Falling international student numbers create 'massive problems' for Australian universities, expert warns

University leaders warn they're struggling to fill international student places due to visa uncertainty and heated political debate on immigration, with regional areas hit the hardest and concern that financial deficits could affect domestic students. The latest numbers from the Department of Education in October show on average universities are filling just two-thirds of their allocated places, and just five public universities have reached more than 80% capacity, all in capital cities. Mike Ferguson, pro vice-chancellor of international students at Charles Sturt University, which has campuses across regional New South Wales, said his institution has filled just 40% of its cap this year. "At the moment, we're around 35% down on where we were last year, and we had expected to grow from last year. Currently we only have 20% of the international student volume we had prior to the pandemic," Ferguson said. Charles Sturt has estimated the gap between international student recruitments pre-Covid and now is costing $35m, and the university has announced job cuts and restructuring in response. Ferguson attributed the fall to government policy, including hiking visa applications to $2,500, high refusal rates, and growing uncertainty from announcements by the Coalition and One Nation targeting international students. Sign up for the Breaking News Australia email He said regional universities primarily recruited students from south Asian countries, which were experiencing higher visa refusal rates of about 53%. "It's not only resulting in us losing what we believe to be largely genuine students … but it's also creating a large deterrent from new students to come in and apply, knowing they're having to pay world record visa fees with only a one in two chance of actually getting a visa," Ferguson said. But he said the university does support Labor's decision to crack down on onshore student transfers and visa hopping to improve integrity in the system. Prof Andrew Norton, an expert in higher education, said the declining numbers were affecting all public universities because they cross-subsidise their teaching and research with international student fees. "It creates massive problems because international students are basically the only profitable aspect of university operations," he said. Duncan Bentley, vice-chancellor of Federation University in regional Victoria, said he too supported those measures but that his university was also facing significant pressures with far fewer international students enrolling this year. The university has pushed the government for a special regional skills student visa that would prioritise international students wanting to do courses in critical areas such as allied health or teaching. "We endorse, and have been asking for a long time for, the 12-month ban on course hopping, apart from exceptional and genuine circumstances," Bentley said. "The criteria for this regional visa would be any overseas student who wants to come and study in a regional university can have access to a special visa … the course should be on a regional skills shortage list, based on the premise that domestic regional graduates can't meet the demand." Western Sydney University vice-chancellor, George Williams, said his university had also experienced significant declines in overseas students and warned the financial deficits could have an impact on domestic students. "It has an enormous impact on our budget and it means universities across the sector are asking where they can save money, where they can pull back," Williams said. "In our case, international students heavily subsidise domestic students, and it puts real pressure on the services we can offer to domestic students." Williams also said international students were being deterred by the heated political debate, "which would lead people to wonder whether they would be welcome in Australia". Adelaide University told the ABC in September it had only reached 60% of its international student capacity, after its merger with the University of South Australia, creating a potential $90m revenue shortfall. The government's 2026 planning level for international students was set at 295,000, and so far it's tracking towards 250,000, which is just above the Coalition's proposed level of 240,000. Labor will also reduce the number of international students eligible to bring family to Australia while they study, while the Coalition has promised to abolish temporary graduate visas. Phil Honeywood, chief executive of the International Education Association of Australia (IEAA), said diminishing international student numbers in regional areas could also lead to critical skills shortages. "The high non-refundable visa cost makes the system more like a lottery ticket," Honeywood said. "There's not enough nurses, childcare workers, aged care workers or engineers in regional communities … so basically if you have diminishing numbers of international students in these regional areas and they're not able to stay past their degrees, that creates a cascading skill shortage."