University students in England are now receiving only two-thirds of the funding available a decade ago, after years of inflation and government cuts have reduced teaching resources, according to Universities UK (UUK).
The analysis found that today’s undergraduates are receiving £6.4 billion less in real terms compared to students pursuing the same degrees in 2015-16. Vice-chancellors warn that the situation may worsen if the government implements a new levy on international student fees, which is set to be announced in Wednesday’s budget.
Rising Costs and Reliance on International Students
Many universities are already struggling with budget deficits, as domestic tuition fees have failed to keep pace with rising costs. Institutions now rely heavily on revenue from international students to balance their finances.
Education Secretary Bridget Phillipson recently approved an increase in annual tuition fees to £9,535—the first rise in more than a decade. Fees are set to continue rising with inflation, potentially reaching around £9,900 in autumn 2026.
While the inflation-linked fee hike could add roughly £440 million per year in funding, the proposed international student levy is expected to remove £780 million annually, according to UUK.
University Leaders Raise Concerns
Vivienne Stern, UUK’s chief executive, said: “The fee rise was the right step, but the government’s plan to tax international students takes more money out than it puts in. This move undermines financial stability and limits universities’ ability to support students and research.”
Joanna Burton of the Russell Group added: “The government must reconsider this levy. It would burden universities further and restrict investment in teaching, research, and communities.”
Impact on Courses and Research
UUK’s survey found that 49% of universities have closed courses and 18% have shut entire departments due to funding pressures. About 80% are considering cuts to research spending. Notable course closures include modern foreign languages at Nottingham and Leicester, and chemistry, biomedical sciences, and film programs at Bradford University.
Funding Decline in Numbers
Adjusted for inflation, teaching funding per student in 2025-26 is just 64% of what it was in 2015-16. One in three universities forecast financial deficits for the current academic year.
A Department for Education spokesperson said: “We are taking steps to strengthen the sector’s finances, including annual tuition fee increases and refocusing the Office for Students to help universities meet future challenges.”
