Australia’s cap on foreign students could cost economy US$2.8 billion, universities warn

Australian universities have warned of mass job losses if the government moves too quickly to impose caps on international student numbers, with one industry body calling the proposed policy an unprecedented “ministerial overreach.”

The Australian government is currently holding consultations over a plan to cap the number of international students that domestic universities can accept. The policy is intended to address community concerns over high post-Covid migration numbers which are aggravating a national housing shortage, as well as some questions over the quality of service provided by Australia’s tertiary institutions.

However, in a fiery Senate hearing into the new laws, Universities Australia Chief Executive Officer Luke Sheehy said the policy could lead to 14,000 job losses in the sector and cost the economy as much as A$4.3 billion ($2.8 billion).

“The sector is our second biggest export behind mining – worth almost A$50 billion to our economy and supporting around 250,000 jobs,” Sheehy said in a statement to the committee in Canberra on Tuesday. “No other major export industry is treated the way international education is right now.”

The government initially announced plans to cap international students numbers in the 2024 federal budget, which came after months of efforts by then-Home Affairs Minister Clare O’Neil to rein in fraud related to short-term and student visas.

In July, Australia announced it would be ramping up visa application fees for international students by 125 per cent, bringing the total cost to A$1,600 per application.