Stakeholders have hit out at the plans, which are making their way through the legislative process largely unchanged from their original iteration – despite significan concerns identified by respondents to a government consultation on the levy.

While the government response to the consultation published today acknowledged operational concerns and pledged to firm up parts of the guidance for greater clarity, it made very few substantive changes to the policy. It stressed that the levy is needed to help fund the higher education system and rejected the majority of calls to widen the scope of exemptions.

Respondents sought clarity on how the levy will work in practice amid concerns about how it will exacerbate existing financial pressures on England’s higher education providers, even as international student numbers continue to decline after a post-pandemic peak. Modelling from experts suggest that the policy could slash international enrolments by as much as 77,000 within five years of its implementation, according to the think tank Public First.

Higher education stakeholders also raised concerns on the additional administrative burden the levy would create, but the government said existing data collections – such as the Jisc Student Record – would be used. And it added that the levy would be brought in in phases, with shadow runs before it officially takes effect on August 1, 2028.

Meanwhile, students on a TNE program outside of the UK will largely be exempt from an institution’s international student headcount – although English providers delivering progams in Scotland, Wales or Northern Irelans will still have to pay the levy.

With a new incoming team at the top of government, it is time to hit reset on policies like this which work against priorities to bolster local prosperity and growth
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The government will provide further detail on TNE students in due course, but said that this was an “important area for collaboration” that it was committed to supporting. It follows the UK’s revamped international education strategy, which made TNE a key area for growing the sector.

And it clarified that for embedded colleges, franchise arrangements, cross-border provision and joint ventures, the liability generally rests with the institution registered with the Office for Students (OfS) – which is responsible for collecting the money raised by the levy – responsible for the international student.

A key sticking point from stakeholders responding to the consultation was that there should be more categories of students exempt from the levy, such as short-term students. However, the government rejected these pleas on the basis that they undermined the levy’s objectives.

Concerns were also raised about the financial impact of the policy, which could hit some institutions by millions of pounds. However, the government pointed out that the £925-per-international-student levy is waived for the first 220 international students as a way to protect smaller or specialist providers.

And it said that some of the levy’s cost burden will be offset by raising fee caps in line with inflation between 2026/27 and 2030/31 will generate around £6 billion in revenue for higher education institutions.

Neverthless, Universities UK chief executive Vivienne Stern blasted what she called “effectively a tax on a major UK export”.

“With a new incoming team at the top of government, it is time to hit reset on policies like this which work against priorities to bolster local prosperity and growth,” she added.

Vanessa Wilson, CEO of University Alliance, warned that the levy “risks undermining the UK’s attractiveness at a time of intense global competition”.

“It remains deeply counterintuitive to tax institutions that are already delivering opportunity, skills and social mobility at scale, only to recycle that funding elsewhere in the system,” she said.

“We continue to believe international students are being undervalued in policymaking, and we urge the government to use the implementation period to reconsider the levy’s impact on institutional sustainability and the UK’s long-term international competitiveness.”