Foreign students could soon be hit with a controversial tax and tighter visa restrictions, under a new immigration white paper launched by Sir Keir Starmer in a bold bid to curb rising migration figures.

The Labour leader's proposals include a plan to force overseas graduates to leave the UK within 18 months unless they land a skilled job — a sharp reduction from the current two-year post-study period.

Universities, meanwhile, face being slapped with a 6 per cent levy on each foreign student’s tuition fee, in what would be the first tax of its kind on international learners.

The white paper, published by the Home Office, outlines a sweeping shake-up of the current system, with the financial impact of the levy expected to cost universities around £600 million, according to early estimates from Universities UK, the national body representing over 140 institutions.

Senior university figures have warned the plan could “jeopardise” the financial future of Britain’s higher education system, especially for courses like medicine and dentistry, which are already costly to run. These courses are often heavily subsidised by income from international students, meaning any drop in funding could pose serious risks.

The government insists that the proceeds from the levy will be reinvested to boost opportunities for British students, in line with its wider mission to upskill the domestic workforce and reduce reliance on immigration.

Early projections indicate the plan could lead to 7,000 fewer student visa applications each year and 12,000 fewer graduate visa applications annually.

Officials also pointed to concerns over quality, noting that while student visa numbers jumped 49 per cent between 2021 and 2023, visas for top 100-ranked UK universities actually dropped by 7 per cent in the same period.

In 2023-24, international students brought in a massive £10 billion to the UK economy through tuition fees alone.

For non-EU students, fees can range from £20,000 to over £41,000 per year, while EU students pay between £9,600 and £14,000, depending on course type.

Universities say the new tax could push the sector closer to breaking point.

Vivienne Stern, chief executive of Universities UK, said: “We’d like the government to explain to us how it will make it easier for us to provide opportunities for UK students to do those high-cost subjects if they’re taking some of that cost.”

She warned that, for instance, a course like veterinary medicine costs around £20,000 per student, with nearly half funded by international student fees.

The government maintains its reforms are essential to ensure the system is sustainable, fair, and focused on boosting British skills — but universities are bracing for what could be a seismic shift in the way they operate.