Student bodies warn Labour of losing Indian talent if levy imposed on foreign students

LONDON: Bodies representing Indian students, UK academics and UK universities have slammed plans by Labour to impose a levy on international students to pay for maintenance grants for domestic students from low-income families at university or college, saying it will put off international students and hit university finances.

UK education secretary Bridget Phillipson pledged to introduce the new means-tested maintenance grants by the end of this parliament in her speech at the Labour Party conference on Monday.

The grants will be fully funded by a new international student levy, the Labour Party confirmed, saying this would “ensure revenue from international students is used to benefit working-class domestic students”. The immigration white paper had proposed a 6% levy on international student fees.

INSA UK president Amit Tiwari said a 6% levy risked pricing Indian students out of higher education market.

In the year ending June 2025 Indian students were the second-largest cohort, after Chinese students, to study in the UK, with 98,014 study visas granted. “Indian students alone contributed over £4 billion to the UK economy last year,” Tiwari said. “Adding a new charge will push them towards Canada, Australia and the US.”

Policy consultancy Public First predicts a 6% levy will lead to a loss of 16,100 international students in the first year, leading to a £240 million loss of fee income to the sector, and a loss of 77,000 international students in the first five years, leading to a loss of £2.2 billion.

Jonathan Simons, partner at Public First, said: “Around 40% of our universities are currently in deficit; a levy will lead to a further loss of jobs and places for UK students. There is a danger that the very students govt wishes to help won’t be able to access a course because the international students won’t be there to subsidise them.”