The Department for Education (DfE) opened a consultation in November 2025 to seek views from higher education providers on the technical detail of the International Student Levy.
The consultation explored the proposed design and delivery of the levy. The levy will take effect from 1 August 2028. Draft legislation in respect of the levy will be published during 2026.
The consultation ran from 26 November 2025 to 18 February 2026. The results of the consultation DfE's response will be published in summer 2026.
Our response
IHE welcomes the opportunity to respond to the consultation, and we recognise the government’s intention to ensure that the economic benefits of international education are shared across the system. However, we have significant concerns about the design, scope and potential consequences of the levy as proposed. In our response, we highlight several areas within the consultation that are inconsistent with the stated policy intent.
A central theme in our response is the lack of clarity around which providers and students fall within scope. The proposals risk capturing those who fall outside of the stated definition of international students, creating unintended financial and operational consequences for providers. The consultation relies heavily on 'non‑home fee status' as a proxy for international student status, despite this being an unreliable indicator of immigration status or international mobility. As a result, students who are not sponsored under the Student route - including UK nationals who do not meet residency requirements, online learners based overseas, and short‑course or exchange students who do not 'come to the UK to study' - may be incorrectly included.
We also highlights concern about the proposed headcount‑based calculation method, which may lead to double counting and distortions for providers with non‑standard academic years or rolling enrolment models. The threshold of 220 students is similarly unlikely to protect small specialist providers whose international recruitment is essential to their sustainability.
IHE submits that the design of the levy, as currently proposed, risks weakening one of the UK’s strongest global sectors, creating behavioural distortions within provision, and placing indirect pressure on the affordability of domestic provision. Reconsideration of scope, methodology and threshold design is therefore essential. Without these adjustments, the levy risks generating unintended consequences for students, providers, and the wider higher education ecosystem. This also represents a significant threat to the UK’s competitiveness as framing the levy as a charge on international students risks undermining the country’s reputation as an open and welcoming study destination.
We urge the government to consider:
- whether the projected revenue gain outweighs potential reductions in recruitment and associated export earnings
- whether the levy aligns with the International Education Strategy’s growth ambitions
- whether alternative mechanisms (for example, a proportionate percentage-based model or time-limited measure) would better balance fiscal objectives with sector sustainability
Read our full response using the download link below.