The plans outlined today follow a high-profile public consultation, during which vice-chancellors warned of the grave threat posed to the sector if the flow of fee-paying students from outside the European Union were stymied.
Theresa May, the home secretary, announced a tighter accreditation and inspection regime for private colleges and a clampdown on the number of students able to bring dependants into the UK.
She added that the right of students to work in the UK after graduating would be restricted to those with job offers from trusted employers, and that the standard of English required to study on degree courses would rise.
The government had originally proposed to scrap all opportunities for post-study work, so the decision to maintain a limited route will be seen as a concession to the sector.
Ms May said: “My aim is not to stop genuine students coming here – it is to eliminate abuse within the system. Our stricter accreditation process will see only first-class education providers given licences to sponsor students.”
She added that the government’s trust in universities was “well placed”, but that some other institutions, “particularly in private further education and the English language sector, are not undertaking the due diligence we expect”.
She claimed that the changes would lead to up to 80,000 fewer visas a year, more than a quarter of the current total.
The University and College Union said the government had ignored advice from the academic community and the Home Affairs Committee, which last week urged it not to introduce measures that could damage the academy.
And Yvette Cooper, the shadow home secretary, said there were already signs that the government’s tough talk on student visas was putting off overseas applicants.
However, Nicola Dandridge, chief executive of Universities UK, said the proposals took account of most of the concerns expressed by vice-chancellors, “and will allow British universities to remain at the forefront of international student recruitment”.
She added that allowing some post-study work, albeit with tougher restrictions than at present, was “critically important” in attracting students.
“Without this we would be at a severe competitive disadvantage in comparison with other countries such as Canada, the US and Australia,” she said.
Les Ebdon, chair of the million+ group of post-1992 universities and vice-chancellor of the University of Bedfordshire, also welcomed the revised plans.
“The clarification that there will be no restrictive number cap on international students will help universities promote Britain as a destination of choice,” he said.
David Willetts, the universities minister, said: “Overseas students play a vital role in our education sector – not only financially, but academically and culturally.
“It’s important the government’s reforms leave legitimate institutions free to recruit overseas students as they see fit.
“This package strikes a reasonable balance between the need for a robust migration system to end abuse and ensure that genuine students continue to be welcome in the UK.”