The link between international student tuition and global competitiveness

As reported in The Guardian last week, Professor Shitij Kapur, vice-chancellor of King's College London, draws a line between the reputation of UK higher education and the country's ability to attract international students.

Prof Kapur says, “UK universities still provide the best education in the world, thanks in part to the premium tuition fees they earn from international students.” He suggests that without that revenue, the quality of UK institutions and the national competitiveness of the UK in the global economy would be significantly imperilled.

Today, we look at Prof Kapur’s assertion and explore what it means not just for the UK, but for other major study destinations with high numbers of top-ranked universities.

The importance of international student tuition

In an era where public universities in advanced societies such as Australia, Canada, the UK, and the US receive less government funding than in the past, elite institutions’ ability to deliver quality programmes, hire top professors, and maintain support staff is under pressure. Alternative revenue sources are essential. For many universities, international student tuition fees keep the most popular programmes running and well resourced. Mr Kapur, speaking of the situation in the UK, says:

“The role of international students in our universities is a national conversation we need to have. International students are not some sort of oddity or indulgence of our universities. They are now a fundamental feature of our system. Not only does it benefit the international students, it greatly benefits our domestic students, in addition to UK as a nation. Therefore, if we’re going to change it, we should do it knowingly after considering all the implications for our domestic students, for our universities, for our productivity as a nation.”

The correlation between innovation and international students

Highly ranked universities contribute a massive proportion of the scientific talent in the nation in which they are located. A great deal of these universities’ funding for elite faculty, cutting-edge programmes, and student services comes from the higher tuition fees that their international students pay.

Consider these statistics for the link between prestigious institutions and the proportion of international students they enrol:

• At Oxford University, 41% of students and 48% of academic staff come from countries outside the UK.
• At University of Melbourne, 45% of all students are from outside of Australia.
• At the University of Toronto and at McGill University, 30% of the student body is composed of international students.
• At Harvard University, international students make up 27% of the total student population.

Now consider what new government policies and policy directions might mean for these institutions’ ability to remain as highly ranked as they are now – especially in a context where the share of Asian universities in top rankings is rapidly growing. For example:

• In the US, President Trump wants the proportion of international students at Harvard to nearly halve through a cap of 15%.
• In Canada, where caps have been applied primarily (and now exclusively) at the undergraduate level, the University of Toronto welcomed 16% fewer international undergraduate students in 2024/25. McGill experienced a 22% drop in new international applications in 2024/25, which will without doubt reduce the number of international enrolments in 2025/26. These are only two examples of losses across the entire Canadian university sector.

The example of McGill

McGill is by no means the only prestigious university to be facing problems as a result of government policies exerting downward pressure on international student enrolments. However, we can use it as a case study of what happens when a top-ranked university loses a significant proportion of its operating revenue due to declining international student numbers.

At McGill, the projected deficit for Fiscal Year 2025 is CDN$15 million. This loss is due to several factors, including a range of provincial government policies that have cost McGill both out-of-province students and international students. McGill University Provost Christopher Manfredi says: “Without corrective action, annual deficits will grow to $44 million in 2026, $61 million in 2027 and nearly $75 million in 2028.”

Were that to happen, says Mr Manfredi, it could trigger the government to remove the funding source called “subvention conditionnelle.” For McGill, this represents a portion of its annual grant representing close to $40 million. Mr Manfredi also says deepening deficits could trigger “further restrictions and an erosion of McGill’s autonomy.”

What “corrective actions” are planned or already being implemented at McGill? Staff cuts are the first unfortunate correction given that 80% of McGill’s expenses are salary-based. Mr Manfredi says: “With fewer staff, we cannot maintain the same operations.”

Doing the math

In 2023, Canadian higher education specialist Alex Usher wrote about the differential between the revenue contribution of domestic students and international students at McGill, as summarised in the chart he created:

In October 2025, McGill welcomed 781 fewer international students than in 2023, a loss of 8%. If we look at the chart above, that loss of international students equates roughly to a loss of CDN$21.1 million for McGill in international student tuition over two years. This loss will deepen given the 22% drop in international student applicants in 2024/25.

This math illustrates just how affected McGill's finances will be by a serious decline in international students. Forced to operate with less budget, McGill will be hard-pressed to maintain a range of programmes for domestic and international students alike. As Mr Manfredi notes: "In the long term, McGill has opportunities to generate revenue by offering new programs or delivering existing ones in different formats, such as online, and expanding global initiatives. However, these revenue streams will take time to have a meaningful impact.”

Extrapolating the logic

McGill University is ranked #41 in the world in the Times Higher Education (THE) rankings for 2026 and 27th according to QS. It is in the top 2% of all universities in the world. University of Toronto is as well (21st in THE’s ranking and 29th according to QS). Oxford is #1 according to THE and 4th in the QS rankings. Harvard is #5 according to both sources. University of Melbourne is in the top 20 in the QS ranking and top 50 according to THE.

Every year, these university powerhouses produce some of the most successful graduates in the countries in which they are located, including in the fields of AI, medicine, and engineering. Overseas, they are among the most sought-after universities by students across the world. Their brands – and those of other top-ranked universities in the countries in which they are located – help to anchor the popularity of their country as a study abroad destination and the reputation of the entire national higher education system that surrounds them.

In the US and Canada, the impact of government policies and rhetoric on international student demand and enrolments is not just jeopardising the operations of prestigious universities (and all universities, for that matter). By depressing international student numbers and associated revenue – without increasing public funding that could mitigate these losses – they threaten to damage the entire post-secondary landscape, thus reducing their countries’ potential for innovation.

As King's College London's Professor Shitij Kapur says: "If we’re going to change [the role of international students in UK higher education], we should do it knowingly after considering all the implications for our domestic students, for our universities, for our productivity as a nation.”

For additional background, please see:

• "ICEF Podcast: Engine of growth: The true value and impact of the international education sector"
• "US: Study estimates that changes to international student policies could reduce GDP by up to US$481 billion per year"
• "UK confirms levy on international student fees as new analysis argues that government is 'drastically underestimating' the impact of the move"
• "Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy"