Starmer’s Immigration Policies – The Crumbling State of English Universities and the Growing Need for Reassessment

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Starmer’s Immigration Policies – The Crumbling State of English Universities and the Growing Need for Reassessment

By Freya Cushman

Across England, universities are facing the same perfect storm: financial pressures, cuts to staff and courses, and now looming changes to immigration policy. A recent Office for Students report found that 4 out of 10 universities are headed for a deficit. Can Starmer’s Labour deliver a viable future for English universities amid economic strain and immigration reform?

It was Monday, the 5th of May, when I was sitting in the former JCR of Somerville College discussing the recent report on university deficits with my tutor from last term and fellow coursemates. ‘Oxford and Cambridge will be the last bastions standing,’ my former tutor claimed. The prestige of the Oxford and Cambridge names will, it seems, undoubtedly continue to gather international interest and preserve  the status of these great institutions for many years to come. However, the outlook may not be as optimistic for universities outside of the hallowed Russell Group.

English universities face an uncertain future. Of the 270 institutions registered with the Office for Students, 117 were expected to be in deficit by the end of this summer.[1] The average Surplus/Deficit interim return stands at £351 million, up from £309 million in 2022-23. The increase in deficits across all providers makes for bleak reading.[2]

 

Immigration – Can We Afford to Lose International Students?

Whilst immigration is clearly a factor that may impact future deficits, the current situation has led to drastic cuts across the sector. This will have a long-term impact on how universities will be able to operate. Keele, Plymouth, Derby, Nottingham, Bournemouth, Bradford, Bedfordshire, Sheffield, Durham and Newcastle universities have announced cuts of 2,023 jobs between them.[3] This is clearly an unsustainable model for universities to continue with. Staff being cut reduces courses, limiting the choice of potential students, who could be put off from applying to some universities. If, for example, you achieved BBB at A Level (the average grades achieved by most students), you may face a future in which your desired course is no longer offered.[4] I have already discussed the issues surrounding History as an academic field, but if we continue merging schools and departments across the country, students may find their courses cut.[5] Such a scenario could see English universities understaffed, course-less, and unable to attract potential students. It could be a fiscal nightmare for them to continue down this road of chopping and merging courses.

There is a clear trajectory for increased losses across the sector, with blame being attributed to inflation, a lack of increase in tuition fees for home students, and now immigration. Following the Labour government’s new policies from the UK immigration White Paper (12 May 2025), universities face the same issue of deficits growing at the prospect of reducing student numbers from overseas. 426,710 overseas students from India, China, Nigeria, Pakistan, the United States, Hong Kong, Nepal, Malaysia, Bangladesh and Saudi Arabia are currently studying in England.[6] This is down 1.05% from 431,260 in 2022-2023. This is a small but substantial figure that indicates a likely decrease in overseas fee-paying students' revenues from English universities. Universities may be worse off by reducing the appeal to overseas students, who typically pay more per place than English students.

New immigration policies are likely to accelerate the existing decline of international student enrolment. As part of these changes, the government may further risk universities being in deficit due to the perceived difficulties of applying for a visa. The number of people receiving student visas increased from 269,000 in 2019 to 498,000 in 2023 – contributing to the overall increase in net migration.[7]

With votes shifting to parties on the Right at the local elections on the 1st of May 2025, one could argue there is a public desire for changing attitudes to immigration. This helped the Reform UK win a staggering 677 seats, putting pressure on the Labour government to deliver results quicker.[8] Due to pressure from some of the public, the government have seemingly delivered a short-term fix that they hope will win over some voters. However, institutions like the Russell Group have criticised the move to limit student visa permissions. In a response to the Education Secretary claiming some abused the system for their visas, the Russell Group’s CEO, Dr Tim Bradshaw, cited they wished “to work with the government to make a system that is fair” and claimed that actions such as the reduction in length that graduates can stay in the UK from 24 months to 18 months, will make us “less competitive” internationally.[9] The government faces a dilemma: cater to a small portion of voters, or prioritise investment into the struggling system. In this context, immigration plays a vital role in supporting universities, as international students contribute significantly in their funding.

 

Is There Any Lifeline Yet?

Home tuition fees are set to see their first rise in over eight years this Autumn. The annual tuition fee in England will increase from £9,250 to £9,535.[10] This modest £285 increase is unlikely to offset the financial gap left by declining international enrolment. As we have seen, the appeal of English universities to international students has declined. This is problematic for many universities in funding their operations. For example, the OfS highlighted that larger research-intensive universities rely on a forecasted range of £2,100 million compared to £ 400 million from UK students.[11] At larger universities, the appeal of research institutions enables them to attract ambitious international students. This, in turn, helps them to fund their other programmes and support home-student fees. However, with the government's announcements regarding immigration policy, these students may be less inclined to study in the UK. This would leave a gap in the funding of research universities, where most of their projected financing must come from international students. Securing future students, and most importantly their funding is mission critical for our universities.

However, funding issues are not just confined to England. Cardiff University – in Wales - has become an infamous institution associated with the chaos of the higher education sector, with many stories citing its deficit over the last few months alone. The university’s leadership took drastic action, announcing course merges, cuts, and staff reductions to try to reduce its deficit. This isn’t just a problem in England—or even just about small universities mismanaging funds. It reflects a deeper, institutional failure: education has long been underfunded, neglected, and only now attracting serious attention.

Are rising costs internally and reducing immigration the answer? In a conversation at Oxford with Institute for Government senior fellow Sam Freedman, he suggested that the actions of the Labour government with the recent immigration white paper and plans to cap immigration could have some impact on higher education. Whilst we may see some institutions struggle, and maybe even close, Freedman proposed that the government would take action to ensure that a total collapse will not occur. However, one is left wondering just how they will be able to do this. There is a race against time to source new revenue streams, given the new possibility of reduced international student enrolment. Education may, it seems, become a game of wait and see.

The Takeaway

With rising costs, inflation, stagnant fees (soon to be rectified), and now tougher barriers to immigration, can we truly say that this Labour government's policies will save higher education? Under growing pressure from academics and institutions, the government’s ability to balance fiscal responsibilities will be tested like never before. Only time will tell if students’ and academics’ futures can be salvaged. Sam Freedman might be right – perhaps the government will step in before a total collapse. But how far will they let things fall before acting?

Students, academics, and those who care about the future of education must start the conversation. Talk to your tutors, your peers, your friends. Only by speaking up can there be a hope for the sector to be heard. Maybe then, just maybe, the government will listen.  


[1] B. Jeffreys and H. Shearing, ‘Four in 10 universities face financial challenges,´BBC (8 May 2025), accessed via: https://www.bbc.co.uk/news/articles/c8dgdlrdnrgo,

[2] OfS, Financial sustainability of higher education providers in England (8 May 2025), p.10 accessed via: https://www.officeforstudents.org.uk/media/upycgog5/financial-sustainability-of-higher-education-providers-in-england-2025.pdf

[3] UK Universities redundancies: latest updates (April 4 2025) https://www.timeshighereducation.com/news/uk-university-redundancies-latest-updates

[5] Helen Packer, Times Higher Education, Student choice at risk as almost half of universities cut courses, (May 6 2025) available at: https://www.timeshighereducation.com/news/student-choice-risk-almost-half-universities-cut-courses

[6] OfS, Financial sustainability of higher education providers in England (8 May 2025), p. accessed via: https://www.officeforstudents.org.uk/media/upycgog5/financial-sustainability-of-higher-education-providers-in-england-2025.pdf  p.34

[7] UK immigration White Paper: Key changes affecting universities (May 12, 2025) available at: https://www.timeshighereducation.com/news/uk-immigration-white-paper-key-changes-affecting-universities

[9] Russell Group ‘Response to the government’s white paper’ (12 May 2025) available at: https://www.russellgroup.ac.uk/news/response-governments-immigration-white-paper

[11] fS, Financial sustainability of higher education providers in England (8 May 2025), p. accessed via: https://www.officeforstudents.org.uk/media/upycgog5/financial-sustainability-of-higher-education-providers-in-england-2025.pdf  p.28



Comments

  1. William Gough28 May 2025 at 11:07

    A very interesting read. From a political strategic point of view it seems strange to me that Labour is trying so hard to clamp down on international students, as they are surely one of the most "profitable" forms of migration. It feels like the kind of policy that will do little to win over Reform voters (who are more passionate about the illegal 'small boats') and just annoy the base, turning them to the Greens or Lib Dems.

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  2. Anonymous28 May 2025 at 15:16

    Dependence on international students to balance a university's finances is a good sign that its funding model is severely defective. There is, of course, an artificial limit on how much a university can charge Home students, which is falling every year in real terms due to inflation. This would not be a problem if the government were expected to fund all, or most, of a university's expenses. However, in the Anglosphere since the end of the last century, universities have been expected to operate like for-profit businesses, which should not be the operating model of an institution supposedly dedicated to advanced research and learning; the inevitable result is that universities take on unsustainable ways of procuring funding to prevent financial collapse. Since universities do not have a maximum limit they can charge international students, they can use international students to effectively subsidise the artificially low tuition fees of Home students in a situation where the government is not willing to subsidise most of it. The point of enrolling international students should be to attract talented scholars from around the world, not to prop up a university's failing finances.

    I wonder whether potential international students are making a properly informed choice when they decide whether to invest an exorbitant sum of money to study in a university that is comparable in quality to universities in their home countries. In some cases they are deceived by an idealised vision of the university and British life and encouraged to enrol, since they are seen by university administration as a large source of revenue. But I agree that the mostly ill-informed and sometimes bizarre immigration white paper released by the current Labour government, which seems to have been conjured up in a desperate but counterproductive attempt to weaken the appeal of Reform UK, is not making studying in the UK any more attractive. Its greatest impact upon potential international students is perhaps that it gives the impression that the UK is hostile to immigration and immigrants.

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