Charles Sturt University says the shortfall between international student recruitment before Covid and now is costing $35 million. The university is filling 40% of its allocated places and has announced job cuts and restructuring. International student fees are the only profitable part of university operations, according to higher education expert Prof Andrew Norton. Universities use those fees to cross-subsidise teaching and research.
Who Pays for the Shortfall
Mike Ferguson, pro vice-chancellor of international students at Charles Sturt University, said the university was around 35% down on the previous year, when it had expected growth. It now has 20% of the international student volume it had before the pandemic.
Australian universities are filling about two-thirds of their allocated international student places on average. Department of Education figures in October showed only five public universities had reached more than 80% of capacity, all in capital cities.
Ferguson blamed government policy for the decline, including an increase in visa applications to $2,500, high refusal rates and uncertainty after announcements by the Coalition and One Nation targeting international students. Regional universities primarily recruit students from south Asian countries, where visa refusal rates were 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.
Prof Andrew Norton said falling international student numbers were affecting all public universities because international student fees cross-subsidise teaching and research. “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 declines in overseas students were creating financial deficits that could affect domestic students. “In our case, international students heavily subsidise domestic students, and it puts real pressure on the services we can offer to domestic students,” he said. Williams said universities across the sector were asking where they could save money and pull back.
Adelaide University told the ABC in September it had reached 60% of its international student capacity after its merger with the University of South Australia, creating a potential $90 million revenue shortfall.
Visa Policy and Regional Skills
The government's 2026 planning level for international students was 295,000, while the number was tracking towards 250,000. That was just above the Coalition's proposed level of 240,000. Labor will reduce the number of international students eligible to bring family to Australia while studying; the Coalition has promised to abolish temporary graduate visas.
Ferguson said Charles Sturt supported Labor's decision to crack down on onshore student transfers and visa hopping to improve the system's integrity. Duncan Bentley, vice-chancellor of Federation University in regional Victoria, said his university also faced significant pressures as far fewer international students enrolled this year. Federation has urged the government to create a special regional skills student visa for international students taking courses in fields 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. He said the proposed regional visa would be open to overseas students studying at regional universities in courses on a regional skills shortage list, based on the premise that domestic regional graduates can't meet demand.
Phil Honeywood, chief executive of the International Education Association of Australia, said the high non-refundable visa cost made the system “more like a lottery ticket.” He said regional communities lacked nurses, childcare workers, aged care workers and engineers. Declining international student numbers and limits on staying after degrees could create a cascading skills shortage.
Williams said the heated political debate was deterring international students and “would lead people to wonder whether they would be welcome in Australia.”
Election Offers and Public Resources
In Victoria, Opposition Leader Jess Wilson proposed 10 new technical colleges statewide under a Coalition government, following a South Australian model. The full-time colleges would enrol students from years 10 to 12, unlike Labor's Tech Schools. The Coalition estimated the plan would cost $222 million over eight years and educate a cumulative 5,000 students in plumbing, electrical work, carpentry, healthcare and hospitality.
“My team is backing the next generation of tradies to get the skills they need sooner for a rewarding career,” Wilson said. She said the workforce was needed to deliver the Coalition's agenda for more homes and housing choice, and that not every student wanted to attend university.
The Coalition described existing tech schools as “drop-in centres offering short-term experiences but no vocational qualifications.” Victoria's secondary education system had been divided between academically focused high schools and vocational technical schools until the Cain government reformed it into amalgamated colleges in the late 1980s under then-education minister Joan Kirner. Ahead of the 2014 state election, then-opposition leader Dan Andrews pledged to revive technical schools. Several opened, including in Geelong and Frankston. Frankston Tech School opened in 2025, and more than a dozen training centres opened across Victoria over the past decade.
Premier Ben Carroll pledged that a re-elected Labor government would direct 100% of mineral resource royalties into regional Victoria. Citing Western Australia's “royalties for regions” policy, Carroll said every cent collected would be reinvested in regional infrastructure, including schools and hospitals. He estimated Victoria's minerals endowment could generate $500 million over the next four years and cited approval of the Avonbank Mineral Sands Project in the Wimmera and the Southern Cross Gold Sunday Creek exploration project.
Then-WA Nationals leader Brendon Grylls spearheaded the Western Australian policy in exchange for supporting then-Liberal leader Colin Barnett to become premier after the deadlocked 2008 WA state election. The Victorian election was scheduled for November 28, with voters due to go to the polls the following month. Separately, the Australian Financial Review reported a record number of students had secured university offers before HSC exams began the following week, amid fears of “grade inflation.”