University leaders warn that the international-student levy would undercut investment in students, research, and communities and threaten financial stability.

English universities face a sharp real-terms funding drop for undergraduates, with 2025-26 funding at about two-thirds of 2015-16 levels after inflation and cuts.

A proposed levy on international student fees would remove roughly £780 million in annual revenue, increasing financial pressure on universities.

The Department for Education says it has taken steps to stabilise the sector, including raising the tuition-fee cap and refocusing the Office for Students to support institutions facing future challenges.

Nottingham and Leicester are reportedly planning course closures, including modern foreign languages, while Bradford is ending programs in chemistry, biomedical sciences, and film/television; at least a third of universities anticipate deficits this academic year.

The government intends to raise domestic undergraduate tuition fees to £9,535 this academic year, with inflation-linked increases expected to reach around £9,900 by autumn 2026, potentially boosting annual funds by about £440 million.

Universities are becoming increasingly dependent on international student income as domestic fees lag behind cost pressures and inflation.

UUK data show the squeeze is spilling into course closures and department cuts, with 49% of member institutions closing courses, 18% closing entire departments, and 80% considering cuts to research spending.

Overall funding gaps total approximately £6.4 billion in real terms when comparing current students to those in 2015-16.