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As the dust settles on the publication of the immigration White Paper, UK universities are left uncertain whether to breathe a sigh of relief or to brace for damaging impact.

The headline announcement ¨C the reduction of the post-study work visa from two years to 18 months ¨C came as a shock to many in the sector. Until now, it was widely assumed that the Graduate Route would be spared from reform.

Much of the recent speculation had centred on potential restrictions for students from specific countries or higher salary thresholds for the Graduate Route. Few anticipated that the government would target the post-study work offer so directly.

This move feels like something of an own goal. With competitor nations like Canada and Australia actively restricting international student numbers and raising visa application fees, the UK had a golden opportunity to strengthen its global position ¨C particularly in contrast to the increasingly restrictive immigration policies being rolled out in the US.

Still, while the shortened visa may diminish the UK¡¯s competitive edge, it doesn¡¯t knock it out of the race entirely. Prime Minister Keir Starmer, in his speech launching the White Paper, reaffirmed the importance of international students to the UK¡¯s universities and economy. He also emphasised the need to stay competitive to attract top global talent.

Despite the six-month reduction, the UK¡¯s international education offer remains strong. Beneath the headline change, the White Paper reaffirms a welcoming stance towards international students. It sends a clear message to the world that these students are still seen as a force for good and will be treated fairly, regardless of their country of origin or their chosen institution.

More ambiguous, however, is the proposed levy on revenue from international student fees. At a time when UK universities are already struggling financially, slicing off a portion of this vital income stream to reinvest in the broader education and skills system may feel like yet another strain on already stretched resources.

Details of the levy are expected in the autumn budget, but its inclusion in the White Paper is the clearest signal yet of the government¡¯s intended quid pro quo ¨C namely, continued support for the Graduate Route and international student inflows in exchange for sector-wide reform and efficiency.

Whether the levy is fair is up for debate. But just this weekend, skills minister Jacqui Smith for having ¡°lost sight¡± of their public responsibilities and neglecting the needs of local students. Perhaps the levy is designed, then, to refocus attention back on the domestic agenda and to expand opportunities for the most disadvantaged in our society, via widening participation and access initiatives ¨C effectively helping universities to fulfil their social mobility missions. If so, it could be seen as a justified redistribution of wealth within the system.

Still, this raises the key question of whether universities should bear the cost of such reforms. Would it not be more equitable and consistent for this government to collect the levy directly from international students through a surcharge ¨C akin to Labour¡¯s VAT on private school fees? Either way, the likely outcome is the same, with institutions increasing international student fees to offset the pending financial hit.

Moreover, if the levy is to be collected by the Department for Education, whose remit only covers England, it is inevitable that it will apply to English universities only. This could direct the attentions of price-sensitive prospective students towards institutions in other parts of the country, where no compensatory fee-hike would need to be applied. This would effectively be a gift for the devolved administrations at England¡¯s expense.

Other risks include the redirection of the levy outside higher education, potentially funding other parts of the skills system ¨C or, worse, disappearing into the ¡°black hole¡± of the Treasury with no tangible benefit to students, institutions or employers. Without a clear plan, there is a real danger the levy could simply become a stopgap to help address the national deficit.

In short, while the White Paper ends speculation about the UK¡¯s offer to future international students, it opens up a whole host of new questions for the higher education sector ¨C especially around the evolving role and purpose of universities.

With the prospect of becoming involuntary tax collectors from international students, the challenge for the sector ahead is clear: It must now fight to retain as much of the benefits of that tax for itself as possible.

is director of the Finsbury Institute at City St George¡¯s, University of London.