Just before the May budget , the federal government made a surprise announcement: it will
It is fair to say this plan is really worrying some Australian universities.
The sector argues cutting student numbers will see
They also warn cuts will hurt their international reputation and place in global rankings.
Given the sums involved, the introduction of caps has the potential to have the most significant impact on Australia’s tertiary education system in decades. But a major unanswered question is what the caps will be and how they will be calculated.
Remind me, what did the government announce?
- Pausing the registration of new providers and new courses
- Limiting the enrolments of overseas students by provider, course or location, over a year
- Automatically suspending and cancelling courses.
This comes as the government seeks to reduce
to pre-pandemic levels of about 260,000 people per year.
It also follows similar moves in Canada and the United Kingdom, which have introduced changes to
How did we get here?
As the Treasury explained last week, it underestimated
by 25 per cent. International students are the major cause of this.
They are now at record levels, with about 870,000 current and former international students in Australia. They make up the largest part of the temporary migrant population.
Along with pent-up demand, the Morrison government introduced policies to encourage international students to return. This included removing caps on the number of hours a student could work and allowing students to stay longer after they have finished their course.
Who is affected by this change?
So far, the focus of the impact on international student caps has been on universities. But there could be much wider impacts in the economy and community if international student numbers are capped.
One thing that is often lost in the debate is the diversity of the international education sector. Universities only make up about 40 per cent of current international student enrolments.
International students are also important parts of Australia’s workforce. The occupation with the largest number of international students is “carer and aides”. This means industries like aged care and disability support rely on an international student workforce.
In 2023, international education was also Australia’s fourth largest export valued at $48 billion. Of this, $17 billion was collected in course fees and the remaining $31 billion was spent in the broader economy.
We still need detail
During his budget speech, Treasurer Jim Chalmers focused on housing as central to how caps will be calculated.
As he told parliament: “For too long, enrolments have grown without being matched by an increase in student housing supply. We will limit how many international students can be enrolled by each university based on a formula, including how much housing they build.”
But it is not yet clear how this will happen.
One factor the government could consider here is how many domestic students are enrolled at a particular institution. This is so domestic students do not suffer from a cut that sees fewer resources where they study.
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The largest private vocational colleges enrol almost exclusively international students, usually in courses like business and hospitality. As our analysis (below) shows, of the ten largest private providers, nine were private colleges where there were few domestic students.
What happens now?
The bill has been referred to the Senate’s education committee, which is due to report on 15 August.
In many ways “too many students” is a good problem to have. It demonstrates Australia’s international education sector is strong.
But we have to watch out for unintended consequences. The diversity of the system — from elite, research universities educating both international and domestic students to private colleges largely educating international students — also needs to be taken into account.
And to adequately understand the impacts, we need more detail now from the government about how they plan to do it.
Peter Hurley is the director of Mitchell Institute at Victoria University.
Melinda Hildebrandt is a policy fellow at the Mitchell Institute of Education and Health Policy at Victoria University.
