Scottish universities are grappling with severe financial pressures, with institutions in Dundee and Edinburgh among the most affected. According to Mary Senior, a senior official at the University and College Union (UCU) Scotland, a combination of domestic funding shortfalls and restrictive UK immigration policies has contributed to the crisis.
The financial strain has resulted in job cuts, significant budget gaps, and increased reliance on international student fees. While the Scottish Government has provided emergency financial support, concerns remain over the long-term sustainability of higher education funding in Scotland.
Impact of Underfunding and Reliance on International Students
A decade of underinvestment has left Scottish universities increasingly dependent on tuition fees from international students, according to Senior. While the Scottish Government covers tuition costs for Scottish-domiciled students, the funding allocated through the Scottish Funding Council has not kept pace with rising operational costs.
According to the Institute for Fiscal Studies, Scottish universities had a total of £2.7 billion in higher education teaching resources in 2022/23, with over half of this revenue coming from tuition fees paid by non-EU international students. This reliance has left universities vulnerable to external policy changes affecting international student numbers.
At Dundee University, financial difficulties have resulted in a £30 million budget shortfall, leading to planned job cuts and ongoing industrial action by staff. Meanwhile, Edinburgh University faces a £140 million funding gap and is preparing to reduce staff numbers.
Brexit and UK Immigration Policies Reducing Student Numbers
According to UCU Scotland, UK immigration policies have negatively impacted Scottish universities’ ability to attract international students.
Changes to student visa rules implemented last year, which prevent most international students from bringing dependents, have made it harder for institutions to recruit postgraduate students—a key source of income.
Official UK Government data shows that total study visa applications in the year ending January 2025 fell by 13%, with applications from dependents of students dropping by 84%. The decline in international student numbers has placed further financial strain on institutions.
Brexit has also played a significant role, leading to a sharp decline in EU student enrolments. According to the Higher Education Statistics Agency, the number of EU nationals studying in Scotland dropped from 21,505 in 2018/19 to 13,130 in 2022/23—a reduction of over 50%.
The loss of EU students has further compounded funding challenges, as they were previously treated as Scottish-domiciled students for tuition fee purposes but now face higher international fees.
While the Scottish Government has committed £1.1 billion in funding for university teaching and research, institutions continue to face financial uncertainty.
The UK Government has defended its migration policies, stating that while international students contribute to the economy, net migration must be reduced.
However, with universities increasingly reliant on overseas students for revenue, these policies may have long-term consequences for Scotland’s higher education sector.
