Levy to be charged even if student drops out, DfE confirms

Ministers have dismissed calls to exempt more students from the international fee levy, confirming that English universities will be charged even for enrolments who later drop out. 

Publishing its response to a consultation on the coming charge, the Westminster government said it “remains of the view” that institutions should pay the £925 flat fee for any international student who is on their course for two weeks or more, even if they subsequently quit their degree.

It has also told universities that it won’t bend to calls to introduce more exemptions for certain students, for example those taking postgraduate courses, saying introducing “sizeable” concessions could “jeopardise” the revenue generated by the scheme.

The Department for Education (DfE) response confirms plans to introduce the levy from the start of the 2028-29 academic year, despite fears that the fee will aggravate universities’ financial woes.

The sector has been appealing to likely incoming prime minister Andy Burnham to reconsider the move, with the vice-chancellor of Durham University last week calling the levy “absolute insanity”.

The government said it received 91 responses to its consultation on the levy’s design and delivery.

Alongside publishing its response, it announced plans for the Office for Students (OfS) to run two trial “delivery calculations” based on student data from academic years 2026-27 and 2027-28 to estimate costs. The results will be shared with providers to support their “financial planning” and allow the OfS to test its processes and draft guidance accordingly.

The government has previously committed to spending funds raised by the levy on the reintroduction of maintenance grants for domestic students who “need them most”. In its response to the consultation, it said the money will also be put into the “higher education and skills system” more broadly, with further detail to come in the next spending review.

The previously announced rate is to stay the same, despite “questions and concerns from providers” about how the charge is calculated, the response notes, with the government also still intending the levy amount to increase in line with inflation.

However, the DfE also confirmed that it will push ahead with its allowance of 220 “free” international students per provider. “Based on the intended levy charge of £925 per student, this exempts providers from up to £203,500 per year,” the document states.

“This allowance will mitigate the levy’s impact on smaller providers, particularly those operating specialist and resource intensive models with limited other means of cross-subsidisation. The allowance will be kept under review.”

When it comes to paying the fee, the OfS is expecting to invoice universities at the start of February each academic year – meaning the bulk of institutions will pay sometime in March.

Further detail on the levy is included as part of the draft finance bill, which is about to undergo eight weeks of technical consultation.

Should that bill be approved, the levy will form part of the autumn budget later this year.

georgia.luckhurst@timeshighereducation.com