What the Autumn Budget means for UK higher ed, changes across paid ads, and President Trump stresses the value of international students

28 November 2025Newsletter

Welcome to The Student Funnel, a monthly higher ed sector newsletter from Hybrid, a leader in student marketing and recruitment strategies. We highlight news, trends, and behaviours that impact the sector and share insights on how to better connect with your audiences.

Last week, the eagerly awaited UK Government’s Autumn Budget was announced, bringing the most significant shake-up to higher education funding in a decade.

Key policies affecting higher ed at a glance:

Tuition fee caps set to rise to £9,790 in 2026/27 and £10,050 in 2027/28.
International student levy confirmed: a flat £925 per international student from 2028 (to be reinvested into higher ed and skills).
Maintenance grants returning for disadvantaged students in priority subjects (up to £1,000).
Student loan repayment thresholds frozen, increasing repayments for most graduates.
Care leavers guaranteed maximum maintenance support regardless of age.
Childcare, DSA and dependants’ support unchanged or tightened, meaning rising costs for many.
SEND (Special Educational Needs and Disabilities) costs are shifting from Councils into DfE budgets, creating future pressure across education funding.

Let’s dive into what this means in a bit more detail…

The details surrounding the new international student levy have been highly anticipated since the release of the Labour government’s Immigration Whitepaper back in May, but the wait for universities is over…

From 2028, English universities (Wales, Scotland and N. Ireland are not included) will pay a flat £925 per international student. The government expects the levy to raise around £445m annually, but its own modelling also predicts that the country could lose as many as 14,000 international students.

Although the proceeds of the levy will help fund maintenance grants for UK students, the impact on universities will vary widely across the sector. The exemption for the first 220 international students may reduce disproportionate burdens on smaller or specialist institutions. But in reality, this could mean that high-fee institutions absorb the levy more easily, while others face the erosion of already fragile margins and risk deeper deficits.

All of this comes as international demand is already weakening. CAS issuances are rising again, but visa restrictions, the dependants ban and the Graduate Route cut to 18 months have driven an 18% drop in applications during peak recruitment months. With concerns that this new levy could be passed on to international students in the form of higher fees or reduced investment in their study abroad experience, the demand could fall further.

For higher-ed marketers, the message is clear: international recruitment will become more competitive and more dependent on clear value communication. But the situation is far from bleak. Universities that double down on transparent value, differentiated storytelling, and stronger support throughout the applicant journey will be best positioned to weather policy uncertainty and outcompete rivals abroad.

This is also where data-driven, student-centred recruitment strategies become essential. Universities can mitigate the impact of the levy by targeting emerging markets, using real-time behavioural data and building proactive pipelines.

A key change for universities is the long-trailed rise in tuition fee caps: up to £9,790 in 2026/27 and £10,050 in 2027/28. It’s the first significant uplift since 2017 and offers institutions some breathing room after years of frozen fees and rising costs. Beyond 2028, increases will be tied to TEF performance, linking institutional quality ratings directly to income for the first time.

For students, however, affordability continues to tighten. Maintenance loans will rise only in line with projected inflation, not actual inflation, continuing a pattern where increases lag behind real living costs. More noticeably, the government will freeze the Plan 2 student loan repayment threshold at £29,385 until 2030. This effectively raises monthly repayments year-on-year — a stealth graduate tax that hits recent graduates hardest, especially those earning just above the threshold.

Postgraduate borrowers fare no better: their £21,000 repayment threshold has been frozen since 2016, meaning many are repaying on significantly lower real incomes than policymakers intended.

For UK universities, these changes may ease some short-term pressures. For students, it will sharpen their focus on ROI and the value of a degree.

The return of maintenance grants marks a symbolic shift back toward supporting disadvantaged students. From 2028/29, eligible learners on priority subjects will receive between £500 and £1,000 on top of their maintenance loan. It’s welcome, but limited: grants apply only to subjects aligned with Skills England priorities.

Some other meaningful improvements target groups who have been historically overlooked. Care leavers, for instance, will automatically receive the maximum maintenance loan at any age, fixing an anomaly that previously penalised those entering university later in life.

A new benchmark report from Conductor offers one of the clearest snapshots yet of how much website traffic comes from AI answer engines, and what it means for marketers.

AI referrals account for just 1.08% of all website traffic across major industries. But nearly all of that (87%) comes from one source: ChatGPT.

Key findings from the report:

ChatGPT dominates AI referral traffic, far outpacing Perplexity, Gemini, and Copilot.
AI referrals are growing ~1% month over month.
Traditional organic search remains the real driver, commanding 30–40%+ of traffic in most categories.

Why this matters for university marketers

Even though AI referrals are still small, they’re becoming a distinct performance channel and ranking well on Google no longer guarantees that your institution appears in AI-generated answers. That means:

Being visible in ChatGPT’s citations and summaries is becoming as important as ranking in Google search.
Many AI tools cite different domains than Google, often prioritising clear authority, depth, and trust indicators.
For YMYL-style queries (e.g., financial aid, student visas, mental health), AI heavily favours authoritative sources. This is a signal for institutions to improve content clarity, expertise, and trust signals.

Conductor also found that 25% of Google searches now trigger an AI Overview, which often cites blogs, articles, videos, news, product/landing pages.

The bottom line is: Organic search remains king, but AI answer engines are quickly shaping what prospective students see first. Institutions that invest early in AI visibility, entity optimisation, and authoritative content will gain an advantage as AI referrals grow from a trickle into a meaningful channel.

President Trump unexpectedly praised the economic value of international students during a Fox News interview recently, even though his own policies are driving steep drops in new enrolments in the U.S.

Pressed by host Laura Ingraham on why he won’t curb enrolment from countries like China, Trump argued that cutting international students would “destroy our entire university and college system,” claiming colleges would “go out of business” without them. He framed international students as an economic engine, saying they “pay more than double” and bring “trillions of dollars” into the U.S. (the real number is about $50 billion a year, according to Open Doors).

But Trump’s defence of international students sits in stark contrast to the current reality of international student enrolment in the U.S.:

New international student enrolment in the U.S. fell 17% this year, the largest non-pandemic drop in more than a decade.
Visa delays, denials and cancellations have skyrocketed—96% of institutions cite visa challenges as the top reason students aren’t enrolling.
Students report feeling unwelcome in the U.S. amid heightened political scrutiny, deportations tied to campus protests, and the administration’s aggressive vetting.

International student totals remain high overall (up 5% last year). Still, the pipeline of new students is shrinking quickly, raising concerns about what fall 2026 and 2027 may look like if current trends continue.

Reddit has launched new Interactive ads, letting brands create mini-games, quizzes, dynamic reveals and other engaging formats directly in the feed. These formats stand out far more than static or video ads and should boost engagement if the creative fits Reddit’s culture, where ad tolerance can be low. With 116M daily users and a strong influence on AI search answers, this could give university marketers a fun and fresh option for reaching prospective students in high-interest communities.

Google has introduced a new “Original Conversion Value” column that strips out all Google-applied adjustments (value rules, lifecycle goals, etc.) so advertisers can finally see the real, unaltered revenue their campaigns generate. This means clearer ROAS, easier troubleshooting when Smart Bidding inflates numbers, and more accurate post-campaign analysis. It’s a small update, but one that provides long-needed transparency into what your ads are actually producing.

Google is launching two new Gemini-powered assistants: Ads Advisor and Analytics Advisor, designed to simplify campaign optimisation and analytics. Ads Advisor offers proactive recommendations (e.g., new keywords, sitelinks, PMax tweaks) based on your account data, while Analytics Advisor lets you ask natural-language questions about site performance without digging through GA4 reports. These tools could streamline daily work and surface optimisation opportunities faster.

Insights