This week the government announced the overall international student cap for 2025, of 270,000 new commencing students, with some student types not counted towards the cap. I have a high-level summary in The Conversation. This post explores the capping announcement in more detail, noting additional problems with this deeply flawed policy.

The power – or lack thereof – to exempt particular types of students

On Tuesday the government announced three new exemption categories:

• students who are part of “twinning” arrangements, taking some of their course offshore before coming to Australia
• students with Australian government or “key partner” foreign government scholarships
• students from the Pacific and Timor-Leste.

On my reading of the bill, the last two exemptions are not supported by its current wording and the twinning exemption is probably not within the bill’s existing scope.

While the bill clearly gives the minister the right not to cap a class of provider (such as schools, an already announced exemption) or not to cap a type of course (such as postgraduate research courses, another already announced exemption), it has no provision for picking and choosing between types of overseas students.

While there is a reference to a course in the twinning context, I don’t think this is a course in the CRICOS context and therefore this a reference to a particular type of overseas student.

Should the bill be amended this way? In principle exempt categories of students are OK, but the bill gives the minister far too much personal discretion already. The exempt categories of students should be subject to parliamentary review.

When is a student counted?

In my ANU report on the caps I raised concerns, based on the Department of Education submission to the Senate inquiry, that the government planned to use confirmations of enrolment to police the caps. As students receive CofEs before they get a student visa, students whose visas were rejected or who did not go through with their enrolment would be counted towards the cap.

The bill, however, never supported this interpretation. The earliest possible legal time a student can be counted is when they receive their student visa.

A paper released by the DofE this week puts the count date later than the student visa grant. A student “counts towards the Provider Limit on the date the CoE moves into the ‘Studying’ status.” So if the student never starts the course they are not counted.

This definition extends the period in which education providers can cancel enrolments to stay within their caps, although obviously this should be an absolute last resort.

When is a student “new”?

An international student will be counted as “new” the first time they enrol with an education provider. If they switch to a different course at the same provider they will still only be counted once. This is consistent with my reading of the relevant provisions in the bill.

However if the student moves to another education provider they will be counted as “new” again.

This means that the cap for 2025 is 270,000 new international student provider-level commencements but not 270,000 new international students.

In a previous post I reported my calculation that, on average, each international student had 1.3 enrolments in 2023. I don’t know how many of the students with two or more enrolments had them at different providers.

Concentrations of international students

While universities will not have a set maximum percentage of students who are international students, their caps will include a penalty for high concentrations of international students.

This is the formula the government is using:

Other definitional and statistical issues

2023 enrolment data is critical to this formula but it is not publicly available. We are stuck with 2022 as the latest data. I’m bored of complaining about long delays in releasing data, but making decisions critical to the future of Australian higher education, using private data disputed by universities, adds to the problems of both the capping policy and data release practices.

Some of the terms used in the policy are unclear. Which countries are “key partner” countries of Australia? (And will this offend countries deemed non-key?)

How will “twinning arrangements” be defined? The TEQSA definition seems to be “students completing part of their course at one provider, and the remainder at another”. Would students who start their courses at an offshore campus of an Australian university and finish at the onshore campus be in a “twinning arrangement”?

“New” as defined in the capping system, scholarship holders, and students who start their studies in Australia after a twinning arrangement are also absent from public data collections.

Qualification level bias

While in 2026 caps may include commencing and continuing students, the current focus on commencing students creates an incentive to focus on students in longer degrees who will generate more years of revenue.

Using a financial logic the order of priority would be diploma last, then masters and then bachelor as the most preferred.

Pathway colleges

In practice, universities have often let pathway colleges – including colleges they own themselves – teach diploma courses. Students take a one-year diploma at a pathway college, with its curriculum based on the first year curriculum of a target bachelor degree at a target university. If the student receives the necessary academic results they are guaranteed entry into the second year of the target course. In 2022 65% of sub-bachelor higher education international students were in non-university providers.

This model is jeopardised by the capping policy.

While exact numbers are hard to come by, a media report suggests that NUHEPs will be cut by 30% on their 2023 commencing student levels. That will reduce the flow of students into the universities.

Because the university and the NUHEP have separate caps, it becomes difficult to keep the guarantee that the NUHEP diploma student can transition into the target course. The government has recognised this problem of course interconnections in the offshore twinning model but not for the onshore pathway model.

Under the definition of “new” commencing student, the pathway model means the same person is counted twice, first at the pathway college and then at the target university.

Reallocating unused places

An inherent problem with bureaucratic systems of distributing student places is that they can’t easily move to meet demand.

For reasons explained in my Conversation article, I think some providers will end up with caps they cannot fully utilise.

In his Tuesday media conference, the minister said that if there “is a situation where some universities don’t fill their cap, there will be an opportunity for us to reallocate that to other universities where demand exceeds their level.”

A letter to an education provider that I have seen says that this process could happen in April each year.

As a previous post noted, many international students start in the second half of the year rather than the first, reflecting the timing of academic years in source countries.

The cumulative student count model the government uses means that providers will want to warehouse empty places in first semester to leave room for second semester starts.

A real-time cap-and-trade model, that let providers sell places they believe they cannot use while enrolments are still underway, could result in a more efficient distribution of places. But a bureaucratic model cannot do this. There is no incentive for a university headed to under-enrolment to disclose their situation. By the time the bureaucrats know that there are places left – when students have not commenced studying – the main annual enrolment periods will be over.

If the government does not adopt a more sensible policy on how enrolments are managed through the year the student-friendly second semester start will have to be curtailed.

The timeline from here

The minister has recognised the need for amendments when the bill goes to the Senate. The Senate inquiry is due to report on 6 September, in which Liberal and Green senators will likely recommend further changes. With only 19 Senate sitting days left this year the timelines are tight to turn this bill into law.