Why international student enrolments will soon fall

A superficial glance at Australia’s international student numbers reveals an industry in rude health.

The number of international student visa applications granted – a leading indicator for new enrolments – hit an all-time high 406,000 in the year to June 2019:

The number of new international student enrolments at Australia’s education institutions also hit a record high 405,000 in the year to August 2019:

Meanwhile, total international student enrolments hit a record high 846,000 in August 2019:

Whereas the Australian Bureau of Statistics this week reported that international student arrivals hit a record high 614,000 in the year to September:

Therefore, the aggregate international student data unambiguously shows an industry in the midst of an unprecedented boom.

However, there are storm clouds building on the horizon, according to Andrew Norton, Honorary fellow at the University of Melbourne:

Given enrolment and visa trends, total international student enrolments will increase in the short term. But there are many concerns about this industry, including English language standards, cheating, soft marking, Chinese political interference, university financial over-reliance on international students, labour market exploitation of students, and poor graduate outcomes.

There are also broader issues of international students driving up migration numbers, as well as questions of whether we want a large proportion of the population living with limited political and welfare rights.

Population issues contributed to a rule change to attract international students away from congested big cities to regional and minor city locations. I expect further regulatory changes and market reactions to international education issues to eventually cause a decline in numbers.

Added to the above headwinds are the following:

  • the federal government’s 30,000 reduction in the permanent migrant intake, which has reduced the probability of transitioning from a student visa to permanent resident, thereby making Australia a relatively less attractive destination for international students;
  • the Department of Home Affairs’ labelling of student visa applications from India, Nepal and Pakistan as “high-risk”, meaning they are now required to meet higher financial and English-language thresholds to study in Australia; and
  • the United Kingdom’s announced extension of post-study work rights to two-years, thus matching Australia’s and removing our competitive advantage over international students.

Given the momentum in visa applications and new enrolments, it will take some time for overall student numbers to fall. But fall they will.

Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. Can’t stop thinking that it’s going to be another case of Haynes review looking at the banks and scaring off the loan sharks. As soon as it all got too much, the flood gates were opened again. Same with the ‘stoodents’: as soon as the squealing starts, we’re off to the races again!

    • #MeToo. When migration-fuelled “GDP growth” is the only thing that counts, student visas are the biggest component of net migration, and “education” is our top-three “export” industry, we could keep the Aussie shell game afloat another decade easy. If the sub-continent is “high risk”, they’ll dragoon them from Africa, Greenland, anywhere really.

      • Jumping jack flash

        There’s many benefits to foreign students. Think of the wage theft they can facilitate!

        Hospitality will become a booming industry due to the delicious wage theft to make it competitive in the face of a debt ponzi causing an income recession.

  2. because economy will sink and unemployment rise
    Australia is super expensive for anyone to live here and not have well paid job

    in 6 post GFC years Ireland recorded 450k emigrants equivalent to 10% of its population

    • Agree, but Australia’s relative attractiveness to New Deli etc. is enormous. Better to be poor in Oz than live in a polluted slum. Not many will return.

      • people from india who come here are not poor people from slums,
        it’s expensive to come here (visa, tickets, agents, fees, …) anyone who has that much money or is able to borrow that much is not poor in india
        options are to be poor here or middle class there

        • That’s been the experience of a few Indian families we know. They could either stay here and be servants or go back home and be served. Back home for a better life they both said. Couldn’t believe it at the time. We are as blind as bats in this country, blinded by our own exceptionalism.

        • Even if this were right (which it is largely not), for each rich Indian (or Latvian or whatever, I don’t care, I’m not racist 😂) that might go back, there will be 3 poor ones to take his (yes, his, not her) place.

          And they will be invited in early because, remember, for each dude that goes back, our skills shortages get even more acute. Need to import more.

          • but those 3 poor ones cannot afford to come – they need $10k to come and that much money there makes them not poor
            Australia is too expensive for poor third world country people to come

      • I worked with a bunch of Indians who were keen to get back to Bangalore. No interest in Australia. All family connections keeping them at home

    • boomengineeringMEMBER

      Hey Doc,
      I was under the impression that the poor immigrants from India were sponsored by people traffickers who had to be paid back via the three jobs and shared beds once in Australia.

    • Jumping jack flash

      Indeed but the benefit of students is that you can stack them on top of each other – 12 to a 3br house. With the aggregate of 12 x $10/hour jobs, or even less per hour, they can live quite comfortably.

  3. Yeah nah, this is the student equivalent of macro prudential, never going to happen till a RC and then the RC will be ignored and it will be same old same old

    • Jumping jack flash

      RC only happens when one of their mates has a bit of hard luck and needs a bit of public money to tide them over…

  4. Restrict the pathway from student visa to PR and watch the numbers plummet. However, this won’t happen nor will enrolment numbers decrease significantly because high migration is keeping the country out of recession. No political party wants to be overseeing a recession.

  5. in recent rounds of hiring I’ve noticed how desperate international students are for a job in a related industry which is a requirement for permanent migration. having people willing to do a 80K per annum jobs for just 45K, typically with masters degrees & 5 years industry experience. tell me this is not driving down wage growth?