Australia’s proposed caps on international students – what led us here?
Australia, long recognised as the pioneer in international education, is grappling with proposals to limit the enrolment of new international students through individual caps for every provider (some 1400+ institutions across public, private, higher education and vocational training) – collectively reducing new student enrolments back to below pre-COVID levels.
Australia is not alone in this situation – on 18th September, Canada also imposed further limitations on the number of new student enrolments for 2025, setting them even lower than the already stringent caps for 2024.
Meanwhile, the new UK Government has confirmed extension of post-study work rights and emphasised the importance of international students in an effort to regain momentum after significant changes to the dependency which came into effect earlier in 2024 reduced demand.
What led Australia to this self-destructive approach, deliberately constraining its largest services export industry that, in 2023, contributed A$48bn (US$31bn) to the Australian economy? And what’s going to happen next?
Net overseas migration in Australia (of which students are a significant contributor) has risen dramatically following COVID – the government has already taken significant steps to slow the flow of new international students through migration levers – notably a dramatic increase in visa application fee, significant increases in visa rejections, delays to visa processing and material increases to the living expenses which prospective students need to demonstrate through visa processes.
An important backdrop to this environment is a cost of living crisis, exacerbated by serious lack of affordable housing – and the increasing politicisation of migration.
Sub-plots include:
- the growing concentration of specific nationalities at some Australian public universities and views that student experience and outcomes are being diluted where international student populations, in some highly ranked universities, approach or exceed 50% of total students
- quality and integrity concerns where bad actors have used student visas as opportunities to traffic and exploit international students – or else wilfully provide a pseudo-work permit in the guise of an international student visa
In May 2024, Jason Clare, the Australian Minister of Education, proposed major amendments to the legislation designed to protect and support international students in Australia. Whilst many of the proposed amendments sit squarely within the “quality and integrity” arena, it is Part 7 which has provoked the most debate in Australia. In short, this section allows the two Ministers responsible for the Education and Skills portfolios to determine individual enrolment caps (separately, for new and returning students) for every one of 1400+ providers of international education in Australia. The instrument is surprisingly blunt – allowing full Ministerial discretion to determine these caps on an annual basis.
There was a perceived urgency for action here – there will be a Federal Election by May 2025 – and the opposition have long lined up migration as a major election issue. Given the southern hemisphere academic cycle, the next major intake of international students is in February 2025.
The education sector (individual providers, membership groups and peak bodies) have rallied against these proposed changes – citing challenges of implementation timescale, the damage to individual institutions, the existing reduction in student demand given other changes and the longer term damage to Australia’s economy and reputation as a welcoming destination for international students. It is equally fair to say that the self-interest of individual providers (and sub-sectors) has led in some commentary to “in-fighting” within the sector and the inevitable finger pointing of blame.
These changes, even the contentious enrolment caps, have enjoyed wide bipartisan support, with the legislation passing in the House of Representatives and now awaiting review in the Senate.
As the Senate review process has proceeded (and been twice extended), the government have progressively released more detailed information to providers on the proposed 2025 enrolment caps. This has caused substantial problems for the government – and the eventual passing of this legislation without substantial amendments can no longer be assumed a fait accompli.
Of particular concern has been the application of these proposed caps – the methodology employed across public and privately funded institutions is discriminatory – as is the methodology across higher education and vocational. The formulas applied (if legislated) will restrict some established private providers to allocations as low as single figures, whilst some universities have arguably been gifted quotas which they will struggle to fill. There is a naïve assumption that some students will change their preferred study institution based on these caps – but many in the sector argue that a student seeking a highly ranked university in a major city are more likely to choose another country than a regional university in a small city.
Against a backdrop of government criticism and secrecy, the Senate Committee have dramatically reopened the opportunity for public submissions, will conduct a further day of public hearings on 2nd October, and report back to Senate by 8th October. Getting these amendments passed by the planned date of 1st January 2025 is technically possible but operationally challenging.
At the time of writing, it is unclear whether this legislation will be written into law and what the implementation timeframes will be. It is the writer’s opinion that caps are now inevitable – but the distribution of those caps across providers is liable to be reviewed – and the pragmatic reality is that a delay to imposition of caps is therefore likely.
Two broader points remain relevant regardless of short-term outcomes. Australia’s government efforts to limit international student enrolments are harming its appeal, and rebuilding its reputation will take time. The approach of Canadian and British governments will be crucial, showing the cyclical nature of international education. We must recognise that our social license is not guaranteed and better understand, assert, and improve the contributions of our students and institutions.
By Neil Fitzroy, Managing Director of Australasia for Oxford International Education Group
Responses