MPs have called on the coalition government to abolish "short-sighted" rules on English-language requirements for foreign students, which they fear could cost universities £1 billion.
Four Liberal Democrats, including former University of Cambridge academic Julian Huppert, have tabled a Commons motion warning that the "rushed and flawed" policy could cost the sector dearly.
The previous government raised the entry criteria for those wanting to study English in the UK as part of its bid to deter bogus applications for "Tier 4" visas for students.
As a result, foreign students wanting to improve their language skills on feeder courses ahead of attending university will now need the equivalent of a high grade at GCSE English to enter the country.
The early day motion, tabled last week by Stephen Lloyd, MP for Eastbourne - a major centre for English-language study - said the changes could prevent up to 100,000 students from studying in the UK.
It also uses industry figures to estimate that "£400 million per annum and 3,400 jobs will be lost from the teaching sector and £1 billion from the university sector".
Tony Millns, chief executive of English UK, which represents accredited English-language centres, said: "Universities UK statistics show that about 46 per cent of international students going into UK universities are recruited from foundation year and English-language courses they have attended here in the UK. This is nearly half of universities' international student intake at a time when many institutions are being kept afloat by international student fees."
English UK is bringing a judicial review against the Home Office but will drop the action if the changes are reversed.
Dr Huppert, the new MP for Cambridge, said the policy was already beginning to have an impact in his constituency, where 23 English-language centres are based.
He said: "I think (the changes) were very short-sighted. It does not make sense that people should be good at English before they come here to study English. I think the focus should be on trusting the institutions to vet their students."
Meanwhile, hundreds of private colleges across the country are set to hear whether they have been granted "highly trusted" status by the UK Border Agency.
Under other changes brought in by Labour, only "highly trusted" colleges will be able to recruit foreign students to "level three" and sub-degree courses that include work placements. It is feared that restrictions are also likely to affect universities, which receive fees from colleges for accrediting courses.
Damian Green, the Conservative immigration minister, said he was "looking at the whole area of Tier 4 visas in order to improve the system to encourage legitimate students, while closing existing loopholes".