The amount universities in Scotland get from the block grant has not matched inflation across time, meaning universities have had to look to international students and other areas to grow income.
The report states that this “growing dependence creates vulnerability”, however, universities have long used income from non-publicly funded teaching, along with commercial income, to offset shortfalls.
The warning now is that the proportion of funding coming from international students will not continue to grow and cannot be solely relied upon to keep universities afloat.
Some universities rely on international students more than others – with as many as 46% of those at St Andrews and 36% of students at the University of Glasgow coming from abroad, according to recent HESA figures.
International student figures in Scotland have fallen for two years in a row, with a 5% drop most recently.
The decline in those from the EU was steeper, with a 22% drop in 24/25 academic year.
The largest cohort of international students in Scotland come from China.