The financial pressures facing universities continue to mount after the latest immigration figures showed a sharp fall in the number of international applicants wanting to study in the UK.

The Home Office’s initial figures for July found that about 15% fewer sponsored student visa applications were received last month, continuing the downward trend seen since the start of the year and following the previous government’s efforts to restrict the number of visas issued.

Between January and the end of July, the Home Office said that overall student applications were down by 16% compared with the same period in 2023.

After universities received bumper enrolments from international students in 2022 and 2023, admissions are likely to remain higher than before the Covid pandemic. But the surge in inflation in recent years has eroded the sector’s revenue from UK students, making it more reliant on the higher tuition fees received from overseas students and more vulnerable to fluctuations.

Some institutions say they are braced for a 50% fall in new international enrolments this year, especially in one-year postgraduate courses.

Since January, new regulations have barred most undergraduate and taught postgraduate students from bringing dependent family members to the UK with them. The latest Home Office figures confirm a steep drop, with 13,100 applications from dependents of students between January and July 2024 – 81% fewer than in January to July 2023.

August is the highest month for visa applications, and the Home Office has cautioned that it “will be necessary to see this peak in student applications in the autumn before we can assess the full extent of any changes this year”.

But an earlier poll of 75 institutions by the British Universities’ International Liaison Association found that nine out of 10 had received fewer international applications for this autumn compared with 2023.

New data published by the Higher Education Statistics Agency revealed that the proportion of first-class degrees awarded to undergraduates continued to fall last year, as universities in England responded to ministerial allegations of grade inflation.

The 2022-23 figures showed that 29% of undergraduate degrees were graded as first-class honours, down from 32% in 2021-22 and 36% in 2020-21, and only slightly higher than the 28% awarded in 2018-19 before the Covid pandemic brought more generous marking for affected students.

Nick Hillman, director of the Higher Education Policy Institute, said: “The change makes the top grade a little more meaningful for employers once again, even though close to one-third still get a first.

“But we’ll have to wait to see if this is a long-term trend or a shorter-term blip. It may be that the new government is less concerned by university grades and more concerned by other things, which could encourage people to take their eye off the ball.”

Meanwhile, the proportion of lower second-class degrees, or 2:2s, rose to 20%, after falling to a low of 15% in 2020-21.