Indian students are being put off applying to UK universities, adding to their financial woes at a time when education institutions are already coping with constrained budgets, a new report into the stability of the higher education sector in England has revealed.

Based on UK Home Office data on confirmation of acceptance for studies (CAS) by UK providers from 2022-23 to 2023-24, an Office for Students (OfS) analysis released on Friday shows a 20.4 per cent drop in Indian student numbers – down from 139,914 to 111,329.

Indian student groups in the UK said the fall was to be expected amid limited job prospects and also safety concerns following recent anti-immigration riots in some cities.

“There has been a considerable decline in student visa applications from prospective non-UK students in some major source countries,” notes the report by OfS, a non-departmental public body of the government’s Department for Education.

“This data shows an 11.8 per cent decline in the total number of sponsor acceptances issued to international students, as well as considerable variation for students with different nationalities, with the largest declines reported in the number of CAS issued to Indian and Nigerian students, down 28,585 (20.4 per cent) and 25,897 (44.6 per cent) respectively,” it said.

It warns that universities with financial models that depend heavily on students from countries such as India, Nigeria and Bangladesh are likely to be significantly affected due to this downward trend.

“The number of international students from certain countries that send significant numbers to study in the UK has decreased significantly,” OfS cautions.

“By 2025-26, based on current trends and not taking into account significant mitigating action, we estimate a net income reduction for the sector of GBP 3,445 million, and, without significant mitigating actions, a sector-level deficit of minus GBP 1,636 million, with up to 72 per cent of providers being in deficit, and 40 per cent having low liquidity,” it adds.

The Indian National Students’ Association (INSA) UK said it was not surprised with the significant decrease in students from India given the government’s clampdown on foreign students being allowed to bring along their dependent partners and spouses.

“Students are not allowed to bring their partners to the UK under the new policy and given the economic conditions here and recent rioting stories, unless the government addresses this issue the outlook for UK universities is bleak as they rely heavily on Indian students,” said INSA UK President Amit Tiwari.

Indians overtook the Chinese in recent years as the leading nationality granted study visas to the UK and are the largest cohort to access the Graduate Route post-study work visa, which was thrown into disarray due to a review which has since concluded it is here to stay.

“Many reasons contribute to the decline in numbers, including the Conservative ban on dependents, confusion around post-study work visa, increase in skilled worker salary thresholds and an apparent lack of jobs in the UK,” said Sanam Arora, chair of the National Indian Students and Alumni Union (NISAU) UK.

“We discovered the scale of misinformation that continues to persist; for the first time, safety is also being raised as a concern… Universities need to ensure that they are communicating the UK offer adequately and at scale in India to address the confusions that persist," she said.

"Universities also need to invest significantly in their employability support in order to stay competitive and provide a wholesome, outcome-oriented offer for students,” she added.

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