Between October 2023 and August 2024, Australia saw a dramatic 38% reduction in the number of overall study visas granted compared to the previous year. While all sectors of the education industry were affected, the Vocational Education and Training (VET) sector bore the brunt of the damage, suffering a staggering 67% reduction in study visas. English Language Intensive Courses for Overseas Students (ELICOS) experienced a 50% decline, while higher education institutions saw a 25% drop in visa approvals.
This significant downturn in study visa approvals, revealed by recent data from education data consultants, has sent shockwaves through Australia’s education sector. The data shows that the implementation of various policy changes has created uneven impacts, making it increasingly difficult for education providers to navigate the ever-shifting regulatory landscape.
A Year of Constant Change
The Australian education sector has been through a tumultuous 12 months. Policy shifts introduced by the government have left both education providers and prospective students grappling with rising costs, increased requirements, and lengthier visa application processes. Visa fees have more than doubled, financial requirements for international students have tightened, and English-language proficiency standards have become more stringent. Compounding these challenges is the reduction in post-study work rights, along with a cap on the age of graduates seeking to stay in Australia.
At the heart of this disruption is Ministerial Direction 107, introduced in December 2023. The policy imposed stricter scrutiny on offshore student visa applications, which many in the sector have criticised for its lack of clarity and fairness. The uncertainty surrounding visa approval criteria has made it increasingly difficult for education providers to attract international students. The ripple effects of these changes are expected to continue as the ESOS Bill, which includes controversial caps on international student numbers, looms on the horizon.
Disproportionate Impact on VET and ELICOS Sectors
The VET sector, which has historically been a strong performer in attracting international students, has been hardest hit. A 67% drop in study visas granted is nothing short of catastrophic for the industry, which relies heavily on international enrolments to sustain itself. ELICOS programs, often seen as a gateway for international students to enter The Australian education system, also saw a severe 50% reduction in study visa approvals.
While the higher education sector has also experienced a decline, with a 25% drop in visas, it has somewhat weathered the storm better than its VET and ELICOS counterparts. However, the situation remains bleak, as commencements for higher education in the second half of 2024 have already fallen 11% compared to the same period in 2023.
Uneven Impacts Across International Markets
The reduction in study visas has been felt unevenly across different international markets. While some countries, like Bangladesh, saw a slight increase in student visas granted (up 3%), others experienced dramatic drops. For example, the Philippines witnessed a 67% reduction, and India saw a 56% decline in student visas issued. Even traditionally strong markets for Australian education, such as China and Japan, recorded reductions of 7%.
These uneven impacts can be attributed to the range of regulatory changes implemented over the past year. Students from some countries may have found it more difficult to meet the new financial and English-language requirements, while others may have been discouraged by the rising costs of studying in Australia.
Confusion and Uncertainty: A Recipe for Decline
The constant policy shifts over the past year have created a climate of confusion and uncertainty. International students have struggled to make sense of the changing requirements, making Australia a less attractive study destination compared to other countries with more stable and predictable visa systems. As the sector grapples with these disruptions, education providers have found it increasingly difficult to market Australia’s value proposition to prospective students.
Adding to the confusion is the time lag between when new policies are introduced and when their effects are felt. For instance, although Ministerial Direction 107 was implemented in December 2023, its full impact on student visas wasn’t apparent until April or May of 2024. This delayed response makes it difficult for education providers to anticipate and adapt to policy changes, further complicating their ability to attract international students.
Financial Pressures on Institutions
As student visa approvals have plummeted, the financial implications for education providers have become increasingly dire. Many institutions, especially those in the VET and ELICOS sectors, are facing financial shortfalls as international student enrolments dwindle. To compensate, providers are being forced to raise tuition fees. In 2025, the average international student fee is forecasted to increase by 6.2%, the highest rise since 2018.
This increase in fees is part of a broader strategy by education institutions to navigate the financial challenges posed by shrinking enrolments. However, raising fees may further deter prospective international students, exacerbating the problem rather than solving it.
A Need for Strategic Recalibration
With the introduction of caps on international student numbers, the sector is facing an even more uncertain future. The caps, which are set to bring international student numbers down to 2023 levels, may force institutions to rethink their strategies for attracting and retaining students. Diversifying revenue streams, such as through online learning, offshore pathways, and study abroad programs, will likely become more important as institutions strive to meet their financial goals.
As the Australian education sector prepares for another challenging year, the question remains: how can institutions adapt to this new policy environment while maintaining their competitive edge in the global education market? One thing is clear—without significant policy corrections, the future of international education in Australia looks increasingly uncertain.
A Sector at a Crossroads
The past 12 months have been nothing short of a disaster for Australia’s international education sector. The reduction in study visas granted, coupled with rising costs and increased requirements, has left education providers scrambling to adapt. The VET and ELICOS sectors, in particular, have been disproportionately affected, with devastating drops in enrolments that threaten their long-term sustainability.
Unless the government takes swift action to correct these policy missteps, the damage to Australia’s reputation as a leading destination for international students may be irreversible. Institutions must also take proactive steps to diversify their offerings and adapt to the new reality of international education in Australia.
