According to experts, the levy may lead to a loss of 16,100 foreign students in just one year, resulting in university fee revenues declining by 240 million pounds. Estimates by a consultancy say that over five years a possible fall of 77,000 international students and 2.2 billion pounds in fees, which could also impact the number of places for home students.

Student unions, the universities, and education officials in the UK have strongly opposed the Labour Party proposal to introduce a levy on international students on the grounds that this would deter Indian and other foreign students from seeking higher education in the country and would significantly hurt university finances.

According to the media reports, the proposed levy, as a charge of 6% on overseas student tuition fees, is intended to fund means-tested maintenance grants for domestically resident low-income family students. Labour officials say revenue from the levy would be used to benefit working-class UK students, and Education Secretary Bridget Phillipson confirmed plans to introduce these grants by the end of the current parliamentary term. But universities and student associations contend that the shift could have an opposite effect, rendering the UK internationally less competitive. As per media reports, Amit Tiwari, president of INSA UK, noted that Indian students are the second-largest international population in the country next to China and pump over £4 billion into the UK economy every year.

Cost and Competitiveness

The suggested 6% charge has raised concerns that it may make studying in the UK too expensive for many. Public First, a policy consultancy, estimates the levy may lead to a loss of 16,100 foreign students in just one year, resulting in university fee revenues declining by £240 million. The consultancy estimates over five years a possible fall of 77,000 international students and £2.2 billion in fees, which could also impact the number of places for home students.

Student Voices: Economic Hardship and Uncertain Job Market

Indian students in the UK have also raised concerns over the economic and professional implications of the proposed levy.

Riya, a student of MSc Data Science at the University of Manchester, remarked, "Frankly, this fee is actually concerning for students such as me. We already pay so much for tuition and living here, and most of us have taken education loans to manage it. Adding another 6% on top feels unfair. The job market is not great either, so even if we finish our degrees, there’s no guarantee of a good job. It’s like we’re taking a huge financial risk just to study here. I'm seriously worried about what will happen if they roll this out."

Another student, pursuing a BA in Economics at the University of Birmingham, added, "We work really hard to save and plan for studying abroad. Many of us rely on loans from banks or families, and even then, it’s a struggle. The idea of paying extra just to support domestic grants feels like they’re treating international students as cash cows. On top of that, getting a good job after graduation is already difficult.”

Opponents of the levy say that although the policy is aimed at assisting local students, it may have unforeseen effects on universities and the broader economy. If international student enrollment falls off, the universities can expect less revenue, fewer resources, and even some program closures.

While Indian students consider their alternatives, experts believe that nations such as Australia, Canada, and the US stand to gain from a demand shift, providing competitive courses without further taxes. British universities must now balance local backing with their international appeal to bright students.