Overseas student levy sparks 'deep concern'

Proposals for a 6% levy on overseas student tuition fees have raised concerns among some university leaders worried about predicted financial losses.

The new tax would help pay for means-tested maintenance grants, which the government said would help break down barriers.

However, a study by the Higher Education Policy Institute said the levy could cost Durham University £10m and Newcastle University £9m, putting them in the top 20 worst affected institutions in the country.

Newcastle University said it was "deeply concerned", while Durham University said it was awaiting details, but it might face "challenging decisions".

Maintenance grants were abolished in 2016.

Professor Chris Day, vice-chancellor and president of Newcastle University, said: "While we strongly support measures to improve financial support for students, we remain deeply concerned about the proposed levy on international tuition fee income to fund these changes.

"This risks undermining what the government is seeking to achieve, by reducing universities' capacity to invest in students, communities, and regional growth."

A spokesperson for Durham University said: "We may be faced with challenging decisions to maintain financial sustainability."

The university announced in January that it had to cut costs by £20m over two years, while Newcastle University said last year that it was facing a £35m financial black hole due to a decline in international students numbers.

Research by Public First warned that the North East could lose £87m in the first year of a levy due to projected falls in international student numbers, the Local Democracy Reporting Service said.

It said Newcastle Central and West was the constituency potentially suffering the eighth biggest hit in the country, just under a loss of £30m.

It also predicted the City of Durham could lose £14.5m and Sunderland Central £12.5m.

A spokesperson for Sunderland University said the levy could cost it "anywhere between £5m and £7m", based on last year's international student numbers.

"That is money that would otherwise be coming into the Sunderland economy," they said.

"While changes are happening, we need to be careful not to lose sight of the value these students bring, and the contribution they make to the city and the region."

The government announced on Monday that university tuition fees in England would increase every year in line with inflation from 2026.

Prof Day said it was a "step towards better financial sustainability in the sector".

Durham University said it welcomed a further increase in home undergraduate fees, but it would not resolve financial challenges.

The Department for Education (DfE) said it had taken "tough decisions" to put universities on a "firmer financial footing" and had refocused the Office for Students to monitor the financial health of the sector.