UCUMore than four in 10 universities in England are expecting to be in a financial deficit by this summer, according to new report from the Office for Students (OfS).
The OfS, which regulates higher education providers, said universities were closing courses and selling buildings to cut costs, but "significant reform and efficiencies" were needed to turn the tide.
It said a drop in international students coming to the UK was the main reason for the worsening financial position.
Universities UK (UUK) said the report was "deeply sobering", while the education secretary said it demonstrated the necessity of raising tuition fees in England.
The report found that 117 of 270 higher education institutions (43%) registered with the OfS expected to be in deficit by the end of July - despite course closures, job losses and selling off assets.
This third consecutive year of worsening finances was mainly driven by a fall in international student numbers, it said, particularly following visa changes in January 2024.
The number of international students was almost 16% lower last year than previously expected, according to the report.
Universities have become increasingly reliant on higher fees from international students in recent years, as tuition fees from UK students have not kept up with inflation.
Their financial plans predict that more than half of the growth in their tuition fee income up to 2028 will come from international students - but the OfS warned that this was optimistic.
Susan Lapworth, chief executive of the OfS, told the BBC it was "not currently expecting any large or medium institutions to fail over the next 12 months or so".
She said: "Many institutions are financially secure or taking sensible steps to ensure that they're financially secure, so I wouldn't want students to be unduly concerned about these issues."
But she went on to say that the OfS was working with a small number of institutions that were "under real pressure", including ensuring they drew up plans to protect students in the event that they were forced to close.
Ms Lapworth said OfS was "constantly thinking" about when students might need to be told about the situation at those institutions, explaining: "We know that if the regulator says 'we're working with a particular university', the risk is that its financial failure is then precipitated by simply saying that."
The OfS has also said that any student going to university this autumn should expect the course to be delivered as advertised.
Education Secretary Bridget Phillipson said the figures were "concerning" and demonstrated why raising tuition fees in England from this autumn was necessary.
"Further reforms are needed to fix the foundations of higher education, and universities must do more to make their finances work," she added.
Vivienne Stern, chief executive of UUK, which represents 141 institutions, said the report was "deeply sobering" but not surprising given frozen domestic tuition fees, visa changes and "a longstanding failure of research grants to cover costs".
She said universities were doing "everything they can" to manage costs and that a UUK sector-wide taskforce would "unlock greater efficiencies".
But she added: "The scale of the challenge means none of this will be enough without government on the pitch too."
Jo Grady, general secretary of the University and College Union, said universities were "under severe financial stress".
"Over 10,000 jobs are already set to disappear from the sector as vice-chancellors attempt to bin courses and cut student provision to the bone," she said.
She added that university staff would gather in London on Saturday, calling on the government and university leaders to "protect higher education, one of our last world-leading sectors".
A recent snapshot of the financial decisions of 60 of the 141 institutions in UUK found that almost half of those responding had closed courses or reduced options for students in the last three years.
Industrial disputes are under way in several cities as a result.
Universities are now anxiously awaiting the government's draft plan for managing immigration, which is expected to further limit visas for students applying from Nigeria, Pakistan and Sri Lanka.
Attracting international students who pay higher fees and spend money in the UK is counted as an export. The rule change in January 2024 prevented postgraduate students from bringing relatives, and has led to a drop in numbers applying.
The higher fees paid by international students have been used to prop up university finances after many years in which tuition fees for students in England have barely increased.
While fees are due to go up this autumn to £9,535 for students in England, ministers have yet to say what will happen in following years.
The government is carrying out a review of university education, including funding, which is due to report this summer.
Additional reporting by Wesley Stephenson
