Starmer's Migration Crackdown: Universities Face Foreign Student Tax

Sir Keir Starmer's government is proposing a new 6% levy on the £12 billion annual fee income that UK universities earn from foreign students as part of efforts to reduce net migration. The funds raised would be reinvested in domestic education and training to lessen dependence on foreign workers.

The government’s white paper also reduces the post-study work period for foreign graduates from two years to 18 months. Graduates must secure a graduate-level job to remain in the UK beyond that timeframe.

Additionally, universities will face stricter recruitment rules for foreign students, with penalties for high dropout rates and no-shows. Those failing to meet tougher targets could face restrictions or be barred from sponsoring overseas students.

The proposal has sparked backlash from university leaders, who warn it could financially destabilize institutions already struggling with funding cuts and declining international applications.

Vivienne Stern, chief executive of Universities UK, expressed concern over the impact on the UK's appeal as a study destination, while Jo Grady of the University and College Union labeled the white paper as “anti-growth” and warned it could drive universities to bankruptcy.

Nick Hillman of the Higher Education Policy Institute criticized the levy as a “tax on a very successful UK export sector” and cautioned that the Treasury might divert the funds as it has with the apprenticeship levy.

The white paper also highlighted concerns over abuse of the student visa system, citing a significant increase in asylum claims and a rise in visa applications from lower-ranked universities.

To address this, universities will be required to ensure that at least 90% of foreign students complete their courses and 95% attend classes, with a new warning system rating their compliance. Institutions at risk of failing these targets must submit action plans and may face recruitment limits.