Universities face bans for breaching foreign student caps

Universities that breach their international student caps will be automatically banned from enrolling more students for up to a year, in a dramatic intervention to force down overseas arrivals which could cost providers hundreds of millions of dollars.

The new powers, introduced by Education Minister Jason Clare in parliament on Thursday, come after the Albanese government detailed plans in its federal budget to create a four-year road map to bring in permanent migrants following opposition accusations it has lost control of the borders.

Education Minister Jason Clare has announced a series of measures to rein in the influx of international students.Credit: Martin Ollman

A range of legislative changes to boost the integrity of the tertiary education sector while slimming its size will also bar new providers from recruiting overseas students for two years and suspend those who don’t teach any foreign students in a 12-month stretch to weed out so-called “ghost colleges”.

“We have to ensure that we manage the international education industry in a way that delivers the greatest benefit to Australia, whilst maintaining its social licence from the Australian people,” Clare told parliament.

Days after the government sparked a backlash with its plan to introduce student caps from next January, university bosses are privately fuming after Clare laid out proposed laws to automatically suspend providers from recruiting more international students for that year if they go over their prescribed limits.

The suspension could restrict the institution’s ability to enrol international students in a new semester, inflicting significant financial and reputational damage.

Universities and colleges will have the number of international students they can teach capped under new legislation.Credit: Bloomberg

The bill says providers’ enrolment limits can be in relation to the whole institution or a certain number of courses, and can also be designated by institution type or geographic area.

“In setting enrolment limits, the minister for education will take into account the relevance of courses to Australia’s skills needs,” Clare said.

“An additional consideration for the minister for education when setting limits will be the supply of purpose-built student accommodation available to both domestic and international students.”

Universities Australia chief executive Luke Sheehy said aspects of the bill were “contrary to risk-based and proportionate regulation and could work against the shared goals of universities and the government”.

“The government has committed to a co-design process with the sector and we expect it to act in good faith,” Sheehy said. The government is consulting the sector on how caps would apply to providers and courses.

International Education Association of Australia head Phil Honeywood said that, in addition to Home Affairs Minister Clare O’Neil’s existing ability to suspend the registration of substandard providers, Clare’s proposed powers “make for very interventionist government oversight of our beleaguered international education sector”.

“These are unprecedented powers for any education minister,” Honeywood said.

The legislation also bans education agents from receiving commissions for onshore student transfers to prevent study being used as a backdoor to low-paid work, and strengthens cross-ownership regulation to prevent collusion between providers and agents.

Since late last year, Labor has announced several measures to drive down the numbers of foreign students entering the country as the primary lever to dampen temporary migration, with net overseas arrivals forecast to reach 395,000 this financial year – 20,000 more than forecast in December.

The budget forecasts net overseas migration will halve from 528,000 in 2022-23 to 260,000 next year, reducing further to 235,000 in 2026-27.

Opposition Leader Peter Dutton pledged to drive net overseas migration down to 160,000, which Honeywood said revealed “just how anti-international students the alternative government intends to be”.

“If elected, they would destroy hundreds of quality education providers and eliminate thousands of associated jobs,” Honeywood said.

In question time, Coalition immigration spokesman Dan Tehan questioned the credibility of the forecasts given its 2022-23 forecast was significantly exceeded, prompting Prime Minister Anthony Albanese to accuse the former government of inaction.

In Tuesday’s budget speech, Treasurer Jim Chalmers said a blowout in international student enrolments had put pressure on housing and rents, especially in cities.

With migration set to become a key battleground in next federal election, Dutton seized on a combined projection of 1.67 million people arriving over a five-year period from 2022-23 to 2026-27, linking it to a “housing emergency” under Labor.

In its budget papers, the government has revealed its aim to plan its permanent migration program over a four-year period, instead of setting a figure every year, after announcing it would reduce the number of permanent places to 185,000 in 2024-25.

Former immigration official Abul Rizvi said while it would be little more than “colour and movement” from a government under pressure to show it’s acting on migration, if Labor committed to a more structured net migration plan “that would be a big deal” which could impact the administration of major institutions such as schools, hospitals and other infrastructure.

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