Australia has announced a new cap of 270,000 on international student commencements starting next year, favoring publicly funded universities and limiting opportunities for providers with a high ratio of international students. The education sector has criticized the move, calling it a “handbrake” on growth.

Under the new national planning level for 2025, Australia will restrict new international student commencements to 270,000, differentiating between higher education and vocational education and training (VET) sectors. Publicly funded universities will be allocated 145,000 commencements, mirroring 2023 levels, while private universities and non-university higher education providers will see allocations return to approximately 2019 levels, capped at around 30,000.

VET providers will face a limit of 95,000 new international student commencements. The government has indicated that institutions with a higher proportion of international students will receive a lower allocation, encouraging them to diversify their student body. However, students enrolled in stand-alone English language courses will not be affected by this cap.

The government has clarified that a “new” commencement is defined as the first time a student starts a course with a provider. Notably, if a student switches courses within the same institution, it does not count as a new enrolment. Nevertheless, the “Genuine Student Test” will now be required to prevent “course-hopping,” where students continuously switch providers to extend their stay in Australia.

The education sector has criticized the cap as unfair, particularly for private universities and VET providers that rely heavily on international students. David Lloyd, Chair of Universities Australia, argued that the cap could slow down the growth of Australia’s $48 billion international education industry. “We understand the government’s right to regulate migration, but it should not come at the expense of a sector so vital to our economy,” Lloyd stated.

The Group of Eight, representing Australia’s leading universities, also voiced opposition, stating that the cap lacks economic justification. “There has been no economic modeling on the impact of these caps,” said Vicki Thomson, CEO of the Group of Eight. “This policy is flawed and erodes trust in the sector’s ability to manage this crucial $48 billion export industry.”

Students exempt from the cap include school students, postgraduate research students, those in stand-alone English language courses (ELICOS), non-award students, government-sponsored scholars, those in transnational education or twinning arrangements, key partner foreign government scholarship holders, and students from the Pacific and Timor-Leste.

Ian Aird, CEO of English Australia, also expressed concerns, urging the government to reconsider the policy’s impact on visa processing, fees, and the sector’s growth. “This bill seems hastily prepared, with little consultation or consideration for the economic fallout and job losses it could cause,” Aird said. “While the bill claims to address quality and integrity, it may instead deter investment in high-quality education and drive away quality students.”

The new cap will take effect from January 1, 2025, pending the passage of the Education Services for Overseas Students Amendment Bill 2024 (ESOS Bill). It is intended to replace Ministerial Direction 107, as part of the government’s plan to manage international education growth more sustainably.

Keri Ramirez, Managing Director of Studymove, emphasized the need for clarity on what constitutes a “new student commencement.” He pointed out discrepancies in government statistics, with 207,522 higher education student commencements versus 152,511 new student arrivals recorded in 2023. “It’s important to define the metrics clearly for the proposed limits,” Ramirez noted.

The cap announcement follows a significant rise in the number of international students extending their stay in Australia by obtaining second or subsequent student visas, which increased by over 30% to more than 150,000 in 2022-23. The Migration Review indicated that the VET sector has seen the most considerable growth in “visa hopping,” with 69,000 students shifting or continuing their studies in VET programs in 2022-23, compared to 42,000 pre-pandemic in 2018-19.