Charles Sturt University has filled just 40% of its international student cap this year. That's 35% below last year, and the university says it now has only 20% of the overseas student volume it had before the pandemic. The estimated cost of that gap is $35 million, alongside announced job cuts and restructuring.
The figure is striking. It isn't isolated. Department of Education figures from October show Australian universities fill about two-thirds of their allocated international places on average. Only five public universities have passed 80% capacity, and all five are in capital cities.
A Policy-Made Slump
Mike Ferguson, pro vice-chancellor of international students at Charles Sturt, doesn't blame the market. He blames government settings. "At the moment, we're around 35% down on where we were last year, and we had expected to grow from last year," he said. He pointed to a visa application fee lifted to $2,500, high refusal rates and uncertainty stirred by announcements from the Coalition and One Nation targeting international students.
Regional universities draw mostly from south Asian countries, where visa refusal rates run 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.
He backed one Labor measure: the crackdown on onshore student transfers and visa hopping, which he said would improve the system's integrity. Federation University vice-chancellor Duncan Bentley echoed him, saying his institution has long asked for a 12-month ban on course hopping, apart from exceptional and genuine circumstances.
Who Pays When International Fees Dry Up
Prof Andrew Norton, a higher education expert, laid out the structural problem bluntly. Public universities cross-subsidise teaching and research with international fees. "It creates massive problems because international students are basically the only profitable aspect of university operations," he said.
Western Sydney University vice-chancellor George Williams said local students bear the consequences. "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," he said. "In our case, international students heavily subsidise domestic students, and it puts real pressure on the services we can offer to domestic students." He added that the heated political debate was deterring students and "would lead people to wonder whether they would be welcome in Australia".
Adelaide University told the ABC in September that it had reached 60% of its international capacity following its merger with the University of South Australia, opening a potential $90 million revenue shortfall. The government's 2026 planning level for international students is 295,000. The number is tracking toward 250,000, just above the Coalition's proposed level of 240,000.
Labor will cut the number of international students eligible to bring family while studying. The Coalition has promised to abolish temporary graduate visas.
Regional Skills Squeeze
Federation University wants a special regional skills student visa, limited to courses on a regional skills shortage list where domestic graduates can't meet demand, such as allied health or teaching. Phil Honeywood, chief executive of the International Education Association of Australia, said the non-refundable visa cost "makes the system more like a lottery ticket". He warned of a "cascading skill shortage" in nursing, childcare, aged care and engineering if regional international enrolments keep shrinking and graduates can't stay.
Victoria Bets on Trades
In Victoria, Opposition Leader Jess Wilson proposed 10 new technical colleges under a Coalition government, modelled on South Australia's. Students would enrol full time from years 10 to 12. The Coalition put the cost at $222 million over eight years, educating a cumulative 5,000 students in plumbing, electrical work, carpentry, healthcare and hospitality.
"A house doesn't build itself, and our ambitious agenda to deliver more homes and more housing choice for Victorians needs a skilled workforce to deliver it," Wilson said. "Not every student thrives in a traditional classroom, and not every young person wants to go to university. They deserve another pathway to a great career."
The Coalition called Labor's existing tech schools "drop-in centres offering short-term experiences but no vocational qualifications". More than a dozen such centres opened across Victoria over the past decade, including Frankston Tech School in 2025. Premier Ben Carroll, meanwhile, pledged that a re-elected Labor government would direct 100% of mineral resource royalties into regional Victoria, which he estimated could generate $500 million over four years. The Victorian election is scheduled for November 28.
Separately, the Australian Financial Review reported a record number of Year 12 students raced to secure university offers before HSC exams began the following week, amid fears of "grade inflation".
Why This Matters:
The numbers point to a sector whose finances rest on a single, politically exposed revenue stream. When visa fees climb to $2,500 and refusal rates hit 53% in key source markets, universities lose the fee income that, by their own account, props up domestic teaching. Regional campuses face the heaviest risk, with Charles Sturt already announcing job cuts. There's a policy tension: tighter visa settings aim to protect system integrity, yet those same settings drain institutions and feed skills shortages in the regions. Voters and lawmakers will have to weigh whether Canberra's levers deliver the migration outcomes they promise, or just shift costs onto universities and the domestic students they subsidise.