The Treasury has quietly inserted an International Student Levy into the draft 2026 Finance Bill, published on 13 July. From the 2028/29 academic year, every higher-education provider in England will pay £925 to the Exchequer for each non-UK student enrolled on degree-level programmes. The charge will be uprated by inflation and collected by the Office for Students, with penalties for late payment. Ministers argue the levy will partially offset public-service costs generated by growth in overseas enrolments, which have risen 30 % since 2021 despite wider net migration curbs. Universities—not students—will pay the fee, but most institutions admit they will pass on some or all of the cost through higher tuition or accommodation charges. The Russell Group estimates the measure could add £165 million a year to its members’ expenditure and warns it risks pushing price-sensitive applicants towards Canada or Australia. For employers relying on the Graduate or Skilled Worker routes, the biggest risk is that universities may shrink STEM intakes to protect margins, reducing the pool of work-ready talent. Some institutions are already modelling discounts for partner companies that guarantee internships or sponsorship, effectively sharing the levy burden. Multinationals running in-house degree apprenticeships will be exempt. The bill includes an allowance—initially set at 150 students—before the levy bites, cushioning smaller providers. Consultation on secondary regulations closes on 12 September. Sector bodies are lobbying for revenue recycling into faster visa processing or post-study work scheme improvements, but the Treasury has so far earmarked proceeds for general spending.
