Experts Criticize Labor’s Plan to Cap International Student Enrollments | Australia Immigration Updates

The new bill, introduced to parliament, would empower the education minister to set a maximum number of new international student enrollments for courses and providers. Universities would need to establish new purpose-built student accommodation to enroll more students, and a similar cap would apply to the VET sector.

Why the Cap is Controversial

The number of international students in Australia has surged from about 580,000 pre-pandemic to 700,000 in February. The education minister argues that these changes aim to ensure international education delivers the greatest benefit to Australia while maintaining its social license. Labor aims to reduce net annual migration to 260,000 by 2025, largely by addressing international student numbers.

Experts criticize these plans as "unprecedented," with significant risks to the higher education sector. They argue that the cap could lead to university closures if not managed properly and significantly limit student choice and university autonomy.

Potential Impact on Universities

The proposed cap is seen as a "stopgap measure" in response to historically high net migration levels and low housing supply. If implemented, the legislation would take effect on January 1, leading to what some describe as 12 months of "chaos" as institutions rush to get applications in before the cap is enforced.

Concerns Over Ministerial Discretion

The bill allows the minister to cancel international enrollments based on systemic quality issues, courses providing limited value to Australia’s skills needs, or public interest concerns such as student exploitation. This level of ministerial discretion is described as a "new legal territory" and a significant problem beyond the direct consequences of capping.

Economic Contributions and University Reliance

International students are Australia’s most successful service export industry, contributing $48 billion to the economy in 2023. With federal investment in research and development at a 30-year low, universities have increasingly relied on international student revenue to remain viable. Group of Eight universities educate one in three international students, who account for more than 30% of revenue at institutions like the University of Sydney, Monash, UNSW, and the University of Queensland.

Looking Ahead

There are concerns that prospective students may choose other top international universities if Australia becomes less welcoming. Some experts suggest that a better policy would be to set higher cutoff scores on entrance exams to control student numbers by maintaining academic standards rather than revenue generation. The federal government is working closely with state and territory governments and education providers to help international students find housing and provide certainty for universities.