Maintenance grants for students are under threat because of a visa crackdown on overseas applicants, the university sector has warned.
The Government has said the grants will return for tens of thousands of students from lower-income households from 2028, paid for by a tax on international student fees.
But the levy will bring in less money than expected because of a plunge in overseas student numbers, according to universities and student bodies.
This means the “funding plans for new maintenance grants could fail to provide a stable and reliable source of vital support for students”, the National Union of Students (NUS) and the Russell Group of leading universities warned in a statement shared with The i Paper.
Which students qualify for the grants?
An annual fee of £925 would be charged for every international student under the new tax. It is expected to be introduced in legislation accompanying the Budget and take effect in August 2028.
The maintenance grants will give eligible students up to £1,000 in each of their first two years and up to £750 in each of the remaining years of their undergraduate degrees.
Students with household incomes up to £30,000 will be able to get support in subjects in line with the Government’s industrial strategy, which are expected to include engineering and health.
In an impact assessment published last November, the Government estimated the levy would bring in £445m in 2028/29, £465m in 2029/30, and £480m in 2030/31.
However, student visa applications have slumped 22 per cent in the past year, and more than 30 per cent compared with three years ago, according to Home Office data.
‘Concerning’ drop in international recruits
The Department for Education’s modelling only assumed a 3.5 per cent drop in international students in 2025/26, before stabilising between a 1 per cent drop and 6 per cent rise depending on the type of course.
In addition to this, it forecasts that the policy would cut international student numbers by 14,000 in its first year – which is only around a 3 per cent decline on the most recent figures.
Libby Hackett, chief executive of the Russell Group, said the latest data “shows a concerning fall in study visa applications”.
She added: “It’s a trend that underlines why the proposed tax on international students is not the right way to deliver much-needed financial support for UK students”.
Growing visa refusals
Vivienne Stern, chief executive of Universities UK, which represents 142 institutions, added: “It is a daft policy, and that is evident from the way that international recruitment trends have been unfolding this autumn.
“The Government’s projections about the income it will raise are already unrealistic.”
The Home Office has been refusing a growing proportion of student visas, using increasingly arbitrary and unpredictable criteria, Stern said.
The number of sponsored student visas rejected nearly doubled in the first half of this year compared with the same period last year, from about 5,300 to 8,400, according to Home Office data analysed by The i Paper.
The visa crackdown changes
Visas were banned in March for students from Afghanistan, Cameroon, Myanmar and Sudan because these nationalities were deemed most likely to claim asylum after entering the UK.
The Home Office also tightened rules for universities sponsoring international students for visas.
After being accepted onto a course, overseas applicants get a document from the institution which they use to apply for a visa.
But a university can lose its ability to recruit international applicants if too many of its prospective students are turned down.
The Government lowered this visa refusal threshold from 10 to five per cent in June last year.
As a result, Stern said some universities are withdrawing offers from students if they are getting close to that 5 per cent threshold and are concerned about how the Home Office may assess them.
Further restrictions were imposed in January 2024 barring international students from bringing partners or children – another factor believed to be driving down applications.
‘Anti-growth tax on one of UK’s biggest exports’
Favour Samuel, president of the National Union of Students in England, said maintenance grants are needed to support “starving” students racking up “mortgage-sized” student loan debts.
But “it is wrong for this to be funded by a tax on international students”, who are themselves “increasingly reliant” on food banks at student campuses, she said.
“The levy will be one more deterrent for international students, and the UK cannot afford that,” she added.
Hackett called for a rethink on how maintenance grants are funded, saying the proposed levy “would [also] represent an anti-growth tax on one of the UK’s biggest exports” and put thousands of jobs at risk.
A Government spokesperson said funding raised through the international student levy will be “fully reinvested in England’s higher education and skills system, including to fully deliver our commitment to maintenance grants for disadvantaged students”.
They added: “We strongly value the contribution of international students and recognise their importance to our world-leading universities, but we will always ensure our visa system is robust, and crack down on any student visa abuse.”
Do you have information about this story? We’d love to hear from you – email alexa.phillips@theipaper.com