lower-ranked universities hit hardest

Highly ranked institutions, with the document naming Imperial College London and the University of Cambridge, will likely be able to pass on a higher proportion of the costs without a significant impact on recruitment. Universities lower down the league tables are expected to face a sharper downturn: if tuition fees rose by 10%, some institutions would see an 11.2% drop in interest from candidates abroad. The Russell Group's director of strategic policy, Hollie Chandler, said the levy "will reduce vital funds available for teaching and research", and called for a rethink. The Department for Education warns that a fall in international student income is likely to reduce the cross-subsidy available for research.

Sources: Times Higher Education, Wonkhe, Department for Education impact analysis (GOV.UK).