Bleak outlook for business school recruitment as levy approaches

International student recruitment at UK business schools has seen “a notable deterioration” over the past year, and deans predict that things will get worse despite pressure from parent universities to increase income.

Substantial changes to the regime for universities that sponsor international student visas has been a key factor in the reduction, according to the annual survey of the Chartered Association of Business Schools (CABS), which polled 59 institutions.

It found that 69 per cent of schools reported lower international enrolments for 2026-27, with 48 per cent reporting significantly lower enrolments compared with the previous academic year.

This was a stark contrast with last year’s results, where just 35 per cent reported lower year-on-year enrolments. For this academic year, just under one in five (19 per cent) reported higher international enrolments, representing a significant decline from the previous year, when nearly half (46 per cent) said the same.

Stewart Robinson, the chair of CABS, told Times Higher Education that the survey results were “worse than expected”.

“We’ve been warning about the impact for two or three years now of changes in policy on international students, and I think it’s really come home to roost this year.”

The decline was “particularly pronounced”, the report says, at postgraduate level, where 75 per cent of schools reported lower international postgraduate enrolments, including 60 per cent reporting significantly lower enrolments. Just 12 per cent reported higher enrolments, compared with 45 per cent in 2025-26.

“This represents a substantial reversal of the improvement seen in last year’s results,” the report outlines. It adds that factors including the recent rise in visa refusals and the tightening of the Basic Compliance Assessment (BCA) metrics “are having an impact” on the sector’s ability to recruit.

The report also raises concerns that a gap is emerging between pre- and post-92 institutions’ ability to weather the financial challenges.

More than half (54 per cent) of post-92 schools reported smaller overall enrolments in autumn 2026, compared with 20 per cent of pre-92 schools. In contrast, 60 per cent of pre-92 schools reported larger enrolments, compared with just 16 per cent of post-92 counterparts.

Robinson said that while “on the surface” plans to retain two-year graduate visas for graduates at high-performing universities are “positive” news, the announcement could “reinforce this dichotomous sector” because “the shift will [see more go students] to the pre-92s, and move away from the post-92s”.

He said: “I think we have to be very concerned about what’s happening with the post-92s. Particularly bearing in mind that they’re often at the forefront of widening participation and regional agendas and that business support tends to be stronger among those institutions.

“So actually, the ultimate effect of this is damaging those agendas, at a time when the government, of course, is particularly trying to push an agenda of devolution and the role of universities.”

The report says the financial outlook for business schools is “concerning”, with three in five schools (59 per cent) anticipating a decline in their income over the next year, including a fifth (19 per cent) steeling for a significant drop.

This represents a “sharp reversal in financial expectations” compared with last year’s survey, where only 21 per cent anticipated a decline.

“The latest results therefore indicate a substantial weakening in confidence about future income, with the balance shifting from a clear majority expecting growth to a clear majority now anticipating lower income,” the CABS report says.

The introduction of the international student levy in 2028 is widely expected to make things worse, with 71 per cent of deans saying it will negatively impact recruitment.

The most commonly anticipated response to the levy is to pass on part of the additional cost to students through higher tuition fees, selected by 44 per cent of respondents. About a third (35 per cent) said they expect their university to absorb the cost internally or reduce expenditure elsewhere in the university (35 per cent), while just under a third (30 per cent) anticipate reductions in expenditure within the business school.

Some 86 per cent of deans said that their parent institutions’ finances were reliant on the business school’s ability to recruit, and half of business schools (50 per cent) said that their parent institution had asked the business school to expand international operations to help address the “challenging financial circumstances”.

“Institutional finances are highly dependent on the performance of their business school. So in a sector that is already struggling financially, this means that there will be further concerns about finances and, of course, with little light at the end of the tunnel,” Robinson said.

juliette.rowsell@timeshighereducation.com