2025 Outlook for International Students in Australia: Challenges & Hope?

TL;DR

• Australia’s international students hope for a policy shift following the Labour government’s election victory. With a strong majority and fewer opposition constraints, Prime Minister Albanese’s team has a window to rethink controversial visa caps and fee hikes that previously led to steep enrolment declines and job losses across universities. 
• Student visa fees are set to rise again to $2,000 in July, and tighter enrolment thresholds remain in place. While the proposed Australian Tertiary Education Commission (ATEC) could reshape the education landscape, its lack of representation from the international education sector raises concerns. 
• Despite the potential for reform, little progress has been made. International students still face uncertainty in what was once a top destination for global education.

Last week, in a rare example of a party overcoming anti-incumbency sentiment, Australian voters returned the Labour government of Anthony Albanese to power … and that too with a robust majority in the House of Representatives and a strengthened position in the Senate.  Labour in the 48th Parliament is in a far better position than it was in the 47th Parliament.

In the previous Parliament, the opposition Coalition under Liberal Party leader Peter Dutton was able to push the Labour government into increasingly conservative positions, particularly on the issue of visas to international students.  To the dismay of Australia’s colleges, universities, and vocational training institutes, the previous Labour government declared that it would slash the number of student visas issued.

Back in October 2024, with the Liberal-National Coalition opposition making international students, along with immigrants and refugees, scapegoats for the intensifying cost-of-living and housing shortage, the Albanese government reckoned that the choice was to either echo hard right rhetoric or risk alienating millions of working-class voters.  At that time, the Opposition blocked legislation (the ESOS Amendment Bill) to impose annual caps on international student visas because the caps were not sufficiently severe. The Labour government found a workaround in “directives”, chiefly Ministerial Directive 111, which was supposedly designed to block “high-risk” students coming to live in Australia.

 Under this directive, the government more than doubled non-refundable student visa application fees from $710 to $1,600—the highest in the world—slowed visa processing, and imposed harsher English language requirements and “genuine student” tests.  The measures sent international student arrival numbers into a nosedive, which in turn resulted in thousands of job cuts in universities and private education colleges.

Even without Directive 111, the country’s tertiary education sector was struggling.  Years of funding cuts by successive Labor and Coalition governments drove institutions to ever-greater reliance on international students’ fees. Educators traced the crisis back to the education “revolution” imposed by the Rudd and Gillard Labor governments of 2007 to 2013. This “revolution” created a corporate-style market, which forced universities to fight each other for full-fee-paying international students.

By December 2024, the situation was that 39 public universities were to have had their numbers slashed for 2025.  The most severe caps were imposed on those universities that had the highest numbers of Chinese students. Across the country, enrolments were to be cut overall by more than 50,000 … down to 145,000.

 It may be noted that by end-2024, international student tuition fees and the flow-on effects of student spending on housing and other services had become a $51 billion-a-year revenue earner — Australia’s largest industry after iron ore, coal, and gas.

The May 3 election results mean that – barring some drastic crisis – the Albanese government will have a free hand until 2028.  Minus Opposition pressure, the new government CAN calmly rethink and revise policies on higher education funding and visas for international students … but WILL it?

It is too early to predict what the government will do, but in the recently announced cabinet, Jason Clare retains his berth as Education Minister, which indicates that the government is not contemplating any significant new direction. 

Clare, now empowered by a more cooperative Senate, is expected to seize the opportunity to bring back the controversial ESOS Amendment Bill. Additionally, student visa fees, which are already the highest globally, will increase to $2,000 in July, marking an 181 percent hike compared to the past year.

 Throughout the campaign, Clare sang the same old song about “commitment to the integrity and sustainability of Australia’s international education sector”.  This means that the government would continue to manage international student enrolments through the National Planning Level programme, and the visa processing system prioritizes applications from institutions deemed to be operating sustainably. Under this system, universities and colleges will receive expedited visa approvals until they reach 80 percent of their designated international student quota. Once this threshold is met, visa processing will occur at a standard rate.

During its previous term, the Labour government brought out an Australian Universities Accord.  In researching the position of the present government and trying to formulate an educated guess about what may be in store for international students and Australian higher education, references to this Accord come up repeatedly.

So the Accord appears to be important BUT … 

While the government’s legislative actions and policy initiatives indicate a strong commitment to its recommendations, the Accord has NOT been legislated by Parliament, and its provisions are NOT legally binding.  At any moment, a shift in political support/public opinion could torpedo implementation of the Accord’s provisions.

 Note that the Accord itself does not propose any explicit cap or quota on international student numbers, although that discussion has occurred in parallel policy debates.  Also, the Accord proposes no direct Commonwealth support or subsidies for international students in the reforms. 

The Universities Accord and related reforms do not impose direct restrictions on international student admissions, but, if recommendations of the Accord are implemented, either as law or through the Australian Tertiary Education Commission, these recommendations would reshape the incentives and structures within which universities and Technical and Further Education institutions operate. The result would be to …

• Encourage a shift toward quality over quantity.
• Diminish reliance on international tuition revenue.
• Lead to tighter oversight of providers.

 A key element of the Universities Accord is Recommendation 30.  This envisages the creation of an independent national statutory body reporting to the Minister for Education and the Minister for Skills and Training to be called the Australian Tertiary Education Commission.  In the 2024–25 Mid-Year Economic and Fiscal Outlook (MYEFO), the government announced a commitment of $ (A) 54 million over the period from 2024–25 to 2034–35 to establish ATEC. The commission is slated to commence operations on 1 July 2025 and become fully operational by 1 January 2026.  BUT …

Announcements are cheap.  The ATEC becomes a reality when and if enabling legislation is passed.

 Legislation will also determine the actual powers of the ATEC.  Government statements indicate five powers:

1. Overseeing long-term planning for the higher education sector.
2. Advising on funding and investment across both higher education and vocational education sectors.
3. Monitoring performance and quality assurance across tertiary education providers.
4. Driving equity and access, especially for underrepresented student groups.
5. Supporting coordination between universities, government, and industry to meet national skills needs.

 IF the ATEC becomes a reality with all the powers its proposers envisage, it could …

1. Standardize or formulate policies around international student enrolments, admissions benchmarks, and provider compliance.
2. Impose a “managed growth funding model” by 2026–2027. The idea of this model is to provide predictable funding to universities based on agreed growth plans.  Stabilizing domestic revenue would make the universities less financially dependent on international student fees, potentially slowing aggressive recruitment strategies and capping international intake growth for certain institutions.
3. Introduce improved student support, academic integrity, and outcomes monitoring.  The ATEC could direct education providers to enhance admission screening, language support, and retention strategies for international students, resulting in stricter admission standards or reallocation of resources to fewer, high-quality students.
4. Regulate private and for-profit providers to eliminate questionable practices and exploitation of international students.  This might take the form of tightened licensing or admission caps for private colleges that disproportionately rely on international enrolments, thus removing international student options in the vocational and non-university sector.
5. Encourage the growth of universities/colleges in non-metropolitan and/or underserved regions.  Such a measure would definitely lead to a geographic redistribution of international students across Australia and could mean expanded opportunities for international students, especially if urban university admission caps tighten.

 Who is to run this ATEC?  As per Recommendation 30, it is to be governed by an Advisory Board comprising the Chief Commissioner as Chair, two Deputy Commissioners, the Tertiary Education Quality and Standards Agency Chief Commissioner, the Australian Research Council Board Chair, a First Nations Commissioner, an Equity Commissioner and the Regional Education Commissioner. The day-to-day administration of the ATEC would be handled by a full-time CEO.

 Through this Advisory Board, a wide range of stakeholders get a chance to present their concerns. They include representatives from tertiary education providers, all Australian provincial governments, students, staff, employers (including business and industry representatives), unions, alumni, and civil society organisations, a First Nations Council, and a Learning and Teaching Council.  The idea is to engage with learning and teaching, research, equity, regional issues, and private tertiary education providers.

 From the Universities Accord and proposal for the ATEC, we get an indication of the direction in which the new Australian government is likely to move in terms of higher education generally, but we are still no wiser about what the future holds for international students hoping to study in Australia. 

YUNO LEARNING looks at the ATEC and concludes …

Since international education contributes handsomely to the Australian economy, it would be reasonable to allow the sector a voice that is at least as audible as other identified portfolios.

BUT … 

The ATEC gives no place to representatives of the international education sector.

 If the ATEC is expanded to include representation from the international education sector, it would show that the Labour Government is indeed ready to move toward more rational measures and policies for international students.

So far, we find no reason for optimism.