British universities have warned that a significant decline in international student applications could undermine the government's planned £925 annual levy, intended to fund grants for disadvantaged British students. The levy, set to begin in 2028, relies on revenue generated from international student fees.

The warning comes as tighter immigration rules have affected recruitment from key markets, including Nigeria, China, and India. These countries have traditionally been major sources of international students, contributing significantly to university funding. With fewer applications, the financial stability of the levy is at risk.

The government's proposal aims to ensure that British students from lower-income backgrounds receive financial support through grants. The levy is expected to generate substantial revenue, which would be distributed to eligible students. However, the potential drop in international student numbers could reduce this income, threatening the sustainability of the program.

The decline in applications is part of a broader trend of reduced international student enrollment, driven by stricter immigration policies and changing global educational preferences. Universities have called for urgent action to address the issue and ensure the levy remains viable. The situation highlights the growing reliance on international students for funding and the challenges posed by policy changes.