Universities warn about ‘perverse unintended consequences’ of rushed student caps

Universities have outlined the ‘perverse unintended consequences’ of the formula used by Labor to determine international students caps, including fewer nurses in public hospitals and the axing of study help for domestic students.

Western Sydney University vice-chancellor George Williams. Picture: Jane Dempster

Universities have outlined the “perverse unintended consequences” of the “arbitrary” formula used by the Albanese government to determine international students caps at each institution, including fewer nurses in public hospitals and the axing of food banks and study help for domestic students.

Australian Catholic University, the largest educator of teachers and nurses in the country, told the Senate hearing on the Education Services for Overseas Students Bill, its cap meant a 55 per cent reduction in international student commencements between 2024 and 2025, with pro vice-chancellor Christopher Riley saying the universities had been “punished without cause”.

Alec Webb, who represents seven regional universities, said foreign universities no longer wanted to partner with Australian institutions for student exchanges “because of the uncertainty that has accompanied this process ever since it has been announced”.

“(It’s) absolutely horrendous what we’re seeing,” the Regional Universities Network CEO said.

Sixty-year-old private provider the Holmes Institute said its business would be “decimated” and it would be required to make 100 staff redundant and close campuses possibly before the end of the year as a result of the cap.

Deakin University vice-chancellor Iain Martin. Picture: Alan Barber

Education Minister Jason Clare. Picture: Martin Ollman / NewsWire

“I’ll probably have to make 100 staff redundant and probably before Christmas. We just won’t have enough work for people next year. And there’s no warning. No warning at all,” he said.

He said the sector did not need to rush caps through because “the market is collapsing anyway” with a crackdown on visa issuance.

The Education Department said 20 private providers were given zero international student enrolments for 2025 because they were dormant or were new entrants to the market.

University heads warned the formula used by the Albanese government to come up with the caps had “artificially punished certain universities”.

Western Sydney University vice-chancellor George Williams said it would create a “number of perverse and unintended consequences” including its effect on “vital programs” offered to domestic students such as a food pantry and study help on the international student dime.

Universities would also need to market to higher-paying students, thereby losing diversity, and there could be poaching practices such as through scholarships, which would affect the more vulnerable universities.

Regional Universities Network chief executive Alec Webb.

All public universities at the hearing – including Deakin, the University of Technology and Western Sydney University – said enrolment limits should be scrapped and the government should start again.

They also urged the government to scrap Ministerial Direction 107, which allows Home Affairs to reject student visa applications deemed to be high-risk, immediately, and said its continuation meant universities might not be able to make their allocated international limits.

As a result of the direction, Wollongong University’s applications were down 46 per cent on this time last year, the committee heard.

“It needs to be revoked or replaced today,” Mr Webb said.

Representatives for Home Affairs said the government would consider removing the direction if the legislation passes but there was no time frame or indication of what would replace it.