As foreign student numbers fall, UK varsities’ surplus shrinks to £800 mn; mid-tier institutions record a deficit

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Income from non-UK student fees also rose slightly from £12.2 billion to £12.4 billion, despite a fall in international entrants recorded earlier that year, as assessed by HESA.

Where does the money come from?

The financial statements show how dependent universities have become on tuition-driven income.

According to the HESA data, tuition fees and education contracts remained the single largest source of earnings at £28.28 billion. Research grants and contracts contributed another £7.58 billion, while the remaining income came through funding body grants, investment income, donations, endowments, and other streams.

At the same time, staff costs continued to dominate expenditure. Universities collectively spent £28.27 billion on salaries and staffing-related expenses in 2024-25, nearly matching the total income generated through tuition and education contracts. Other expenditure included operating expenses, depreciation, finance-related costs, and restructuring expenditure.

Overview of the sector’s financial structure

Billion-pound campuses do better among the entire lot

Despite pressures across the sector, a small group of elite, research-intensive institutions continued posting billion-pound incomes.

University of Oxford emerged as the highest-earning institution in the HESA dataset with an income of roughly £3.02 billion. The university spent around £2.82 billion during the year, leaving a surplus close to £200 million.

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The University of Cambridge followed with an income of around £2.66 billion, although its expenditure slightly exceeded earnings, placing the institution in deficit. University College London reported income exceeding £2.2 billion while maintaining a surplus position.

Among other major earners, Imperial College London and the University of Edinburgh also remained among the sector’s largest financial performers.

The top institutions reported the following financial positions:

The gap between these institutions and smaller regional providers remained substantial, particularly as research-intensive universities continued benefiting from stronger research funding, international recruitment, and global partnerships.

Not all universities stayed in the black

Away from the sector’s top earners, several universities reported sizeable deficits in 2024-25, highlighting growing pressure on institutions operating with tighter margins.

University of Staffordshire recorded one of the largest deficits in the dataset, spending roughly £82.5 million more than it earned during the year. Coventry University followed with a deficit of nearly £67 million, while Cardiff University reported a shortfall approaching £57 million.

Queen’s University Belfast also recorded expenditure exceeding income by approximately £48 million.

Among institutions reporting major deficits are:

The data suggests that while large institutions continue to generate substantial revenue, many mid-tier providers are facing increasing financial strain as costs rise and overseas enrolment growth slows.

Even the biggest are under pressure

The HESA figures also show that high income did not necessarily translate into financial comfort.

Alongside Cambridge reporting a deficit, the University of Leeds also spent more than it earned in 2024-25. University of Birmingham, despite generating significant revenue, reported only a marginal surplus.

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The trend points to mounting pressure from rising staff costs, inflation-linked expenditure, infrastructure spending, and continued dependence on international tuition income.

Immigration changes and overseas enrolment slowdown

The financial data comes against the backdrop of major immigration policy changes introduced in the UK since early 2024, many of which directly affected international student intake and mobility.

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In January 2024, the UK government barred most international postgraduate students from bringing dependants to the country, a move that particularly affected demand from countries such as India and Nigeria. The period also saw tighter scrutiny of student visa applications, stricter compliance checks for universities, and wider migration-control measures introduced through skilled worker visa reforms and higher salary thresholds.

The Graduate Route visa further remained under review during much of 2024, creating uncertainty around post-study work opportunities for international students. Together, these developments coincided with a slowdown in overseas student enrolments, even as universities continued relying heavily on international tuition fees to support finances.