How International Students Ended Up Footing the UK’s Fiscal Deficit

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After winning the general election, the new UK Education Secretary clearly stated that the Graduate Visa will be retained and encouraged international students to study in the UK with "peace of mind and confidence." This policy stands in stark contrast to the previous Conservative government's restrictive measures, such as barring dependents and reviewing student visas, meaning that undergraduate and master’s graduates can still benefit from the convenience of staying in the UK for two years after graduation without a job offer. For families concerned about post-study work opportunities, this is not only a policy advantage but also significantly increases the likelihood of international students transitioning to a work visa and achieving long-term settlement in the UK. However, behind this friendly attitude lies the UK’s severe fiscal deficit pressure, with international students being seen as a vital source of funds to alleviate economic difficulties. The article points out that the UK government acknowledges a huge fiscal gap, thus heavily relying on the economic contributions and soft power impact brought by international students. CheersYou(清柚教育) reminds international students and their parents to rationally consider the economic motivations behind the UK’s welcoming stance while benefiting from the policy, and to carefully assess the long-term value and potential risks of studying in the UK based on personal career plans and family financial circumstances.

With the University of Leeds emblazoning "Made in Leeds" on its website in a high-profile manner and sending congratulatory emails to every student, the UK general election has finally been settled!

 

Image source: University of Leeds

 

Labour leader Keir Starmer has won the election and become the UK's 6th Prime Minister. The 62-year-old leader ended the Conservative Party's 14-year rule.

 

Many international students are watching to see what attitude the new UK government will take towards them, and what impact new policies will have.

 

 

After all, under previous prime ministers, many restrictive policies targeting international students were introduced.

 

Last year, to reduce net migration and prevent abuse of the student visa system, the UK implemented a ban on master's degree students bringing dependents, causing study visa applications to drop to a historic low.

 

Moreover, the government's review of the graduate route and negative messaging around immigration and international students have also weakened the UK's appeal, leading many to fear the new government would continue such policies.

 

 

Come to the UK with "peace of mind and confidence"

 

In response to these concerns, the UK government quickly responded.

 

The new Education Secretary, Bridget Phillipson, stated that the new Labour government will maintain the graduate route so that international students can come to the UK to study with "peace of mind and confidence".

 

Image source: StudyGroup

 

At the same time, addressing the previous government's measures, Phillipson said, "That was what the UK did under the Conservatives. We Labour won't do that."

 

Not only did she smoothly shift the blame, but she also said in an interview: "International students play a significant role in the local economy and revitalization, and when they return home after completing their studies, they bring us soft power and influence around the world."

 

Additionally, Phillipson emphasized that the graduate route visa under review will be retained under the Labour government.

 

That is, according to UK Immigration rules, undergraduate and master's graduates with a Graduate Visa can stay in the UK for up to two years after graduation without a job offer; doctoral graduates can stay for three years.

 

Image source: GOV.UK

 

"No restrictions on major, no need for a job offer in advance" — compared to the US, where only STEM fields enjoy similar benefits, this is very appealing.

 

At the same time, data shows that about 50% of Graduate Visa holders switch to a work visa, meaning that students who obtain this visa have a greatly increased chance of staying in the UK.

 

However, does such a positive government attitude really signal a favorable trend for studying in the UK?

 

 

International Students (and Their Money) Still Matter

 

—Why is the Labour government so friendly?

—Of course, because "international students (and their money) are important!"

 

At the end of July, the Prime Minister's office issued a statement saying that the UK is in a state of "bankruptcy and brokenness". According to Reuters, Labour claims the UK faces a fiscal gap of up to £20 billion.

 

In the process, many UK universities are also facing financial difficulties, and news of UK universities facing bankruptcy has been constant this year.

 

The UK higher education regulator, the Office for Students (OfS), stated in its annual report that 40% of universities in England are expected to be in deficit in the 2023-24 academic year.

 

Image source: Financial Times

 

Among them, "a growing number of universities" are experiencing low cash flow levels, and as many as 50 institutions are cutting budgets and staff:

 

  • The University of York's latest financial accounts show a deficit of £24 million

  • Coventry University needs to cut £95 million from its budget over the next two financial years

  • Sheffield Hallam University sent voluntary redundancy notices to 1,700 staff

  • Staffordshire University has cut more than 5% of its workforce

  • The University of Brighton laid off over 100 academic staff

  • Coventry University plans to cut £95 million over the next two years

  • The University of Aberdeen is considering discontinuing its modern languages honors degree program to address financial imbalances

    ............

 

 

In fact, due to the unique public nature of UK universities, the government does not cover the largest portion of their funding, and universities rely more on student tuition fees as a source of income.

 

But UK home students' tuition fees have been "frozen" for six years, so more and more universities are turning their attention to international students.

 

 

Raising International Student Tuition Fees

At the University of Oxford, international student tuition fees saw two consecutive jumps from the 2021 to 2023 academic years, and for 2024-2025, the increase compared to the previous year is as much as 10%, with undergraduate fees reaching £33,050 - £48,620.

 

Image source: University of Oxford

 

Recently, the London School of Economics (LSE) also updated its fee schedule for 2025/26 new entrants; compared to the previous academic year, some popular programs like Management, Accounting and Finance, and Economics have seen fee increases.

 

Among them, the highest increase was for Management, with a 25% rise, meaning an additional £6,808 per year.

 

Image source: LSE

 

 

"Lowering the Bar" by Relaxing Requirements

The University of York announced it will adopt "more flexible" admissions policies, accepting international students with lower-than-expected grades; for master's programs in Computer Science, Medicine, Physics, and History, the entry requirement has been lowered from a 2:1 to a 2:2.

 

Image source: The Guardian

 

Many institutions, having not filled their places, have extended application deadlines. For some programs at the University of Southampton, the deadline for Chinese students to apply extends to as late as August 23.

 

Image source: University of Southampton

 

Although the "funding cut wave" is becoming a problem for most institutions, for students planning to study in the UK, it may not necessarily be bad news.

 

After all, when universities face bankruptcy, they will realize the importance of international students, increasing your chances of entering a prestigious institution...

 

 

In summary, whether it's the policies and attitudes toward international students or the UK's own situation, everyone is adopting a wait-and-see approach, as the change of government undoubtedly requires some time for adaptation and adjustment.

 

Recent violent incidents in the UK, including robberies, arson, and assaults on police, have drawn widespread attention. Students already in or planning to go to the UK should take care of themselves and stay safe during their studies.

 

Image source: BBC

 

As the 2025 Fall application season is already underway, for students planning to apply to UK universities, it is important to stay informed about policy changes, pay attention to the latest developments, and plan your study abroad journey rationally, as every decision could have a profound impact on your future.

 

I hope everyone can find the most suitable path for their studies, and in the pursuit of knowledge and dreams, gain growth and fulfillment, and achieve the goals in their hearts!