It compares the situation to the 5% fall in higher education earnings in Australia in 2010-11, after visa restrictions were tightened there—widely credited as kicking off the country’s enrolment downturn.

“Such a change [in the UK] would not be easily reversed and, as seen in other higher education systems, the effects can endure across several academic years,” states the report.

“This could put the UK’s strong position within the global education market at risk”

“This could put the UK’s strong position within the global education market at risk and lead to a reduction in exports.”

The government has introduced a range of student visa curbs since 2011 designed to lower net migration by cracking down on bogus applicants and colleges.

Measures include tougher English language requirements for Tier 4 visa holders, more robust university compliance checks, the removal of the post-study work visa, and the rollout of face to face “student credibility” interviews in 2013.

As a result, the total number of students staying in the UK for over a year has continued to fall, sliding by some 22% in the year to September 2012. While private and public language and FE sectors have suffered most, universities may now be feeling the pinch, too.

The report claims that while non-European Union enrolment rose by 1.5% in 2013, first-year numbers fell, particularly from Saudi Arabia, India and Pakistan. With non-EU students accounting for around 35% of total HE course fees in 2010-11, the financial risk is clear.

“Vince Cable might not want to control immigration but the public overwhelmingly do”

Vince Cable, the business secretary and member of the Liberal Democrats, criticised his government’s stance on international students last week. He warned that international students were getting caught up in a “torrid and emotional” argument about lowering immigration.

“When the numbers decline, this is a great triumph for immigration control, which is quite absurd and, unfortunately, is seriously distorting the debate on sensible university policy and, indeed, sensible immigration policy,” he said.

However, Sir Andrew Green of Migration Watch, a right leaning think tank, said that Mr Cable was “completely out of touch”. “Vince Cable might not want to control immigration but the public overwhelmingly do,” he said.