Student visas down by a sixth will cause challenges for some universities

Comment

Share

Contents

Home Office statistics released today show there were 17.1% (25,200) fewer applications for visas to study in the UK in August than in the same month last year. This continues the trend seen over recent months, with 16.6% (55,500) fewer total applications in the year to date than at the same point in 2023. This follows a change which took effect in January 2024 that prevented most students from bringing dependents with them and may have made the UK a less attractive place to study for some.

Student visa applications typically peak between July and September, ahead of the start of the academic year. Assuming September's figures follow the pattern of recent months, we can expect to see fewer international students enrolling in UK universities in the academic year that is about to start. This will be important for universities' finances, which in recent years have become increasingly reliant on international student fee income to make up for falling funding for domestic undergraduate students. In 2022-23, a fifth (£10.9 billion) of all UK universities' income came from fees charged to international students from outside the EU, which are not subject to the same caps as fees charged to domestic undergraduates.

The sector as a whole appears to be in reasonable financial health. In a recent report, we estimated that while a fifth of English universities posted deficits in 2022-23 (after adjusting for one-off pension costs), these deficits remained relatively small compared to providers' net assets. However, recent UCAS data shows that less selective universities had received 19,200 (2.5%) fewer applications from domestic students by the June deadline for the coming academic year, whereas applications to more selective providers held up much better. If these universities also find their international recruitment is more impacted by the curbs on dependent visas, they would face a bigger financial hit.

Figure 1. Sponsored study visa applications by month and year (main applicants only)

_{Source: Monthly Entry Clearance Visa Applications up to August 2024, Home Office. https://www.gov.uk/government/statistics/monthly-entry-clearance-visa-applications. Main applicants only}

Kate Ogden, Senior Research Economist at the Institute for Fiscal Studies, said:

"The latest figures on student visa applications - down by one-sixth compared to last year - suggest that UK universities may no longer be able to rely on recruiting ever-increasing numbers of international students to make up for real-terms falls in the resources available for teaching domestic undergraduate students. Much of the sector is in reasonable financial health and should be able to adjust. But for some less-selective providers which rely heavily on international student fees and are facing greater competition for domestic students from more-selective competitors, the next academic year could be a difficult one."

More from IFS