UK immigration minister Damian Green has rejected calls to alter the way in which immigration data is calculated, stating that the government will be able to meets its targets without exempting UK visas for students.
Mr Green rejected the demands of 70 of the country's universities, which had requested in a letter that the government stop counting foreign students as immigrants due to the temporary nature of their residency.
He added that the new rules that have been introduced in regards to student visas are aimed at closing down "bogus" colleges and should not impact the ability of British universities to attract the "brightest and best" students from around the world.
Mr Green told the BBC News Channel: "It's always very tempting to try and meet a target by fiddling the figures. That's what you would accuse me of doing if I just redefined away the problem."
However university leaders have signed a letter suggesting that the changes to the system and the refusal to alter the way in which immigration figures are calculated mean that Britain risks losing out to its major competitors, many of which already class foreign students as temporary rather than permanent migrants.
The higher education leaders explained the financial impact of this, noting that Britain currently attracts around one in ten students who opt to study outside their home country. This generates a significant amount of income for the sector, including around £8 billion a year in tuition fees alone.
The worry now is that new restrictions regarding international students' rights to employment and other changes to the UK visa regulations could discourage people from studying in Britain and may see the country lose out on this income to other nations, such as the US, Canada and Australia.