SYDNEY – Australia announced on August 27 that it will limit the enrolment of new international students to 270,000 for 2025, as part of the government’s efforts to control record migration and alleviate rising home rental prices.
The decision comes after various measures were introduced since 2023 to end Covid-19-era concessions for foreign students and workers, which had allowed businesses to address local staffing shortages during border closures.
“There’s about 10 per cent more international students in our universities today than before the pandemic and about 50 per cent more in our private vocational and training providers,” said Education Minister Jason Clare during a press briefing.
The cap will limit new enrolments to 145,000 for universities—similar to 2023 levels—and 95,000 for vocational and skills-based courses. Universities will be informed of their specific caps, and some institutions have expressed concern about the potential long-term effects on Australia’s higher education sector.
Professor Duncan Maskell, vice-chancellor of the University of Melbourne, warned that the cap could have “detrimental consequences” for both universities and the broader economy. Similarly, the University of Sydney said it was assessing the likely impact but emphasized a commitment to working with the government on the issue.
Despite concerns, Moody’s Ratings expects the impact of the cap on Australian universities to be modest. Vice-president John Manning noted that for larger universities, the credit impact would likely be neutral, although growth in international enrolments would be constrained over time.
The move to cap enrolments is seen as a response to public concerns over the impact of record-high migration levels on the housing market. Net immigration surged to 548,800 in the year ending September 30, 2023, driven largely by students from India, China, and the Philippines. In response, the government has already taken steps to increase visa fees for foreign students and close loopholes that allowed continuous extensions of their stay.
With an election looming within the next year, immigration and housing pressures are expected to be key battlegrounds for the government.