Edinburgh — The UK Government’s long-anticipated immigration white paper has sent fresh waves through higher education, with Scotland’s universities caught in the crosscurrents of policy changes, economic pressure, and political divergence.
While the decision to preserve the Graduate visa route has been welcomed by university leaders north of the border, deeper concerns linger over potential levies, compliance changes, and the long-term viability of international student recruitment — a financial cornerstone of Scotland’s higher education sector.
Graduate Route Survives — Barely
The white paper, released on Monday, confirmed that the Graduate route, which allows international students to stay in the UK for two years after completing their studies, will remain intact for now — albeit with “minor” changes.
This was a relief to many institutions, especially amid speculation that the route might be scrapped entirely as part of the UK Government’s broader immigration tightening agenda.
Claire McPherson, Director of Universities Scotland, said the confirmation would “offer some relief to institutions even if it is not the direction we wanted to see UK Government policy go in.”
Growing Dependency on International Fees
For Scottish universities, the stakes are high. A decade of flat domestic funding and rising costs has made international tuition fees a vital revenue stream — one increasingly used to cross-subsidise both Scottish-domiciled undergraduate places and the country’s research output.
According to the latest figures, non-EU international students now account for over 20% of total income for Scotland’s higher education institutions. At some universities — notably Glasgow, Edinburgh, and St Andrews — that figure is significantly higher.
In 2022-23 alone:
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Scotland hosted over 82,000 international students
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Their estimated net contribution to the UK economy: £4.75 billion, according to HEPI
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Around £1.2 billion of that was retained in Scotland
A UK-Wide Levy on Visas?
One of the white paper’s more controversial ideas is the possibility of a UK Government levy on institutions that sponsor international students, intended to fund immigration enforcement and system “resilience.”
McPherson said Universities Scotland would be seeking urgent clarification on whether any such levy would apply in devolved contexts like Scotland, where higher education policy is governed by the Scottish Government.
“A levy on this much needed income would be unwelcome,” she said, pointing to the financial pressures already facing the sector.
Compliance Regime in Flux
Another key change relates to compliance assessments for institutions that sponsor international students — a regime that is expected to become more stringent, with a new risk-based model and tougher data reporting requirements.
While UK ministers argue the reforms are necessary to clamp down on abuse, Scottish universities worry the changes could penalise them disproportionately, particularly smaller institutions or those in rural areas.
“We need to understand what length of transition period will apply,” said McPherson. “Without that detail, it’s hard to plan responsibly.”
The Devolution Tangle
The white paper lays bare a deeper constitutional tension: how UK-wide immigration policy interacts — or doesn’t — with devolved sectors like education.
Although Scotland has no powers over visas or borders, it does have full control over education policy, funding, and institutional governance. That creates friction when immigration rules change in ways that directly impact university operations.
The Scottish Government has repeatedly called for a more tailored approach — or even a devolved immigration system — that would reflect Scotland’s distinct demographic needs and education landscape.
So far, Westminster has resisted.
A Fragile Business Model
Universities across the UK have come under fire in recent months for over-reliance on international tuition income, particularly from a handful of countries such as China and India. But for Scottish institutions, it’s become more of a necessity than a choice.
A recent audit by Audit Scotland warned that:
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10 out of 19 universities in Scotland reported operating deficits in 2023
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Inflation and pay pressures are squeezing margins further
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Capital investment in buildings, labs and digital infrastructure is falling behind
In that context, any policy that threatens international recruitment — or adds new costs — is a risk to the whole system.
Sector Reactions: Relieved But Wary
Initial responses from within the Scottish higher education sector have been cautious.
One university vice-chancellor told us off-record:
“We can work with higher compliance, but if you destabilise the Graduate route or start taxing institutions just for recruiting international students, then you’re risking the model entirely. There’s no Plan B.”
Student groups were more critical.
The National Union of Students Scotland said the white paper “reinforces a hostile environment” and risks turning away talented individuals who would otherwise contribute to Scotland’s economy and society.
Westminster’s Position: A Balancing Act
The UK Government insists the white paper strikes the right balance between openness and control.
A Home Office spokesperson said,
“The Graduate route remains, with refinements to ensure it aligns with the UK’s long-term workforce needs. We welcome responsible recruitment by universities but must ensure integrity across the system.”
However, ministers have also hinted that if international student numbers don’t “stabilise,” further restrictions could follow.
The Bigger Picture
What’s happening in higher education is part of a wider tightening of immigration across the UK. Net migration hit a record 745,000 in 2023. The Conservative Government, under pressure from its right flank and Reform UK, is looking to bring that number down sharply ahead of the next general election.
In that context, international students — once seen as a soft diplomatic and economic win — are now increasingly viewed as part of the migration statistics politicians want to cut.
That creates a strategic mismatch with Scottish policy ambitions, where attracting talent, boosting research, and reversing demographic decline are top priorities.
