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The Australian government's announcement of a cap on international students has drawn criticism from the university sector, but how did we get here?

Australia’s international student population has boomed since the end of COVID-19 border closures. : Pexels: Serhat Turan Pexels Licence Australia’s international student population has boomed since the end of COVID-19 border closures. : Pexels: Serhat Turan Pexels Licence

The Australian government’s announcement of a cap on international students has drawn criticism from the university sector, but how did we get here?

Australia’s post-COVID international education boom has triggered a political backlash.

Since late 2023 the government has announced numerous measures to reduce international student numbers.

These include migration policies which are already in place, and enrolment caps due to apply to new students in 2025.

A big unknown is how international student enrolment caps will interact with migration policy changes.

Based on student visa applications, the international vocational education sector probably won’t have enough students to fill its capped allocation.

For higher education, as of July 2024 total student visa application numbers are similar to pre-COVID levels, but good numbers from China hide major falls in applications from India.

Due to migration obstacles, higher education institutions reliant on students from India and other migration-sensitive countries may not be able to reach their cap.

The experience in Canada, which already has international student caps, is that enrolments fall below the capped level.

The risk in Australia is that international student fee revenue will fall below pre-COVID levels, with significant consequences for jobs, student services and research activity.

What’s happened so far?

In explaining its position, the government cited the pressures of a growing population on accommodation and services.

While migration is only one factor in Australia’s housing shortage, Australia’s international student population increased significantly after COVID border closures ended in late 2021.

By July 2024, Australia’s international student population exceeded 600,000, more than double its 2021 COVID low point. Another 300,000 Australian residents are the dependants of students or former students on graduate visas.

Together these groups are more than three percent of Australia’s population.

Between October 2023 and July 2024, the government implemented nine migration policy changes to block and deter international students.

The government’s caps policy was announced in May 2024 with legislation introduced into parliament a few days later. It is stuck in a prolonged Senate inquiry and may not pass before its January 1, 2025 start date.

In August 2024 the government specified a total 2025 cap of 270,000 international students starting a course, including students across both the higher education and vocational education sectors.

Public universities will be allowed 145,000 new international students in 2025.

Their enrolment caps are equivalent to their 2019 onshore international student numbers plus a share of their growth between then and 2023. Universities with a high concentration of international students will keep less of their growth.

It’s since emerged how individual universities will be affected.

Although caps will require painful cuts to expenditure and staff at some universities, put in historical context 2019 was a good year, with nearly $10 billion in international student revenue.

How has Australia’s international education policy changed?

International students have come to Australia for over a century, but a commercial university international education industry dates from the mid-1980s.

A government decision to allow universities to recruit international students, with no controls on numbers or fees, let them tap into the growing global education market.

Subsequent policy changes made Australia a more competitive destination country for international students.

A late 1990s and early 2000s linking of international education and migration proved to be a critical turning point.

Instead of having to return home after completing their studies, international graduates with specified skills were given a path to permanent residence. This made Australia attractive to migration-focused international students.

Since the late 1990s the link between international education and migration has changed many times but never been broken entirely.

In the late 2000s, direct paths to permanent residency were partly blocked.

Under the current model, dating from 2011, international graduates can transition to temporary graduate visas which let them remain in Australia to work.

Since July 1, 2024, the temporary graduate visa for higher education graduates lasts for at least two years. They can work in any job. Vocational graduates are eligible for an 18-month visa restricted to skill shortage occupations.

Through various routes, some international graduates move to permanent residence visas.

By 2021, nearly 600,000 former international students were Australian permanent residents or citizens.

Apart from an early 2010s dip, following limits to permanent residence and well-publicised crimes committed against Indian students in Australia, only the COVID border closures caused international higher education enrolments to fall.

By 2023, vocational education enrolments had exceeded pre-COVID levels while higher education enrolments sat just below their earlier peaks.

Record numbers of higher education commencing students in 2023 and 2024 to date signalled boom times — until the government decided to put an end to them.

Why do Australian public universities want international students?

International students had good reasons to come to Australia, but Australian public universities had no obligation to accept them in large numbers.

Unlike the mostly for-profit vocational education providers happy to enrol anyone willing to pay their fees, public universities were established to meet the needs of domestic students and pursue other local objectives.

For public universities, international education is one of the few university activities with revenue exceeding costs. This has made it key to the success of Australia’s universities in the 21st century, especially in increasing research output.

In 2022, 27 percent of Australian public university enrolments were from overseas. The share is higher in some of Australia’s best-known universities.

The universities of Sydney, Melbourne and Queensland along with UNSW and the Australian National University will suffer a capping penalty for international students exceeding 37 percent of onshore enrolments in partially released 2023 enrolment figures.

In 2022, public universities earned $8.4 billion from international students, representing 24 percent of their total income.

The Australian Department of Education does not release up-to-date data on domestic enrolments.

But international students could exceed 30 percent of public university enrolments in 2024, due to booming international enrolments and soft domestic demand.

Looking ahead

It has often been said that reliance on international students was a risk for Australian universities — their success was based on an unstable financial foundation.

Australia already competes against other English-speaking countries for international students.

As source countries develop their own higher education systems, the student market will inevitably become more competitive over time.

Geopolitics is also an international education risk, especially given Australia’s often tense relationship with the Chinese government.

But as has been seen twice since 2020, first with border closures and now with enrolment caps and adverse migration policy, the main source of political danger to Australia’s international education industry is much closer to home than Beijing.

Andrew Norton is a Professor in the Practice of Higher Education Policy at The Australian National University.

His employer, The Australian National University, will like all universities suffer a loss of students and income as a result of the migration policy and capping policies discussed.

This is the first part of a two-part series by Professor Norton looking at international students caps and university funding for 360info. You can read part two here.

Originally published under Creative Commons by 360info™.

Editors Note: In the story “University challenge” sent at: 18/09/2024 15:23.

This is a corrected repeat.

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