University financial resilience: UKVI and international students

The economic, as well as the broader social and cultural, benefits brought to universities by international students are well known.  Protecting the ability to attract international students is therefore of vital importance to universities, particularly during a period in which finances are increasingly strained due to, amongst other factors, the freeze on home undergraduate tuition fees.

Any university that finds itself in financial distress must therefore be extremely mindful of its duties to UK Visas and Immigration (UKVI), a division of the Home Office responsible for operating the UK’s visa system.

  1. UKVI and student sponsorship

Any foreign national who wishes to study in the UK must be sponsored by an education provider.  To become a student sponsor, a university must hold a student sponsor licence.  A student sponsor licence is obtained by applying to UKVI.

The regulatory framework for the sponsoring of students by higher education providers is set out in UKVI’s Student Sponsor Guidance.

UKVI has a duty to ensure that all student sponsors discharge their responsibilities, which are set out in the Guidance.  It will take compliance action when it considers that a sponsor has failed to discharge its responsibilities, or otherwise poses a risk to immigration control.

  1. OfS and educational oversight

One of the requirements set out in the Guidance that a sponsor must satisfy is to ensure all its sites meet acceptable educational quality standards (otherwise known as ‘educational oversight’).  For universities, this assessment is carried out by the Office for Students (OfS).

As discussed here, there are a range of issues that might trigger a reportable event to the OfS.  Where in turn this leads to a failure to meet the standards required by the OfS through its educational oversight function, OfS will notify UKVI of that failure.  The sponsor is also required to notify UKVI within 20 working days where it has failed to meet the OfS’ educational oversight requirements. 

It will then be up to UKVI to consider whether the university is eligible and suitable to continue to hold its student sponsor licence.  If it decides a sponsor is no longer suitable to retain its licence, then compliance action will be taken against it.

  1. Reporting material changes

Sponsors are also under an obligation to report any changes to UKVI which may affect their student sponsor licence.

The Guidance lists insolvency as being a material change that must be notified to UKVI.  It is often the case however that universities can be in financial distress but are not actually insolvent.

Although a likely breach of a financial covenant is not specifically listed as a material change, it is arguable that this may still affect a university’s student sponsor licence.  If so, then UKVI would need to be notified of the change.  If it is not reported, and UKVI subsequently finds out about the breach (or likely breach), then this may result in sanctions being imposed.

  1. Potential consequences

Where there has been a breach of sponsorship duties, UKVI will assess the issue and decide on the most appropriate course of action to take.

Where the breach is an isolated or minor issue, the sponsor is willing and able to correct it, and the sponsor poses no continuing threat to immigration control, UKVI will in most cases support the sponsor in making the relevant improvements by issuing an action plan, which sets out the steps the sponsor must take in order to retain its student sponsor licence.  This is akin to a student protection directive issued by the OfS.

However, where there is a serious breach of a sponsor’s licence indicating a significant or systematic failing, the sponsor no longer meets the eligibility or suitability requirements for holding a student sponsor licence, or UKVI considers that the sponsor constitutes a serious threat to immigration control, UKVI may decide to revoke the sponsor’s licence.

If UKVI has grounds to believe that such a situation has arisen, it may act immediately to remove a sponsor from the register of student sponsors, stop the sponsor from assigning Confirmation of Acceptance of Studies (CAS) and prevent the use of any assigned but unused CAS while it investigates the matter further.

Any action which prevents or limits a university’s ability to enrol international students, whether temporary or permanent, could have significant implications depending on the timing in the recruitment cycle, and will only exasperate any financial difficulties already being experienced.

It is therefore of vital importance that, even in periods of financial challenge, universities continue to meet their obligations to UKVI as set out in the Guidance where possible or ensure that they engage with UKVI so as to try and limit the severity of any potential sanctions.

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Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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