‘It will hurt us bad’: What international student caps mean for Victoria

Victorian tertiary students could miss out on overseas study opportunities and encounter cuts to courses as fears mount the state will be “disproportionately” affected by international student caps.

Victorian tertiary students could miss out on overseas study opportunities and encounter cuts to subjects on offer if international student caps are implemented, industry leaders have warned.

In 2025, the number of international students starting courses will be set at 270,000 across both higher education and vocational education courses.

The federal government plan still needs the Senate to pass legislation to allow the government to set the enforceable caps.

But Vice-chancellors, students representatives and academic have raised concerns about the caps, while the Victorian government says the state will be “disproportionately” affected.

Which students are capped?

In 2025, only new international student commencements will be capped.

A student will be considered “new” each time they start at an education provider. If they start a different course at the same provider, they will not be counted as new.

In 2026 and beyond, the government will have the power to cap all students.

More than 212,000 international students studied at Victorian universities between January and April this year. Picture: iStock

What does it mean for Victorian unis?

More than 212,000 international students studied at Victorian universities during the January to April semester this year, with two fifths coming from India and China, according to the Australian Department of Education.

But industry leaders fear these numbers will drastically reduce if international student caps are introduced.

The proposed amendments would also allow Mr Clare to “automatically suspend and cancel” courses if provide limited value to Australia’s skills and training needs.

If these amendments were to come into force, Victorian universities fear it will have the most significant impact on Australia’s universities in decades.

How does it affect Victorian students?

Australian Catholic University – which has its Melbourne and Ballarat campuses in Victoria – said the caps would be challenging for tertiary advisers to manage, particularly at the start of the academic year when students are still finalising their courses.

Monash University vice-chancellor Sharon Pickering said domestic students would miss out on developing crucial connections with students from a diverse range of countries if caps were introduced.

Monash University vice-chancellor Sharon Pickering said domestic students would miss out on developing crucial connections. Picture: Chris Eastman

Relations with overseas universities might also be tarnished as an unintended consequence, Dr Pickering suggested, limiting Australian students’ ability to study abroad.

“I believe our domestic students need to graduate with deep experience, understanding and networks across the Indo-Pacific for them to work strongly in Australia’s national interest in the future,” she said.

How does it affect staff?

The University of Melbourne said the lack of details regarding student caps could “cause chaos” if universities were notified last minute about changes coming into effect.

The university said the legislation could limit its ability to plan appropriately and sustainably for its workforce requirements.

“University workforce and budget planning can commence as early as April/May of the year before and significant effort is required across the university to ensure that student demand can be met appropriately,” it said.

Even the state government is concerned a cap on overseas students coming to study in Victoria will impact staff numbers and research capability.

“If international student fee revenue is significantly reduced without commensurate increase in Australian government funding, this may result in localised impacts, such as increased redundancies and job losses,” it said.

“The ability of universities to adequately fund their research activities might also be impacted.”

There could also be staff cuts or reduced research capacity in the wake of the caps. Picture: iStock

What does the state government think?

Treasurer Tim Pallas said the student cap would have a disproportionate affect on Victoria.

“It’s this state’s biggest export earning industry,” Mr Pallas said.

“We pick up about 30 per cent of the nation’s international student intake and revenue, and we are rated as the number one destination for international students in this country and number five in the world.

“So yeah, it’s going to hurt us, and it will hurt us bad.”

Mr Pallas urged the government to think again, and consider Victoria’s economy, but also the reputation of the state and the country.

“The Commonwealth needs … to think about the impact this is having upon the Victorian economy, upon the Victorian reputation and upon the Australian government’s reputation as a welcoming location for international students,” he said.

“They add vitality, they add vibrancy, but they also provide a level of entrepreneurship and innovation that is massively growing this state’s economy.”

Victorian Treasurer Tim Pallas said the state would be ‘hurt bad’ by the caps. Picture: Luis Enrique Ascui

How does it affect Victoria’s economy?

Victorian public universities contribute $27.4bn to the state’s economy, analysis by SPP Consulting for the University of Melbourne and Monash University found last month.

University of Melbourne deputy vice-chancellor, global, culture and engagement Professor Michael Wesley said slashing enrolment numbers due to international caps would have a significant toll on the state’s economy, particularly on small businesses still recovering from the pandemic.

Victorian universities contribute $27.4bn to the state’s economy. Picture: iStock

“The potential loss of income from the proposed caps will place an additional burden on our federal budget, which will in turn impact our state’s budget, and our ability to fund important services and infrastructure for all students,” he said.

“Critical services like healthcare are already being cut in Victoria due to funding pressures. These proposed caps will only do more harm to our state”.

The state government also fears international caps will impact the state and country’s ability to address skills and workforce needs.

“The proposed changes are likely to have macro-economic implications that should be considered,” the Victorian government said in its submission to the senate inquiry.

“International graduates are qualified for roles in priority industry sectors and can help to address skilled workforce shortages.”

What’s next?

The Senate Inquiry is due to release its report on September 6, following two days of public hearings.

If the Coalition and Labor can agree on how to set provider caps, the legislation will pass in some form, meaning any future debate will just be about the details of the caps in 2025 and beyond.