Universities cry poor as international student numbers boom

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Australia has the highest concentration of international students among major advanced nations.

International student concentration

Figures from the Department of Home Affairs show that the approval rate for international student visas fell below 75% in October, compared to 83.6% for the same month in 2024.

The decline in approval rates came at the same time as the number of offshore student applications increased strongly compared to 2024.

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Offshore student applications in October 2025 were 22,905 compared to 19,873 in October 2024. September 2025 offshore applications were 19,975 compared to 14,963 in September 2024.

The decline also follows the Department of Home Affairs’ (DHA) “Student Visa Integrity Alert” warning that visa fraud is on the rise, driven by students from South Asia.

The DHA’s alert warns of “emerging risks” involving prospective students and education agents “seeking to exploit Australia’s immigration system”.

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“Multiple reports of student visa applicants using fraudulent passport details to gain Confirmation of Enrolments (CoEs) with Australian Education Providers (EPs), particularly in the Higher Education sector”, DHA notes.

“These fraudulent activities are circumventing risk and evidentiary requirements, undermining the integrity of the Student Visa Program”. 

DHA also noted that “agents are being incentivised by some EPs to facilitate applications regardless of supporting documentation to drive demand for their institution, irrespective of the long-term effect on their attrition/retention rates”.

“These factors are noted, but not limited to, South Asian markets, which are showing current growth”, DHA says.

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The DHA also warns that the easing of risk weightings for universities and countries has been used by “some bodies” as “evidence that Australia’s Student Visa Program is open to non-genuine students. This is an intentional misrepresentation of the Evidence Level Framework, and education provider obligations”. 

Former senior immigration department bureaucrat Abul Rizvi was quick to scaremonger about the decline in approval rates, claiming that it could wreak havoc on university finances:

“I haven’t seen such a sharp drop in visa grant rates in a long time … and it’s very odd, it’s hard to tell if this is deliberate or not. Either it’s an aberration (in the data) or a policy change we don’t know about,” Dr Rizvi said.

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“If the October pattern continues, the universities will be in financial trouble. They have all been planning for a big influx of international students and a big inflow of tuition fees because the government told them to prepare for it.

“The universities would have been celebrating three months ago so (these approval rates) would be quite frustrating”.

Rizvi’s claim that universities face “financial trouble” is curious given that the latest Department of Education data shows that universities are enjoying record volumes of international enrolments:

International student enrolments

In the year to September 2025, 531,855 international students were enrolled at Australian universities, up 10% from 2024 and 24% above the pre-pandemic peak in 2019.

International student commencements at Australian universities also hit a record high of 200,778 in the year to September 2025, up 0.8% on 2024 and 22% above the pre-pandemic peak in 2019:

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International student commencements

It’s hard to have sympathy for universities when their international student enrolments are tracking at record high levels, well above international peers.

When is enough ever enough? Australia’s concentration of international students was already absurdly high before the pandemic and it worsened since.

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International student concentration

International student concentration in 2019 (Source: Salvatore Babones)

Australia should follow Canada and severely cut the number of international students to sensible and sustainable levels:

IRCC has released its 2026 targets for the national international student cap, and the message is blunt: student numbers are dropping again. The government wants to reduce the temporary resident population and sees international students as central to that effort.

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Canada had more than 1 million study permit holders in January 2024. By September 2025, that number had fallen to about 725,000. IRCC plans to keep pushing this number down.

The 2026 target is 408,000 study permits. This includes both new arrivals and existing students renewing their permits. It is lower than both 2024 and 2025…

Canada wants the temporary resident population below 5% of the national total by the end of 2027. The cap on study permits is one of the tools used to reach that target.

Instead, the Albanese government has raised the planning level and used Ministerial Direction 115 to water down regulations to make it easier for universities to recruit international students.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.