Australia's Shocking Plan to Cap International Student Numbers

Australia has recently made nine changes to its student migration rules, and now there’s a proposed legislation to cap international student numbers starting next year. This week, a Senate inquiry will review the controversial measure, which aims to limit the number of international students in Australia.

Research commissioned by universities predicts that these caps could lead to substantial revenue and job losses, with broader economic repercussions. A new report argues that the cap is problematic for additional reasons.

The new caps would compound recent migration policy changes that have already impacted international student arrivals. Instead of implementing caps now, it would be more prudent to assess whether these recent changes are sufficient to bring student numbers back to desired levels.

Recent Developments for International Students

Until late 2023, the government supported increasing international student numbers. In 2022 and 2023, it cleared a backlog of student visa applications and extended the stay of international students by an additional two years post-graduation, provided they held specific qualifications.

These policies effectively revived international education after the pandemic. By May 2024, the number of resident student visa holders, including their families, reached 674,000—58,000 more than the pre-pandemic peak. The total number of students and temporary graduate visa holders was 887,000.

However, by late 2023, rising rents and reduced accommodation availability led the government to slow down international education growth. The government then introduced various migration policy changes and proposed caps on international student numbers, effective from January 1, 2025. These caps would apply to new students and eventually to those already studying.

Proposed Legislation and Its Implications

If the legislation passes, the education minister will be able to impose caps on international students based on education provider, campus location, and course type. This would affect over 1,500 education providers across various sectors, including schools, language colleges, vocational institutions, and universities. Currently, there are no plans to cap school or research degree students. The focus will be on non-school education providers in Sydney, Melbourne, and Brisbane—cities popular with international students.

Arguments Against the Caps

The government’s goal with the caps is to redirect students from popular courses, like business degrees, to areas that address Australia’s skill shortages, such as health and education. However, this approach is flawed as fewer than 20% of international students transition to permanent residency in Australia.

Moreover, the education and migration systems may not be prepared to implement such a capping regime in under six months. Several government agencies have expressed concerns about their ability to manage the new policy effectively.

Recent Policy Changes

Over the past year, Australia’s student migration system has seen significant changes. Since 2023, the government has introduced nine major policy updates affecting international students, with a potential tenth change anticipated later in 2024. These updates include higher English proficiency requirements, increased financial support criteria, and stricter policies to prevent students from working rather than studying.

Visa application fees have also more than doubled to A$1,600, which could shift student demand to other countries. Other changes include reduced time limits for former students in Australia and restrictions on temporary graduate visas for those over 35 years old.

Assessing the Impact

Some of these policy changes, such as the higher visa application fees, are too recent to be reflected in current visa data. However, early 2024 data shows significant reductions in visa grants for vocational education, with levels falling to their lowest since 2005, excluding the pandemic years. Higher education has remained more stable, though visa grants are still below pre-pandemic levels.

Given these recent developments and the anticipated return to normal patterns in 2025, the government should first evaluate the effects of current policies before introducing new caps. Announcing target visa levels for student visas and assessing whether current trends align with these targets would provide a clearer picture. If necessary, caps could then be reconsidered. Prematurely implementing the caps could inflict more harm on education providers and prospective students than necessary.