New sponsor licence rules in 2025: What UK universities need to know about risks to international student enrolment

The UK Government’s proposed wave of changes could significantly affect how universities recruit and retain international students. These proposed updates to the Sponsor Licence system, detailed in the latest white paper, mean that higher education institutions must now meet stricter compliance standards and prepare for potential new financial and operational burdens.

If your university is a licensed student sponsor, these changes could impact your bottom line and the way they attract overseas students. In this article, we’ll break down the main proposals and explain what they could mean for your institution.

1. Tuition fee levy on international students

One of the headline proposals is the introduction of a levy on tuition fees charged to international students. The illustrative rate in the government’s white paper is 6%, although the final figure will be confirmed in the Autumn Budget.

What this could mean for your university:

• If the cost is passed on to students, it’s estimated that international enrolments could drop in the long term.
• Institutions may need to absorb the cost or find ways to increase the perceived value of their offer to justify higher fees.
• This policy could reduce the financial incentive to recruit overseas students — just as universities are becoming more reliant on that revenue.

2. Higher compliance standards for sponsor licences

Universities must already meet basic standards to retain their Student Sponsor Licence, including:

• Visa refusal rate of less than 10%
• Course enrolment rate of over 90%
• Course completion rate of over 85%

From 2025, the government plans to increase each of the above thresholds by 5%.

What this means for your licence:

• Government data suggests that 22 universities would have failed under these stricter rules if they had applied in 2023–24.
• Falling below just one of these new metrics could result in revocation of the university’s sponsor licence, meaning they cannot enrol new international students.
• Institutions nearing the threshold may face government intervention, such as action plans or caps on international enrolments until performance improves.

3. Stricter oversight of recruitment agents

From 2025, universities using international education agents will be required to sign up to a new Agent Quality Framework. This is intended to crack down on:

• Misrepresentation of visa rules
• Recruitment of students who aren’t genuinely intending to study

What your university should do:

• Review all current agent partnerships and their track records
• Put in place strong oversight and accountability measures
• Ensure agent training and practices align with the new framework to avoid non-compliance

4. Local impact considerations in recruitment strategy

The white paper also proposes that sponsors consider local impacts when recruiting international students — though details on what this means remain vague.

What should universities do now?

With these changes on the horizon, it’s essential that institutions review their sponsor licence strategy and prepare early. At Gherson, we work closely with sponsors across the UK to ensure compliance with ever-changing immigration rules. If you’re concerned about how these new proposals could affect your ability to recruit and retain international students, get in touch.

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Updated: 17 June 2025

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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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