Halfway through Australia’s 2023/24 fiscal year, recent and planned policy changes have sent ripples through the country’s international education sector. After hitting record student population highs in the previous year, the sector is undergoing changes to help set the stage for gradual, more sustainable growth in future years.
Even so, over 165,000 international students were granted a student visa during the first half of fiscal year 2023/24.1 That’s a 30% drop from the first half of 2022/23, but it matches the mid-year totals from 2019/20.
Read on to see how trends in Australia’s international education sector shifted at the end of 2023, what these mid-year results can tell us about 2024, and much more.
Key Insights at a Glance
- Over 165,000 international students were granted student visas to study in Australia from July to December 2023.
- China passed India to once again become the top international student source country for Australian institutions.
- New Australian policies regarding international students aim to set the stage for future sustainable growth.
- Student mobility to Australia is on track to return to pre-pandemic levels.
Visas Granted Return to Pre-Pandemic Levels
After setting international student population inflow records in 2022/23, early results in the 2023/24 fiscal year were more modest. The number of student visas granted returned to near pre-pandemic levels:
Although uncertainty surrounded planned government policy reforms early in 2023/24, student visa applications surged to over 240,000. This represented a 14% increase in visa applications compared to the mid-point in the last fiscal year. However, visa approval rates dropped significantly during this period. ELICOS and VET approval rates each fell by around 7 percentage points (down to 85% and 70%, respectively), while Higher Ed approval rates declined from 88% to 83%.
As Australian student visa numbers trend back towards pre-pandemic figures, there are some major similarities between mid-year 2019/20 and 2023/24. Student visas granted for ELICOS and Schools2 were nearly identical between the two six month periods. And while granted postgraduate visas were 20% higher in 2023/24, this resulted in only 800 additional approvals.
Higher Education Relatively Steady as VET Faces Challenges
The main difference between these two years can be found when looking at the Higher Ed and VET study levels. Comparing July to December 2023 (2023/24 fiscal year) with the same period in 2019 (2019/20 fiscal), granted Higher Ed visas were 13% higher in 2023/24 whereas granted VET visas were nearly 30% lower.
Comparing early 2023/24 to the 2022/23 fiscal year, the contrast between VET and Higher Ed is clear:
Both sectors have experienced a drop-off in granted student visas. Through the first six months of 2023/24, visas granted for Australian Higher Ed declined by 18% compared to the same period in 2022/23. By contrast, visas granted for VET studies fell by almost 55%. This means that students applying for Australian Higher Ed studies accounted for nearly 60% of all student visas granted in the first half of 2023/24.
With the Australian government recently raising concerns about non-genuine education providers and “visa hopping” in the VET sector, we expect VET grant rates to remain lower in 2023/24. However, student demand for Australian VET studies remains high. Over 65,000 visa applications were lodged for VET studies by December 2023, a 9% increase over the same period in 2022/23. As the sector adapts to more rigorous student and institution screening over the next year, we anticipate that the sector will begin to bounce back in 2024/25.
Check out our recent deep dive on policy changes affecting international education to learn more about student visa, post-work, and immigration pathway shifts in Australia, Canada, the US, and the UK.
Emerging Source Countries Show Positive Diversification for Australian Institutions
As we detailed in our 2024 Trends Report, the long-term health of any country’s international education sector relies on source country diversification. For Australia, this means less reliance on the historically strong Chinese student market and dominant Indian student population.
The racing bar chart below shows the top 10 source markets for Australia’s international education sector since 2018/19:
It’s clear that China and India remain the top source markets for Australian institutions, and by a wide margin. Together, students from these two countries accounted for nearly 40% of all granted visas from July to December 2023. However, recent drops in visa approval rates for Indian students demonstrate an urgent need for institutions to recruit students from other source markets.
This diversification focus is not new for Australian institutions. A strong campaign for students from Latin America (LATAM) helped make Colombia and Brazil top source countries for international students to Australia in the late 2010s. And there are positive signs of continued diversification: By December 2023, visas granted to students from Vietnam and Bangladesh surpassed 50% of full-year totals in 2022/23. In fact, this is the first time Bangladesh has been a top 10 source country for Australian student visas granted.
As well, several smaller source markets have demonstrated strong growth over the past five years:
Bhutan and Kenya have both become important student source markets for Australian institutions. Reaching #13 and #15 on Australia’s top source market list, respectively, students from both nations are largely drawn to higher ed studies. Although visas granted to Bhutanese students were stable in early 2023/24 compared to the same period in 2022/23, visas granted to students from Kenya surpassed 60% of 2022/23 full-year totals.
Other smaller source markets that surpassed 2022/23 mid-year granted visa totals in Jul–Dec 2023/24 included Mongolia, Iran, and Saudi Arabia.
Australia’s New Migration Strategy
The Australian government didn’t introduce the Migration Strategy until December 2023, meaning that it had little direct effect on visa trends in the first half of fiscal 2023/24. However, its anticipated release likely helped drive higher student application volumes in the first half of the year. Students wanted their applications to be processed under the existing system, which they knew, rather than wait and adapt their application to the new policies.
This document, focused on increasing the integrity and quality of Australia’s international education sector, outlined eight key actions that would drive migration system reform:
- Introduce measures to improve integrity in international education and support genuine students.
- Increase English language requirements to reduce potential workplace exploitation and improve student education quality.
- Apply more targeted scrutiny to student visa applications from high-risk providers.
- Reduce misuse of Australia’s student visa system through bolstering the student visa integrity unit.
- Strengthen requirements for international education providers.
- Restrict onshore visa hopping that undermines system integrity.
- Simplify and strengthen Temporary Graduate visas.
- Support international students and graduates to realize their potential.
These actions are intended to create a more robust international education system that prioritizes attracting students genuinely looking to complete their studies in Australia. Key to these efforts is the introduction of the Genuine Student Test, a list of questions that will increase clarity around post-study temporary migration pathway eligibility and discourage false applications. Additionally, Australia will focus on improving visa processing through prioritizing applications based on the risk-level of providers.3
Looking Forward
As we noted earlier this year, these policy changes are focused on reducing application fraud, which should have the long-term impact of encouraging sincere applications and discouraging misuse. Already, applicants from some major source countries, such as India, have been asked to withdraw their visa applications and overall application volumes have dropped. While this will likely cause a limited decline in overall international student numbers in Australia in the short term, it puts the country on a solid footing for more sustainable future growth.
Maintaining sustainable growth is critical not just for the destination country, but also for the students hoping to study there. Housing shortages have become a major issue in every destination market, and concerns regarding post-study work permits have also arisen in multiple destinations. As a result, Australia is not the only country to have recently enacted government shifts regarding international education. Canada and the UK have also updated policies impacting student mobility, and approaching US elections could lead to changes in the world’s top destination market.
At the end of the 2023/24 fiscal year, we’ll revisit Australian student visa trends. By then, there should be clearer signs of the impact of these policy changes, and a better understanding of their direct impacts on potential students.
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FOOTNOTES:
1. All data courtesy of the Australian Department of Home Affairs (ADHA). All data reported according to Australian governmental financial years, which span from July of one year to June of the next year (for example, July 2022 to June 2023 was the 2022/23 year). The data used for this article includes subclass 500 and subclass 570 to 576 visas granted to primary applicants only, excluding visas issued under Foreign Affairs and Defense sector designations.
2. The Schools category includes all primary and secondary-level education.
3. At the date of this blog’s publication, greater clarity on what questions the Genuine Student Test will include and further details on provider risk-level assessments are not yet available.
