The proposed caps on international students in Australia could affect employment and revenue. Learn about the implications of recent changes to immigration policy and why caps might be problematic.

Nine modifications have recently been made to Australia’s student migration regulations, and a bill to cap the number of overseas students admitted beginning in 2019 has been suggested. The contentious bill, which seeks to restrict the number of foreign students in Australia, will be examined this week by a Senate investigation.

According to research colleges have commissioned, these limitations may result in significant income losses and employment losses, as well as wider economic consequences. A recent paper makes the case that the cap has other drawbacks.

The additional limitations will exacerbate recent changes to immigration laws that have already affected the number of overseas students enrolling. It would be prudenter to determine whether the recent changes are enough to return student numbers to desired levels rather than imposing caps at this time.

Current Changes Affecting Foreign Students

The government encouraged more international students till the end of 2023. It resolved a backlog of student visa applications in 2022 and 2023 and, if they met certain requirements, prolonged the stay of overseas students by an extra two years after graduation.

Following the pandemic, these initiatives successfully brought back international education. 58,000 more people held resident student visas by May 2024 (including their families) than at the peak before the pandemic. There were 887,000 temporary graduate visa holders in addition to students.

But by late 2023, the government had taken action to restrict the rise of international schooling due to soaring rents and a shortage of available housing. Then, with effect from January 1, 2025, the government proposed capping the number of overseas students and made many adjustments to immigration policy. These caps would eventually apply to students who are already enrolled in classes.

The Law That Is Being Proposed and Its Consequences

The education minister will have the authority to place restrictions on foreign students according to course type, campus location, and educational provider if the bill is passed. More than 1,500 educational institutions in a variety of fields, including universities, language schools, vocational schools, and schools, will be impacted by this. There are no plans to limit the number of students pursuing research degrees or attending school. The non-school education providers in Sydney, Melbourne, and Brisbane—cities that are well-liked by international students—will be the main focus of the study.

Reasons Opposed to the Caps

By imposing the limitations, the government hopes to divert students from popular programs like business degrees and into fields like health and education that are more suited to fill Australia’s skills gaps. This strategy is ineffective, though, as less than 20% of overseas students end up relocating permanently to Australia.

Furthermore, it’s possible that the migration and education systems won’t be ready to put in place a capping regime in less than six months. Concerns have been raised by a number of government organizations over their capacity to properly administer the new policy.

Recent Modifications to Policy

Australia’s student migration scheme has undergone substantial modifications in the last year. With the potential for a tenth modification later in 2024, the government has updated nine significant policies impacting overseas students since 2023. Higher English proficiency standards, more stringent financial support requirements, and stronger guidelines to stop students from working instead of studying are some of these modifications.

Additionally, the cost of applying for a visa has more than quadrupled to A$1,600, which may cause students to choose other nations. Reduced time limits for former students in Australia and limitations on temporary graduate visas for individuals over 35 are two other adjustments.

Evaluating the Effect

Certain policy modifications, such the increased fees for applying for visas, are too recent to be shown in the visa data that is currently available. With the exception of the pandemic years, early 2024 data, however, reveals sharp declines in visa grants for vocational education, with levels reaching their lowest point since 2005. While visa grants are still lower than before the pandemic, higher education has remained more constant.

Before enacting additional caps, the government ought to assess the results of the current policies in light of these recent changes and the projected return to normalcy in 2025. A clearer picture would result from announcing target visa levels for student visas and determining if existing trends are in line with these aims. Caps could then be reevaluated if needed. Applying the limitations too soon could cause more harm than good to prospective students and educational institutions.