The £925 International Student Levy Confirmed in UK Budget 2026

Key Highlights

• An international student levy of £925 per student per year of study was confirmed in the UK's Autumn Budget on 28th October 2026.
• English higher education providers will receive an allowance covering their first 220 international students each year, and the levy will apply from 1st August 2028.
• The Department for Education (DfE) now expects the levy to raise £1.34 billion in the first three years, lower than the initial forecast.
• Currently, universities are responsible for the levy, but its financial impact could extend to international students through potential fee increases.

The UK government has moved ahead with its proposed £925 annual international student levy on English higher education providers. On 28th October 2026, the DfE published an updated impact assessment for the levy alongside the Autumn Budget delivered by Chancellor John Healey. The legislation is due in the autumn Finance Bill, and the levy will be enforced from 1st August 2028.

Announced initially in the Budget 2025, the UK international student levy will require higher education providers to pay £925 (about US$1,232 according to exchange rate on publishing date) for students registered on or after 1st August 2028. This finalised flat fee is broadly equivalent to a 4.5% charge, lower than the initial proposal. Providers will be exempt from the charge for their first 220 international students annually, a provision intended to cushion smaller providers. It exempts a provider from up to £203,500 a year and will be set in secondary legislation. The government has said that the revenue will be fully reinvested in higher education and skills, including the return of targeted maintenance grants for disadvantaged students. 

Flat Levy Weighs Most on Lower-Fee Universities

The levy is a flat annual charge imposed on providers, not a visa fee or a direct charge on the students. It covers every international student registered on a higher education course at level 4 or above at an English provider registered with the Office for Students (OfS). This includes students who began their courses before August 2028 and will be the same for full-time as well as part-time students. 

Since the charge is flat, this makes it particularly significant for universities with large international student cohorts and falls hardest on providers with lower fees. For instance, a university with 1,000 international students would pay for 780 students after the 220-student allowance, creating an annual bill of £721,500. 

The Institute for Fiscal Studies (IFS) calculated that £925 equals 4.9% of the average international fee of about £19,000. This rises to 9.3% of a £10,000 fee and falls to 3.1% of a £30,000 fee. The government has said the rate will be reviewed over time and can be raised in line with inflation through regulations; the OfS will use existing enrolment data to support delivery.

Levy Likely to Raise International Student Fees

Although students will not pay the levy directly, universities are likely to consider raising international tuition fees to recover the additional cost. DfE’s 2025 impact analysis estimated that the levy would raise £445 million in AY 2028-29 while costing the sector £270 million. This implies that more than half the cost would be recovered through higher fees.

The levy has arrived at a time when international recruitment at UK universities is seeing volatility under tighter immigration settings and domestic funding pressures. Some universities including Birmingham City University have already increased fees for continuing international students by 2% in 2026-27, with a further 3.5% increase planned for 2027-28. The University of Bath has also advised continuing international students to budget for annual increases of up to 8%.

Currently, the broader risk is that the levy could compound existing cost pressures. The charge applies to every international student, regardless of nationality. Although universities will pay the levy, students from key source markets like India, China and Nigeria may ultimately bear it through higher fees.

OfS Levy Trials Ahead of August 2028 Start

The levy is officially scheduled to start on 1st August 2028, subject to parliamentary approval of the Finance Bill. Prior to implementation, the OfS will run two trial delivery calculations using student data from AY 2026-27 and AY 2027-28. These trials are intended to help universities plan financially and allow the regulator to test its processes and draft guidance.

The period leading up to August 2028 will be crucial for universities as they assess the levy’s financial implications and reconsider their international recruitment strategies. Their response will reveal whether the government can secure additional funding for domestic students while preserving the UK’s ability to attract global talent.

The DfE now anticipates the levy to raise £1.34 billion over its first three years. This is below its earlier forecasts of £445 million in AY 2028-29, rising to £480 million in AY 2030-31. It attributed the shortfall mainly to lower international recruitment forecasts and the inclusion of the student allowance.

For prospective international students, the implications could emerge well before the levy comes into force. Universities may reconsider their international tuition fees ahead of AY 2028-29 and will be closely monitored for any such announcements as the implementation date approaches.

(Writing by Kritika Bhatia, Editing by Shivani Singh)

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