It also revealed that the country's higher education is of significant economic value as U.K. higher education exports netted around £10 ($17 billion) billion in 2011-12.
Undergraduate courses saw a fall of almost a quarter in international students from the European Union. Rising tuition fees -- the maximum level charged by universities rose from £3,465 to £9000 in September 2012 -- made courses offered by the U.K. universities' European counterparts a cheaper alternative.
The number of students from Pakistan and India fell by 11 percent and 13 percent from 2011-12 to 2012-13 respectively.
An influx of international students from Hong Kong helped soften the blow. Changes to the education system in Hong Kong created a surplus of students and many sought higher education overseas.
International entrants onto postgraduate courses fell to 144,760 in 2012-13 from 150,425 in 2011-12.
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The number of postgraduate students from India and Pakistan fell by 26 percent and 20 percent from 2011-12 to 2012-13. Iran also saw a big decline of 39 percent.
This contrasts a 10 percent increase in international students entering into postgraduate study in 2013 in the U.S., according to figures from the Council for Graduate Schools. One of the main drivers of growth was a 40 per cent increase in students from India.
The dip was partly offset by the number of international students from China and Malaysia which rose 9 percent and 14 percent from 2011-12 and 2012-13 respectively.
However there are a number of benefits of a UK university education that continue to draw international students to its institutions.
"The global brand of UK higher education remains strong and attractive to international students" Dr Joanna Newman, Vice-Principal (International) at King's College London told CNBC via email.
"Some of the reasons they choose to study at our universities include the high quality of the learning, teaching and research environment and their future employment prospects upon graduation".
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