The Australian higher education sector has raised concerns about the Federal Government's proposed cap on international student enrolments, warning of potential economic repercussions that may exceed initial estimates.
Unintended consequences
The cap is awaiting Senate approval, but the higher education lobby is calling for a reconsideration of the policy’s economic impact.
Set to limit enrolments to 270,000 places by 2025, the cap is intended to stabilise the sector post-pandemic but the sector contends that it will have unintended consequences.
Representatives from major urban universities, including the Group of Eight, which includes institutions such as the University of Sydney, the Australian National University and Monash University, have voiced fears that the cap could result in actual enrolments falling below the intended limit.
This shortfall could occur as international students, deterred by restricted access to our more prestigious institutions, decide to decamp to other countries to study rather than relocate to regional universities with more generous caps.
Key export
The economic implications of such a scenario are substantial. The international education sector is a major contributor to Australia's economy, valued at A$48 billion in 2023.
Education is one of the country’s largest export industries, comparable to the value of coal and iron ore exports.
This revenue includes tuition fees and living expenses, which significantly support local economies and contribute to the broader national economy.
Sector experts, including Andrew Norton from the Australian National University (ANU), have cautioned that the caps could lead to "stranded" places, where allocated student spots remain unfilled due to misaligned demand.
This misallocation could force universities to adopt conservative enrolment strategies, potentially damaging Australia's reputation as a destination for international students.
Moreover, university leaders warn of broader economic risks. The potential decline in international student numbers could undermine the financial viability of universities, leading to reduced teaching quality and research output.
Such a decline could, in turn, impact the skill level of the Australian workforce and overall productivity, further exacerbating the economic fallout.
University of Melbourne Vice-Chancellor Duncan Maskell has criticised the government's approach, arguing that the focus on capping student numbers overlooks critical issues like adequate funding for teaching and research.
He warned that without addressing these fundamental concerns, the cap could do more harm than good to Australia’s future prosperity.