Australia’s esteemed higher education sector may face a significant setback in global university rankings if the federal government proceeds with its proposed caps on international student enrollments, according to a recent warning from S&P Global.
The credit rating agency has raised concerns that these legislative changes could not only impact university revenue but also jeopardize their international standing.
The Australian government’s proposal to impose strict limits on the number of international students each university and vocational training institution can admit is set to take effect soon.
This move, aimed at addressing the strain on housing markets and the overall migration system, has been met with criticism from academic institutions and industry experts.
S&P Global’s report highlights that these restrictions could severely affect the financial stability of Australian universities.
“A government proposal to cap foreign enrolments could hit Australian universities hard,” the agency noted.
“This is because the country’s university sector is among the most dependent in the world on international student revenue.”
The report further elaborates that the caps would likely erode profit margins, leading to reduced funding for critical research and potentially stalling the advancement of Australian universities in global rankings.
“If enacted, the legislation would crimp operating margins, choking funding for research and halting the advance of Australian tertiary institutions up global rankings,” the report warned.
The Australian government has justified the proposed caps as a necessary measure to address the housing crisis exacerbated by an influx of international students and other migrants in recent years.
Additionally, the government is tightening regulations on visa extensions for students, known as “visa hopping,” which has reportedly surged by over 30% to 150,000 individuals in the past financial year.
Home Affairs Minister Clare O’Neil emphasized the need for these changes, stating, “The migration system we inherited was completely broken, and our goal is to build a smaller, better-planned, more strategic migration system that works for Australia.”
She added that from July, holders of visitor and temporary graduate visas will no longer be able to apply for student visas onshore, pushing international graduates to seek skilled employment and apply for permanent residency if they wish to remain in Australia.
The university sector has voiced significant concerns regarding the potential fallout from these legislative changes.
Luke Sheehy, Chief Executive of Universities Australia, warned that the proposed caps could result in a substantial loss of jobs within the sector.
“The government and opposition are openly targeting international students to neutralize a battle over migration at the next election,” Sheehy said.
He highlighted the potential economic impact, stating, “These bipartisan attacks would leave a funding shortfall that could cost as many as 4,500 jobs across the sector. That would mean more people out of work during a cost-of-living crisis, driving up unemployment and adding further pressure to the government’s budget bottom line.”
Sheehy stressed that the return of international students was crucial in preventing a near-recession situation, underscoring their importance to the Australian economy.
International students contribute significantly to the Australian economy, with their tuition fees and living expenses providing vital revenue streams for universities.
Furthermore, Australia’s higher education sector is renowned for its global research impact and quality, with many institutions consistently ranking among the top in international rankings.
The proposed caps could undermine these achievements and affect Australia’s attractiveness as a study destination.
