Westminster is about to put a £925 tax on every international student, and experts warn it will gut the talent pipeline
Key Points
- The Commons Education Committee has warned that the £925 international student levy due in August 2028 will hit a sector where 24 UK universities already face insolvency risk and 45% of English providers face deficits in 2025/26.
- The Campaign for Science and Engineering and the Royal Society of Chemistry have called the levy damaging, with the RSC warning that staff and course cuts at UK universities will become more pressing.
- UK universities took in £10.9 billion in international student fees in 2023/24, with much of it cross-subsidising research that government has failed to fund at the promised 80% of full economic cost.
- The flat £925 fee equates to roughly 4.9% of the average £19,000 international fee, with the first 220 international students per institution exempt, and is expected to raise £445 million in year one.
- Chemistry is flagged in the committee report as a "cold-spot" discipline at risk of disappearing regionally, undermining the same STEM talent pipeline the government has pledged £86 billion in R&D and £187 million in digital skills to build.
MPs on the Commons Education Committee have warned that the £925 international student levy, due in August 2028, will land on a UK university sector where 24 providers are already at risk of insolvency and the science lobby is openly calling the policy damaging.
The committee’s new 142-page report on higher education funding, published on Tuesday (12 May), treats the levy as a slow-motion problem the Treasury has decided to brand as a maintenance grant scheme. The framing is generous.
The actual mechanic is that English universities will pay a flat £925 per international student per year of study from the 2028/29 academic year, after an exemption on the first 220 students per institution.
A mid-sized provider with 700 international students faces an annual bill of around £444,000. The biggest research universities are looking at millions.
The number the Treasury hopes you don’t focus on
Originally pitched as a 6% percentage levy in the May 2025 Immigration White Paper, the charge was downgraded to a flat £925 at the Autumn Budget 2025, equivalent to about 4.9% of the average £19,000 international fee.
Government modelling expects it to raise £445 million in year one, all of it ring-fenced to fund maintenance grants for disadvantaged UK students on industrial-strategy courses, which the government has indicated will include STEM. Nobody serious is against maintenance grants. The problem is the route to funding them.
The Campaign for Science and Engineering, the UK’s cross-sector voice for the research base, has been blunt. Its executive director Alicia Greated told Chemistry World the levy’s impacts could be “damaging” and that the policy is hard to square with ministers’ rhetoric about UK research.
The Royal Society of Chemistry warned that the financial pressures already triggering staff and course cuts will become more pressing because of the levy.
The Russell Group’s Tim Bradshaw warned that the levy will have a significant impact on universities’ ability to invest in teaching and research.
Universities UK president Malcolm Press, who runs Manchester Metropolitan, framed the choice for vice-chancellors more starkly: cut the cross-subsidies that fund research, or jack up international fees and watch the numbers fall.
24 universities walking the plank changes the maths
The Education Committee’s report stitches the levy into the wider crisis. The Office for Students fears 24 providers, seven of them with over 3,000 students, are at risk of insolvency in the next 12 months.
45% of English universities are on course to run a deficit in 2025/26 without action. Universities are already closing courses, mothballing campuses and making staff redundant.
Stack the levy on top of that and the maths gets ugly. UK universities took in £10.9 billion from international student tuition in 2023/24, only narrowly behind the £13 billion paid by domestic students.
A chunk of that cash quietly cross-subsidises research the government has consistently failed to fund at the promised 80% of full economic cost. Strip the international students, or price them out, and the research budget shrinks again.
What this means for British tech and biotech
This is the bit that should worry every UK founder.
International postgraduates are heavily concentrated in STEM, and the universities that train them are the same ones running spin-out programmes, hosting the labs that landed the Covid vaccines, and feeding the engineering and AI talent pipeline that British tech firms are already scrambling to hire from.
Chemistry is flagged in the report as a discipline at risk of becoming a regional “cold-spot”, a polite way of saying it stops being offered outside the elite cluster.
The government has committed £86 billion to public R&D in the June 2025 spending review, plus £182 million for a defence industry talent pipeline and £187 million for the Techfirst digital skills package.
None of that money rebuilds a chemistry department that has closed because the universities funding its overheads cannot afford the international student churn the levy will trigger.
