As students and institutions look ahead to next year, they face an international education landscape changed by government policy announcements. These policies, aimed at supporting more sustainable international student pathways, have already begun shifting student demand. And, significantly, the impacts of these policies are likely to extend beyond just 2025.
2025 will be the first year that half of the “Big Four” destination markets1 have government-set limits on new international student populations. Canada’s international student cap was rolled out in 2024, with newly-announced reductions to the cap set to come into effect in 2025. Australia is also poised to enact international tertiary student enrollment limits for 2025, though the necessary legislative amendments have yet to be passed by Australia’s parliament.2
With these caps on the horizon, Australia’s international education sector has limited time to plan and to act. But, by looking toward Canada’s cap experience, Australian institutions can be better prepared and informed about upcoming challenges and opportunities. That’s why today, we’re diving into international student trends in Australia over the past year, the potential impact of the planned student caps, and what Australian institutions can do to support sustainable, diverse international student populations.
Key Insights at a Glance
- There were nearly 556,000 new international student commencements3 across all study levels at Australian institutions in 2023, with another 306,000 in the first half of 2024.4
- The Australian government plans to enact a new cap on international student enrolment in 2025, setting the overall cap at 270,000 commencements for tertiary study levels.
- New study permit applications to Canadian tertiary institutions fell by 50% year-over-year in the first two months after study permit processing recommenced under new cap limits.
- Canada’s experience has shown that student caps impact demand for all study levels, even those exempt from the cap.
Before the Cap: International Student Commencements in Australia for 2023 and 2024
Prior to the proposed cap, Australia benefited from increased student mobility post-pandemic. In 2023, international student commencements across all study levels hit an all time high of nearly 560,000, surpassing the previous high-water mark from 2019 by almost 10%.
And, in the first six months of 2024, international student enrolment continued to rise:
The first half of 2024 also set new records. Including all study levels, there were over 305,000 international student commencements by the end of June 2024, making it the busiest six-month period in Australian history for new international students. We expect that this high student demand will continue throughout the rest of the year, allowing commencements to reach almost 590,000 by the end of 2024.
Higher ed programs accounted for 39% of commencements over this period, with VET programs representing 36%. These strong commencement numbers were largely driven by students from India and China. Collectively, these students accounted for 30% of all commencements in Jan–Jun 2024, including nearly 60% of all higher ed commencements, as they have in each year since 2021.
Australia’s International Student Caps for 2025
While tertiary studies represented 75% of all international student commencements in the first half of 2024, this figure will likely fall in 2025.
That’s because Australia’s National Planning Level (NPL) is aimed exclusively at limiting tertiary international student commencements. Set to come into effect for January 2025, the NPL will cap higher ed and VET at 270,000 new commencements for the 2025 calendar year. This means that schools, ELICOS, and non-award programs are all unaffected by the planned policy, as are higher degree by research programs.
The NLP will split the commencement cap towards maintaining elevated higher ed student populations. Around 65% of commencements will be set aside for higher ed commencements, with 145,000 going to public universities and another 30,000 to other higher ed providers. The remaining 95,000 will be allocated to VET programs.5
How Different Will 2025 Look Compared to 2023?
Overall, these changes mean that commencements for international students in 2025 will be limited to around 65% of 2023 volumes for higher ed and VET programs. Given that 2024 commencements are on track to be higher than 2023 levels, this sets the stage for a substantial drop in 2025:
Under the proposed government caps, VET commencements are set to decline significantly, far beyond the impact to Australian universities. VET commencements haven’t been below 100,000 in a calendar year since over a decade ago, when total commencements across all study levels were nearly 50% lower than projected 2024 end of year figures. Higher education commencements, meanwhile, will look nearly identical to 2019 levels.
But these 2025 caps are all government estimates, which means these figures assume each institution will fill their full commencement cap allotment. In other words, this is the ceiling for Australia’s tertiary international education landscape for 2025. But the lessons learned from Canada’s caps show that brand-damaging policies can cool international student demand beyond intentions and expectations.
What Were the Impacts of Canada’s Student Visa Cap?
While Australian tertiary institutions will have limited time to prepare for potentially substantial changes in student demand, they’re not the first to need to adapt to significant government policy changes: Canada enacted international student caps at the start of 2024.6 The Canadian caps announcement came as a surprise to the sector, blindsiding most institutions and leaving them scrambling to adjust to their new landscape
Canada’s 2024 caps and the planned Australian 2025 are very similar. Both limit tertiary international student volumes for tertiary studies by around 35% compared to the previous year, and both left other study levels out of cap considerations. On this basis, both policies are likely to have similar effects on student demand.
Looking at initial data on Canadian study permit applications after Canada’s 2024 caps came into effect,7 the impact of caps has dampened student demand for all study levels:
Comparing the same period of February to May over the past three years,8 Canadian study permit applications declined across all study levels from 2023 to 2024. Applications for university studies largely fell back to 2022 levels while college applications dropped more sharply, falling 70% year-over-year.
Based on current Canadian study permit trends, we project that 39% fewer Canadian study permits will be processed in 2024 compared to 2023. And the impacts of these declines aren’t limited to just tertiary institutions with new student visa caps: Canadian study permit applications are projected to drop for all study levels in 2024. In fact, we project that if conditions remain similar through the end of 2024, the number of Canadian study permit applications processed for cap-exempt programs could drop by 24% compared to 2023.
There’ve been reports that most Canadian institutions are underperforming their cap allocations by an estimated 30–50%.
Predicting Student Demand for Australian Tertiary Education in 2025
Early student trends from Canada’s caps point in one clear direction: the impact of international student caps don’t just affect the programs and institutions that receive cap allotments. All institutions feel the influence of caps, especially as demand is increasingly tied to whether students feel a destination is welcoming for international students.
Given the close alignment between the Canada 2024 and Australia 2025 cap figures, this could mean that Australia will also experience a near 40% decline in total commencements next year. Taking the tertiary caps into account, even a 10% drop in demand for all other study levels—which, based on what we’re seeing in the Canada’s exempt postgraduate studies field, is likely a significant underestimate—would result in Australia’s overall commencements dropping by 26% in 2025 compared to 2023:
Given that Canadian institutions experienced a sharper demand drop than illustrated above, it’s likely that a 26% decline year-over-year understates the potential impact of the NLP. If the demand decline in non-tertiary studies were to mirror the decline imposed by the cap,9 total commencements would drop to less than 378,000 in 2025. This would set new international student populations in Australia back by a decade, aligning with 2015 volumes.
What Australian Institutions Can Do to Prepare for the 2025 Caps
While the NLP is intended to make Australia’s international education sector more sustainable, Australia’s tertiary institutions face a stark challenge in adapting to the planned changes. Additionally, as we’ve outlined above, all Australian institutions who welcome international students need to prepare for an overall decline in student demand next year.
In our recent Q3 2024 ApplyBoard RP Pulse Survey, 75% of recruitment partners agreed that Australia’s study visa caps make it a less attractive destination for international students.
International students of all levels, whether they are impacted by caps or not, are likely to interpret these new government policies as a sign that newcomers are less welcome in Australia than they used to be. As a result, institutions have an increased role to play in making sure students feel welcome. Institutions can achieve this by ensuring that necessary information about student pathways is easily accessible, and that application systems are responsive and easy to understand.. By reducing or removing other roadblocks that can hinder a student’s application process, Australian institutions can help mitigate some of the surface impacts of cap policies.
Emerging Markets Can Create Sustainable Diversity Pathways
For some Australian universities and especially VET providers, it will be impossible to avoid the impacts of the NLP. But even for those institutions that may avoid significant cap issues, a renewed focus on student diversity is critical for the future stability and sustainability of international education in Australia.
Creating or reinforcing recruitment efforts in a specific region or country is not easy to do in a short timeframe, but focusing on existing and emerging growth markets can yield better outcomes. Across Australia’s 15 largest new tertiary student populations in the first half of 2024, only eight experienced growth compared to the same period in 2023:
Of these eight established student populations, two featured a higher rate of VET commencements: Colombia and Brazil. As major student populations who follow the ELICOS-to-VET pathway, Latin America is likely to remain a key region to ensure all cap allocations can be filled in 2025. By contrast, Australian universities should look to dedicate recruitment resources across Asia to ensure they maximize their cap allotments.
Beyond these established markets, institutions should also look to evolve their recruitment efforts towards emerging student populations:
While tertiary student populations from these five countries may remain relatively small, they all grew significantly from early 2023 to early 2024. Expanding recruitment efforts to Mongolia, Türkiye, and Cambodia can help bolster regional strategies across Asia. Likewise, broadening Latin American plans to include Chile and Argentina can help reinforce student pathways for Australian institutions.
Australian Institutions Need to Work Together to Achieve Stability
The NLP is set to define international education in Australia in 2025. And while it’s likely to create new challenges for Australian institutions of all levels, it doesn’t close the door on existing opportunities.
Looking ahead to 2025, it’s important to note that the levers of interest that draw students to Australia haven’t changed. Australian work rights and immigration pathways are unaffected by these new policy changes, and overall migration levels to Australia are also beyond the scope of the NLP. By communicating these key facts to potential international students, Australian institutions can reassure students that Australia remains a welcoming destination for studying abroad.
Australian institutions have also already shown their willingness to work together and advocate for the sector as a whole. Maintaining that collaboration throughout 2025—whether through formal associations or informal networks—can create channels to share successful strategies, leverage collective resources, and better support international students.
If you’re planning to attend the Australian International Education Conference (AIEC) in Melbourne on October 22–25, we look forward to seeing you there!
As a mature international education sector, Australia is well poised to learn from Canada’s cap experience and mitigate broader declines in student demand.
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FOOTNOTES:
1. “Big Four” destinations include the most popular countries for post-secondary education in English: Australia, Canada, the United States, and the United Kingdom.
2. As of date of publication (October 10, 2024). However, it is widely anticipated that these amendments will be passed in time for the caps to come into effect for January 2025.
3. A commencement is an enrolment that began at any time within the year in which it appears. If a student continues their program into subsequent years, the commencement will still only reflect in the first year of study. For example, a student who begins their higher ed program in June 2023 will be counted as one commencement in 2023, but if they continue in that program in 2024, they will not count towards commencement figures in 2024.
4. All Australia data courtesy of the Australian Department of Education (ADOE) and the Australian Department of Home Affairs (ADHA), and all Canada data courtesy of Immigration, Refugee and Citizenship Canada (IRCC), unless otherwise noted. All data covers international students studying on student visa subclasses 500 and 570-575 only. All data outlined in this article is based on calendar year reporting, unless otherwise noted.
5. In deciding how many allotments each institution will receive, the Australian government specifically aimed to limit institutions that experienced rapid international student growth in the post-pandemic period. Broadly, the Australian government applied a formula which used international student commencement figures per institution for 2019 as a base. For institutions who experienced international student population growth at 37% or less from 2019 to 2023, allotments were awarded to maintain 2023 international population figures. For all other institutions, a cap of 50% growth over 2019 figures was applied.
6. The terms student visa and study permit are generally used interchangeably for Canadian international students. Rather than student visas, Canada provides accepted international students with study permits, which allow those students to enroll in classes at Canadian institutions. When a student is approved for a study permit, they are also usually provided with a visitor visa, which allows that student to enter Canada for their studies.
7. Canadian study permit processing for impacted programs stopped nationwide on January 22, 2024, and provinces had to establish and launch their PAL process by March 31, 2024, before processing could restart.
8. More recent data not currently available
9. Approximately 32% for higher ed and VET combined in 2025 compared to 2023 figures.
