Controversial visa extension charges have already had a serious impact on the ability of UK universities and colleges to recruit overseas students, it emerged this week.
More than half the universities have missed their targets for international student enrolments for this academic year, indicating a sudden reversal of what was a strong upward trend before the original £155 charge was introduced in 2003.
Universities UK, which revealed the figures to The Times Higher this week, warned that a Home Office decision to almost double the visa extension costs would hit international student recruitment even harder next year.
It said that in a survey of its member institutions last autumn, 40 per cent of universities reported a fall or no increase in overseas student enrolments for 2004-05. This compared with an average 12 per cent increase in intakes over the previous three years.
The trend, if it continues, will open a yawning gap between universities'
recruitment plans and actual intakes.
Universities' financial plans - published by the Higher Education Funding Council for England - show that English institutions are hoping to increase overseas student numbers by more than 26 per cent by 2007-08.
With fee income from international students estimated to be worth £1.2 billion a year to UK institutions, a drop in overseas enrolments could mean millions of pounds of income being wiped off university budgets.
UUK president Ivor Crewe called on the Government to conduct a full review of the impact of the charges.
"It is particularly important, if the adverse effect of higher charges is what we predict, that the Government should undertake to look again at the level of charges," he said.
A survey by the Association of Colleges found that further education colleges had suffered a drop in international student recruitment that ranged between 10 per cent and 60 per cent.
Jo Clough, the AoC's international officer, said: "Many colleges feel that these charges could spell the end for international recruitment in further education. The higher cost will be the straw that breaks the camel's back."
Neil Kemp, promotions director for the British Council, said the UK could not afford to be seen as becoming more expensive in what is an increasingly competitive market.
"This is causing a great deal of concern, as Britain is already seen as the most expensive study destination by far," he said.