Following months of speculation and uncertainty for the international education sector, Australia has finally announced an international student cap to take effect from 1 January 2025, subject to the passage of the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (ESOS Bill) through parliament.
Federal Education Minister Jason Clare has said that international student numbers would be capped at 270,000, with a limit of around 145,000 new international students for publicly funded universities and around 95,0000 for vocational institutions. Limits will be set for individual providers via an International Student Profile (ISP). Mr Clare said that publicly funded universities had already been provided with their indicative ISPs.
The cap will not apply to international school students, postgraduate research students, transnational education students, students undertaking standalone English-language courses, non-award students, students who hold key partner foreign government scholarships and students from the Pacific and Timor-Leste.
Mr Clare said the proposed limits, which are subject to the passage of the ESOS Bill, will mean the number of international students starting their studies in 2025 will be roughly the same as the previous year but redistributed. In effect, this means that larger metropolitan universities are likely to have fewer new international students, while smaller regional providers will have the scope to enrol more international students. However, not all regional providers will benefit. The Pie News reports the example of a regional university, Charles Sturt University, which has been allocated a cap of 1,000 international students for 2025 – just one-third of its 2019 international student numbers.
The ESOS Bill highlights that one of the considerations for the Minister of Education when setting individual university caps will be the supply of purpose-built student accommodation available to both domestic and international students.
Student Accommodation Council of Australia welcomes ‘sustainable’ cap
The Student Accommodation Council welcomed the government’s announcement that international student numbers will be limited to 270,000 for 2025, saying this sustainable number will give investors in accommodation the confidence they need to continue growing supply.
Torie Brown Executive Director of the Student Accommodation Council said:
Investors have capital ready to deploy into developing new assets, but they have been waiting to see the size of the government’s student caps. The PBSA sector is reliant on a strong, sustainable pipeline of international students to underpin the viability of future projects. International students make up 74 per cent of our residents.
Ms Brown also welcomed the Minister for Education’s focus on growing the supply of purpose-built student accommodation (PBSA) but warned state governments play a critical role in accelerating the supply of PBSA beds:
The Australian Government’s ambition to build more PBSA will only work if its state colleagues work with the sector to turbo-charge supply. The quickest way to do this by 2026 is to ensure students are taking up existing beds and incentivise further accommodation development. Ridiculously high state taxes on international investors who build PBSA continue to be a handbrake on new development. The Victorian and Queensland governments should come to the party by getting rid of these taxes on student accommodation development immediately.
However, some are concerned that student caps may unintentionally disincentivise investment in PBSA. A University of Melbourne submission to the Senate Education and Employment Legislation Committee on the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 dated July 2024 argues that:
International student caps may also perversely lead to less growth in the (generally private) PBSA sector. Building largescale PBSA takes several years from conception to completion. For a university, or private investor, to invest in PBSA it will need to be certain about what its cap will be in, for example, 5 years’ time if it does not build new accommodation, and what the cap will be if it does. As currently drafted, the Bill provides the Minister with the power to set caps, essentially with the stroke of a pen, meaning that certainty about future caps is impossible. This increases sovereign risk associated with PBSA. Thus, rather than incentivising universities and private companies to invest in student accommodation, the Bill creates so much uncertainty around future student numbers that it disincentivises investment.
In its submission to the Senate Committee, the University of Melbourne recommended that the link between additional enrolments above caps and the creation of more Purpose-Built Student Accommodation be removed, saying that “the Minister should not consider the supply or creation of more student accommodation when setting caps, given the impracticality of these measures.”
The ESOS Bill has passed through Australia’s House of Representatives and is currently being considered by the Senate. The Senate referred the provisions of the ESOS Bill to the Senate Education and Employment Committee, which was due to report by 6 September 2024, but has subsequently requested a further extension until 16 September 2024 to allow the committee time to conclude its deliberations.
