A New Era of Scrutiny and Cost: What the May 2025 Immigration White Paper Means for UK Universities | White Paper

The UK Government’s White Paper, Restoring Control Over the Immigration System introduced proposals for the education sector which mark a significant shift in the regulatory and financial landscape for Student Sponsors. While the stated aim is to safeguard the integrity of the student visa system, the proposed measures will tighten compliance obligations and financial contributions for universities. 

Stricter Compliance for Student Visa Sponsors

One of the most consequential proposals is the introduction of tougher compliance rules for universities holding student sponsor licences. The White Paper asserts that the student visa route is being “undermined” by both individual misuse and institutional negligence. In response, the government intends to make it more difficult for universities to retain their sponsorship privileges unless they can demonstrate robust oversight and genuine academic engagement from their international cohorts.

Currently sponsors undergo an annual Basic Compliance Assessment (“BCA”) which consist of meeting three metrics:

• A visa refusal rate of less than 10%
• A course enrolment rate of at least 90% and
• A course completion rate of at least 85%.

Failing to meet all three can result in revocation of the sponsor licence.

The White Paper proposes the following changes:

• Increasing the BCA metrics by 5%. 
• Implementing a Red-Amber-Green banding system which rates the performance of each sponsor. It is proposed to be made available to the public, effectively shaming any sponsor who is at risk of failing. 
• If a sponsor is at risk of failing the BCA, they will be restricted on the number of overseas students they can recruit. 

These changes are seen as particularly challenging for institutions with large and diverse international student populations, where external factors (such as visa processing delays or geopolitical instability) can affect compliance metrics.

The introduction of a public Red-Amber-Green rating system for student sponsors has been criticised for potentially damaging institutional reputations. Universities falling into the “Amber” or “Red” categories could face recruitment caps or even licence suspension, which would have serious operational and reputational consequences

Policy Context and Political Signalling

These proposals come amid a broader political narrative of reducing net migration and restoring public confidence in the immigration system. The government has highlighted a sharp rise in student visa grants—from 269,000 in 2019 to nearly 500,000 in 2023—and a concerning trend of asylum claims being lodged by student visa holders nearing the end of their stay.

Proposed Levy on International Student Income

In a move that has raised eyebrows across the sector, the government is also “exploring” the introduction of a levy on income derived from international student fees. While details are sparse, the stated intention is to reinvest the proceeds into the UK’s domestic skills and education system.

This proposal, if implemented, could exacerbate existing financial pressures already suffered in the sector. Many institutions are grappling with funding shortfalls. They rely on international tuition fees to subsidise domestic teaching and research. A levy would not only reduce net income but could also disincentivise the recruitment of overseas students, particularly in non-STEM fields where margins are already tight.

Vivienne Stern, Chief Executive of Universities UK, expressed concern over the proposed levy on international student income, stating: “Universities know they need to be more efficient and are driving the reform agenda. We need government to get serious about working with the sector to address the financial sustainability of universities. That means increasing per student funding; stabilising international demand; and working with us to sort cost-recovery rates on research so that universities can train the high-skilled workers Britain needs, and be engines for growth and a better standard of living in the decades ahead.”

There is a growing sentiment that these measures, while aimed at reducing net migration, risk making the UK a less attractive destination for international students. This could undermine the UK’s global competitiveness in higher education, especially when countries like Canada and Australia are actively expanding their international student recruitment.

Dr. Tim Bradshaw, Chief Executive of the Russell Group, said: “We are keenly aware of the challenges government is facing on immigration. We want to work with them on a system that is fair, while making sure UK universities remain attractive to international staff and students and continue to support skills and economic growth.” 

What Should Universities Do Now?

While the White Paper does not yet constitute law, it sets a clear direction of travel. Universities and their legal advisors should begin preparing now for a more regulated environment.

• Audit existing compliance systems to ensure they meet likely future standards.
• Engage with sector bodies such as Universities UK to influence the design of the proposed levy.
• Review financial models to assess the impact of a potential levy on international income.
• Consider legal strategies for challenging disproportionate or unclear regulatory burdens.

As ever, the devil will be in the detail. The government has promised further information in the Autumn Budget. Until then, institutions would be wise to prepare for a future where the privilege of hosting international students comes with significantly greater scrutiny—and cost.