Australia’s international student cap has been called ‘chaotic’ and ‘populist’ – so how would it work?

<span>The university campus of UNSW in Sydney. The government has announced new legislation to allow the education minister to set a maximum number of new international student enrolments providers can offer.</span><span>Photograph: Lico2020/Getty Images/iStockphoto</span>
The university campus of UNSW in Sydney. The government has announced new legislation to allow the education minister to set a maximum number of new international student enrolments providers can offer.Photograph: Lico2020/Getty Images/iStockphoto

The Albanese government will create powers to cap international student numbers at universities and in the vocational education and training sector.

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The measures have been blasted by the VET sector as a “chaotic” policy, seeking to dictate where and what students can study and driven by “short-term populism” on migration.

But how would such a cap work – and what will the impact to the tertiary education sector be?

How did it work previously?

The number of students coming to Australia is determined by the courses offered by education providers and demand for those by students, not by Australia’s skills needs or by a target or cap on the number of arrivals.

Student visas are subject to rules on English language skills and minimum financial requirements, to ensure students can support themselves.

After the migration review was released in December, the government tightened these requirements, including stronger English-language requirements and plans to create a new genuine student test to crack down on those looking to come to Australia primarily to work rather than study.

What impact have the measures had?

Although the measures have increased the rate of student visa application rejections, international student arrivals and the overall number of temporary entrants to Australia remain high.

The latest home affairs data shows that the proportion of offshore student visa applications being refused has reached a record high, with as many as one in five students having their visas rejected in the year to March.

But while the flow of students is slowing, the number of international students studying in Australia still sat in excess of 700,000 as of the end of February, exceeding pre-pandemic levels.

What is the proposed cap?

On Saturday the government announced new legislation to allow the education minister to set a maximum number of new international student enrolments education providers can offer.

A similar cap set by or on advice from the skills and training minister will operate for the VET sector.

These will limit the number of international students that can be enrolled over a particular period of time.

If universities want more international students, they will be required to establish additional purpose-built student accommodation for both international and domestic students.

How will it be set?

According to the draft international education and skills strategic framework, the government will be able to set limits on enrolments at a provider level, including within specific courses or locations. While legislation will be introduced to parliament this week, the policy won’t be implemented until 1 January 2025.

The caps will be set in consultation with “individual universities” but for VET providers the government “will consult with the sector on a mechanism to distribute VET international student enrolments”.

Factors considered in setting the cap will include supply of student accommodation by the uni and the contribution of enrolments to meeting Australia’s skills needs, such as health and education.

The government will make schools and postgraduate research enrolments exempt from the caps, and consider excluding short courses, non-packaged short English courses, and non-award courses.

Who will this most affect?

The caps will probably affect VET providers who authorities believe are not offering quality courses or whose admissions undermine the integrity of the migration system, as well as universities who accept high numbers of international students.

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According to the framework, the government “is mindful of the disproportionate impacts that managing the system to deliver sustainable growth may have on key student cohorts such as those from China and India”.

It also noted that the “overwhelming majority” of onshore international students studied in Sydney, Melbourne and Brisbane, which was creating pressures on accommodation, transport and other infrastructure.

Will there be compensation for universities?

The framework says there will be “transitional arrangements that support the sector to manage this change effectively”, which might suggest extra funding for those hardest hit.

On Monday the finance minister said the budget “will have a focus on universities” and “obviously we need a strong and viable university system and VET system”.

What does the VET sector say?

A spokesperson for the Independent Tertiary Education Council Australia (Iteca) said although there were positives to the approach, the draft framework “sets out a policy direction driven by short-term populism over concerns about overseas migration and tenuous links between the cost of housing in urban centres”.

“[The approach] seeks to tell independent tertiary education institutions what they should and shouldn’t offer international students. For international students, the Australian government’s approach is even more profound as it suggests that the government tell students what they will study and where,” Iteca said.

“On balance, Iteca members believe the framework is a collection of ordinary policy options lumped together with a series of bad ones. It reflects a chaotic approach to international education, where there is little relationship between tertiary education reform, the migration strategy, and a nonexistent population strategy.”

Iteca said the strategy would cost jobs across the sector.

What do universities say?

Universities Australia, the peak body for the tertiary sector, said “certainty, stability and growth” were needed in future policy. It said international education contributed $48bn to the economy last year – more than half of Australia’s economic growth.

“Decades of careful and strategic work by universities and the government has seen Australia grow to be a leading provider of international education,” the CEO, Luke Sheehy, said. “We can’t let this work go to waste.

“We will be working closely with the government to co-design the policy settings needed to give the international education sector a strong and sustainable footing from which to grow into the future.”

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The chief executive of the Group of Eight, Vicki Thomson, said the body strongly supported measures to improve quality and integrity in the international education sector although “any mix of policy settings must be considered, and nuanced”.

The Go8 universities educate one in three of Australia’s international students and are heavily reliant on their revenue – at the University of Sydney, international students account for more than 40% of revenue.

Thomson said the consultation process would be “crucial” to seek the right balance.

“If the problems are neither simple nor one-dimensional then the solutions won’t be either,” she said.

“Go8 universities and purpose-built student accommodation providers are already investing heavily in affordable student accommodation options.

“Our member universities either provide or facilitate access to accommodation that caters for over 83,000 students and we have a substantial forward plan of additional supply across the next decade.”

Phil Honeywood, the chief executive of the International Education Association of Australia, said the notion universities could “conjure up” thousands of accommodation beds for international students was “seriously flawed” and put undue pressure on providers when international students accounted for 4% of the rental market.