University students in England are receiving only two-thirds of the funding provided a decade ago, as inflation and sustained government cuts continue to erode the resources available for

teaching, according to new analysis from vice-chancellors.

Universities UK (UUK), the body representing higher education institutions, says its figures highlight a sector under mounting financial strain—one that could face even sharper pressures if the government proceeds with a proposed levy on international student fees in this week’s budget.

UUK’s analysis calculates that today’s undergraduates receive £6.4bn less in real-terms teaching funding than their counterparts in 2015–16. The shortfall helps explain why many institutions are reporting budget deficits and increasing dependence on income from international enrolments, as domestic tuition fees fail to keep pace with rising costs.

Annual tuition fees in England were allowed to increase this academic year to £9,535—the first rise in more than ten years. Education secretary Bridget Phillipson has also confirmed fees will continue to rise with inflation for the next two years, potentially reaching about £9,900 by autumn 2026.

But Vivienne Stern, chief executive of UUK, warned that the government’s planned tax on international student income would wipe out the gains from the fee increase and leave universities even worse off. While the inflation-linked rise is expected to generate around £440m a year, the new levy is projected to remove £780m from sector revenues.

The concerns were echoed by Joanna Burton, head of higher education policy at the Russell Group. She urged ministers to reconsider the levy, calling it “a tax on universities that would add further burdens and restrict investment in students, research and communities.”

According to UUK, overall teaching funding for each student in 2025–26 will amount to just 64% of its 2015–16 value after adjusting for inflation. The impact is already visible: earlier this year, nearly half of universities reported closing courses, while almost one in five had shut entire departments. Four in five institutions said they were weighing cuts to research budgets.

Recent announcements underscore the trend. The universities of Nottingham and Leicester are reviewing the closure of multiple courses, including modern languages, while Bradford University is shutting its chemistry, biomedical sciences, and acclaimed film and television programmes. One in three universities expects to post a financial deficit this year. Photo by ZC Comms, Wikimedia commons.