International student numbers in Australia will be controlled by a new informal cap. Here’s how it will work

The federal government has found a new way to manage the number of international students in Australia.

It has instructed immigration officials^[1] to prioritise student visa applications for all institutions, until they near the individual caps the government proposed for them earlier this year.

This will work as an informal cap, after the Coalition and Greens blocked Labor’s attempt^[2] to pass an international student caps bill in November.

How will this work and what does the change mean for international students, universities, private colleges and TAFEs?

Read more: The Coalition will block the student caps bill. Brace yourself for more uncertainty over international students^[3]

What is being proposed?

The government has made the change via a ministerial direction. This is an official instruction from a minister to a public body or organisation. For immigration, this means the minister can instruct decision makers on what to consider when processing on a visa application.

Under this ministerial direction^[4], officials will manage student visa applications using a “prioritisation threshold”. This means officials will prioritise new student visa applications for all higher education and vocational training providers up to 80% of their international student allocations^[5] for 2025.

These allocations were set by the government in August, on the thinking legislation to enable their implementation would be approved by parliament before the end of the year.

This week’s new ministerial direction replaces an unpopular one made in December 2023^[6], which instructed officials to prioritise applications for students wanting to go to “lower risk” institutions.

Under the outgoing system – heavily criticised by the university sector^[7] – prospective students at regional universities and small providers were more likely to experience delays or have their visa applications refused.

The government says the new approach will manage international student numbers in a “fairer way”, particularly for regional and outer metropolitan universities and TAFEs.

For the university sector, it also provides some much-needed certainty about their ability to enrol international students. Peak body Universities Australia described it^[8] as a “commonsense decision”.

The caps are part of a bigger immigration issue

The Albanese government has been trying to introduce caps on international students because of a big increase in net overseas migration. This is the change in the number of citizens and migrants living in Australia.

Net overseas migration increased much more quickly than the Australian government expected after international borders reopened in 2021. A 2023 review of Australia’s immigration regime also found the number of temporary migrants^[9] had swollen. International students were a big part of that increase.

To exert greater control over the numbers of international students, during the past year, the government has been introducing a raft of changes^[10].

This includes higher English language requirements for students^[11] and doubling visa application^[12] fees to $A1,600.

Post-study visas allowing international students to stay in Australia after finishing their course were also reduced^[13].

The proposed international student caps^[14] were the most recent part of these changes.

Unlike other parts of the migration program^[15], international student visas have not normally been limited. So the proposed student caps bring international education more in line with other parts of the program.

We’re already seeing fewer international students arrive

Recent data shows net overseas migration^[16] is not falling fast enough^[17] to meet government targets.

There are, however, signs the various “go slow” approaches are working, at least with international students. The number of international students arriving in Australia is beginning to trend downwards.

It’s important to note the government is not necessarily seeking to cut the overall number of international students studying in Australia. Instead, it wants to limit the rate of growth to pre-pandemic levels.

Why does this matter so much?

The Australian Bureau of Statistics estimates^[18] international education contributes $51 billion to the Australian economy. As part of this, higher education institutions receive almost $16 billion in tuition fees from international students.

That means overall international student revenue is rivalling the amount universities receive from the government for domestic students.

So the size of the sector, and its growth, makes it one of the biggest issues in tertiary education.

Watch out for more changes

The new ministerial direction suggests the government’s current priority is to gain control over the number of international students, while minimising the impact on the sector.

But ministerial directions that alter processing times have proven to be a blunt instrument^[19] when it comes to managing international student visas – as some regional universities discovered this year.

This means a longer-term solution, like legislative changes, may still be needed.

Meanwhile, next year’s federal election, and Labor and the Coaltion’s moves^[20] to make migration a key issue^[21], mean Australia’s international education sector faces more uncertainty in 2025.

References

1. ^{^} instructed immigration officials (immi.homeaffairs.gov.au)
2. ^{^} Coalition and Greens blocked Labor’s attempt (theconversation.com)
3. ^{^} The Coalition will block the student caps bill. Brace yourself for more uncertainty over international students (theconversation.com)
4. ^{^} this ministerial direction (ministers.education.gov.au)
5. ^{^} their international student allocations (theconversation.com)
6. ^{^} one made in December 2023 (www.abc.net.au)
7. ^{^} heavily criticised by the university sector (www.abc.net.au)
8. ^{^} Universities Australia described it (universitiesaustralia.edu.au)
9. ^{^} the number of temporary migrants (www.homeaffairs.gov.au)
10. ^{^} introducing a raft of changes (theconversation.com)
11. ^{^} English language requirements for students (www.studyaustralia.gov.au)
12. ^{^} doubling visa application (theconversation.com)
13. ^{^} were also reduced (www.education.gov.au)
14. ^{^} proposed international student caps (theconversation.com)
15. ^{^} other parts of the migration program (immi.homeaffairs.gov.au)
16. ^{^} net overseas migration (www.abs.gov.au)
17. ^{^} not falling fast enough (www.abc.net.au)
18. ^{^} Australian Bureau of Statistics estimates (www.abs.gov.au)
19. ^{^} blunt instrument (www.theguardian.com)
20. ^{^} Coaltion’s moves (www.abc.net.au)
21. ^{^} a key issue (sarahhenderson.com.au)