Private colleges threaten to sue federal government after student caps put International House Sydney into administration

The Albanese government’s ‘dunderheaded’ approach to slashing international student numbers had cost jobs and harmed businesses, says Independent Tertiary Education Council Australia chief executive Troy Williams.

A cap on international students is impacting private training colleges. Picture: John Feder

Private training colleges are threatening to sue the federal government for capping foreign student enrolments without legislative authority.

Independent Tertiary Education Council Australia chief executive Troy Williams said the Albanese government’s “dunderheaded’’ approach to slashing international student numbers had cost jobs.

“The costs for providers will be significant and there has been a cavalier disregard by ministers for the stress that has been placed on employees across the system whose jobs are threatened,” he said. “There are some providers talking about taking legal action against the Australian government and although that’s understandable, it’s a complex set of issues, thus it’s something we’ve urged members to approach with caution.’’

The federal Education Department has begun erasing the allocations of international students it had assigned to thousands of universities and training providers through its Provider Registration and International Student Management System. The unprecedented ministerial intervention to dictate individual companies’ enrolment of international students was made without waiting for federal parliament to pass the enabling legislation.

A leading training provider, International House Sydney Training Services (IH), was put into administration on Tuesday.

Its chief executive, Timothy Eckenfels, said he had made 25 staff redundant and been forced to refund more than $12m in fees to students who had been blocked from coming to Australia.

“Our student visa rejection rate increased from 6 per cent to 21 per cent today,’’ he said.

Opposition spokeswoman for Education, Senator Sarah Henderson, says the government’s attempts to cap international student numbers is a ‘debacle’. Picture: NewsWire / Martin Ollman

Mr Eckenfels blamed the ­losses on Ministerial Direction 107, issued by former Home ­Affairs minister Clare O’Neil at the start of the year when she ordered her department to slow the issue of student visas.

He said the government’s decision to charge applicants a non-refundable $1600 fee for student visas this year had slowed enrolments since July.

“Where we used to collect $4m to $5m in fees each month. ­August, September and October saw payments drop to around $2m per month,’’ he said. “We are in voluntary administration and trying to work through this time with our creditors and a possible investor or acquisition.”

Education Minister Jason Clare said on Tuesday that Ministerial Direction 107 would remain in force to slow the entry of international students.

“As a result, Ministerial Direction 107 is in place to manage student visa applications in an orderly fashion,’’ he said.

Federal opposition education spokeswoman Senator Sarah Henderson said the government’s attempts to cap student numbers were a “complete debacle’’.