Senate inquiry submission on mass cancelling courses for international students, banning new higher education providers, and Indigenous demand driven funding for medical courses

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Update 28/11/2025: The Senate passed some amendments to this bill. These are noted in the original posts.

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Senate inquiry submissions are due on Friday for the Education Legislation Amendment (Integrity and Other Measures) Bill 2025.

I am releasing my late draft submission in case it helps people finalising their own submissions and to identify any errors or omissions on my part.

Update 17/11/25: Final submission on the Senate committee website.

It builds on my three prior blog posts on the subject – on mass cancelling courses for international students, on a de facto ban on new higher education providers, and on extending Indigenous demand driven funding to medical courses.

Mass cancelling CRICOS course registrations

The main new content in the submission is description of existing legislative powers that can achieve the same claimed policy goals as the course cancellation proposal.

The practical effect of the bill, if it passes, would be to enable the suspension of the rule of law. It would allow the minister to make decisions according to vague criteria, without consulting anyone or considering other relevant laws. Due process would be abolished; providers could be penalised with course cancellation even if they have followed the law and acted ethically at all times.

It shocks me that this Trump-style bid to rule by executive order has even been introduced into Parliament. It’s staggering that, given nearly a year to think again since its original defeat last year, the government has brought back a bill that is, in some places, even more defective than their first attempt. I am referring here to removing the requirement to consult TEQSA or ASQA before cancelling a course on ‘standard of delivery’ grounds.

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Is the government introducing a de facto ban on new higher education providers?

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Update 28/11/2025: Last night the Senate accepted Coalition amendments that exempt higher education providers and TAFEs from the requirement to offer courses to domestic students for two years before being eligible to offer courses to international students. So effectively the provision discussed in this post applies only to non-TAFE registered training organisations. As I noted in the original post, offering courses to domestic students for two years is much easier for RTOs than higher education providers. Large numbers of RTOs have already met the requirement and could move into international education.

While this is good news, enrolment caps the government will try again to legislate next year could prove another insurmountable obstacle to education providers of any kind entering the international market.

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Last week Claire Field published an interesting overview of 15 new higher education providers since January 2024. But growth of this kind would become very difficult if the government’s ESOS amendment bill passes unamended. It would limit registration of new providers offering courses to international students. This post examines whether the proposed restriction would, in practice, be a de facto ban on new higher education providers.

Under the ESOS amendment bill providers could not offer courses to international students without first delivering courses to domestic students, but providers are generally not competitive in the domestic market without offering FEE-HELP loans. But to get access to FEE-HELP, providers must demonstrate experience in delivering higher education – in practice usually by teaching the international students the ESOS bill would stop them recruiting.

Legislative references are to ESOS Act 2000 section numbers, as they are or would be if the amendment bill passes unchanged.

The proposed changes

The ESOS amendment bill would give the minister the power to suspend, for up to 12 months, applications and processing of applications for course and provider registration: sections 14C to 14F.

To be registered on CRICOS to offer courses to international students the provider must have delivered courses for consecutive study periods over at least two years to domestic students in Australia: section 11(2).

This post focuses on the section 11(2) change by looking at how providers have entered the international and domestic markets in recent years.

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The education minister should not have the power to cancel ‘classes of courses’ for international students

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Update 28/11/2025: Last night the Senate passed the ESOS amendment bill with Coalition amendments. While I still believe this provision counts as very poor public policy – for reasons exanded up in my Senate inquiry submission – the Coalition changes do improve things somewhat. These are noted in the text below.

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The government is having another go at its 2024 Education Services for Overseas Students (ESOS) legislation, reintroducing it earlier this month minus the enrolment caps that saw it blocked in the Senate last November.

This post draws on and adds to things I wrote last year about proposed ministerial powers to suspend and cancel ‘classes of courses’.

The amendments discussed in this post were partly why I regarded the 2024 ESOS amendment bill as the single worst piece of higher education related legislation to come before the Parliament in my career.

What took it beyond standard bad policy was its use of broad ministerial discretion with minimal constraints on how it is exercised. That creates rule of law problems, making it hard to know in advance what the rules are. If passed, the amendments could lead to some education providers being arbitrarily punished for the actions of others.

Legislative references are to the section numbers of the ESOS Act 2000, as they are or as they would be if the bill passes unamended.

A mass course cancellation power

The bill gives the education minister power to simultaneously suspend or cancel multiple ESOS course registrations at multiple providers: division 1AB. It does this by making the unit of regulation a ‘class of courses’ – the definition of which is discussed below.

This mass cancellation power differs from existing laws that give the ‘ESOS agency’ (TEQSA in higher ed, ASQA in VET) power to suspend or cancel the registration of specific courses or specific providers: sections 83 to 92. It also differs from the current power of the immigration minister to issue a ‘suspension certificate’ to a provider. This can be done in specified circumstances such as fraud in visa applications, students breaching visa conditions, and other visa issues: sections 97 to 103.

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Student income support and the labour market

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For the first time in years higher education student income support recipient numbers have increased. On a late June count, in 2025 147,490 students were receiving payments, up 10,575 or 7.8% on the same time in 2024. All three benefit programs – Youth Allowance, Austudy and Abstudy – increased numbers but 70% of growth came from the dependent Youth Allowance category, so people aged 21 years or less subject to a parental income test.*

Trends in total numbers

Although the 2025 upward trend is noteworthy given the recent history of decline, 147,490 recipients is still lower than any year in the 2009-2022 period. It’s nearly 73,000 below the 2014 peak, despite an increase in enrolments since then.

Policy decisions influence student income support numbers, but cannot fully explain these trends. The most significant negative policy change since 2014 was the 2016 conversion of the Start-up Scholarship to a loan, effectively reducing the non-repayable grant value of student income support by $2000 a year. But a downward trend started before then. Subsequent policy changes were small positives for students without, until 2025, stopping the decline in recipient numbers.

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Demand driven funding for Indigenous medical students – is it a good idea?

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In line with a 2025-26 Budget commitment, the government has introduced legislation for demand driven funding of Indigenous medical students from 2026.

While well-intentioned, this policy is unlikely to make any significant difference to Indigenous medical student numbers and could accidentally reduce the number of non-Indigenous medical students.

Is there a problem that demand driven funding can solve?

In his second reading speech, the minister noted the current low number of Indigenous doctors and the benefits for Indigenous patients of Indigenous health care workers.

As with the earlier demand driven system for Indigenous bachelor degree students, however, it’s not clear that a shortfall in Indigenous doctor numbers is a problem that demand driven funding will solve.

Universities already try hard to recruit Indigenous medical students, with special entry schemes and quotas in some cases. On the available data (below) they are having some success, a source of pride for the medical deans association. 3% of domestic medical students are Indigenous, compared to 2.3% of the overall domestic student population.

The main obstacle to further enrolment increases is unlikely to be funding rather than the difficulties in finding potential students who meet the entry requirements and are not being set up to fail.

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The last university over-enrolment crackdown – some possible lessons

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As announced last year, the government plans to crack down on so-called ‘over-enrolments’ – enrolling additional students on a student-contribution only basis once all a university’s Commonwealth Grant Scheme allocation has been used.

When a proposed new funding system is in place, from 2027, student contribution-only places will only be possible in a buffer zone above a university’s Australian Tertiary Education Commission allocation. 2% and 5% buffers have both been suggested. Currently over-enrolled universities will receive some additional funding to bring over-enrolments within their official allocation of places. However, this will not in all cases reduce over-enrolments to the permitted range. Significantly over-enrolled universities need to moderate student intakes in 2026 to bring their medium-term enrolments down.

Not many current Department of Education staff were there the last time a minister thought reducing over-enrolments might be a good idea. The story is worth telling.

Brendan Nelson and over-enrolment

From November 2001 to January 2006 the education minister was Brendan Nelson, a Liberal. Nelson was worried about the quality implications of significant over-enrolments. The first reference I can find to Nelson’s concern is in a media release from December 2001, a month into his term.

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2024 graduate employment outcomes and early 2025 trends

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The 2024 Graduate Outcomes Survey finally came out this week. As recently as 2021 the GOS came out in the year it covered, not September the following year. The government’s inability/refusal to release data in a timely way means that we need alternative sources of information for sector-relevant trends. This post reports on the GOS and brings in job advertisement and ABS data.

2024 graduate employment results

What I found in alternative sources for 2024 graduate outcomes made me concerned. The ABS labour force survey showed a downward trend in employment for young graduates. If this was right, was it cyclical or something more structural, such as AI reducing entry-level employment? A couple of recent US studies, one specifically looking at recent graduates, suggested an AI impact.

In May 2025, Callam Pickering looked at online job ads for graduates. He found that ads mentioning graduates declined in 2024 compared to 2023 – although they still exceeded 2019 levels. At least to March, ads for graduates in 2025 were tracking below the same months in 2024.

Fewer job ads targeting graduates cannot be good news, but I am not sure how important these are to the overall graduate labour market. There would be jobs typically taken by recent graduates that are not part of graduate programs or exclusively marketed to graduates. As work-integrated learning becomes more common, are firms increasingly hiring people they already know, recruiting graduates but not using advertising to find them? In analysis based on the 2023 GOS, but only graduates from institutions that had paid extra for WIL questions, 19% of people with new undergraduate qualifications said they had secured employment with a WIL employer and another 10% through a network contact made during their WIL experience.

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The future of voluntary HELP repayments

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In recent years voluntary HELP repayments increased significantly, peaking at $2.9 billion in 2022-23, before dropping back to $992 million in 2024-25 (according to data released last week). This post looks at why voluntary repayments spiked and what we can expect for future years.

The spike in repayments – indexation

The 2022-23 and 2023-24 big repayment spikes in the chart above are primarily due to people repaying early to avoid high CPI indexation.

With CPI now back to normal levels this should be much less of a factor in the foreseeable future. That said, to reduce indexation costs HELP debtors considering a voluntary repayment should still make it prior to the 1 June indexation date.

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Why is demand for mature-age undergraduate education shrinking?

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I have an article in The Conversation this morning on why demand for undergraduate higher education has been weak in recent years. I looked at school leavers in this July 2025 post. This post expands on the issue of mature age demand.

Applications

Demand from school leavers is soft but in 2024 was down only 3% on its 2017 peak. But demand from 20-24 year olds is down over the same period by 22% and for the 25 years + age group it is down by 27%. In absolute numbers, demand from school leavers fell by 6,057 applications compared to 44,545 fewer applications from mature age applicants.

Commencing enrolments

For commencing bachelor degree enrolments 2017 to 2023, unsurprisingly given the applications data, demand has also fallen by the most in the older demographics.

School leaver commencing enrolments are down 4% while the figures are 18% for the 20-24 years group and 27% for the 25+ group. Overall 6,216 fewer school leavers but 26,276 fewer mature age students.

Counter-cyclical enrolment patterns

An applications/enrolment spike in the COVID lockdown years provided evidence for one side of the counter-cyclical theory of enrolments – that more people study when jobs are hard to find. Weak labour markets reduce the ‘opportunity cost’ of education, such as forgone work and wages.

Conversely strong labour markets increase the opportunity cost of study. On average this is especially so for older people, due to their wage premium from previous labour market experience. With a strong labour market since 2022 economic theory predicts that, all other things being equal, enrolments will decline.

In the chart below we can see full-time employment for 20-29 year olds who have completed Year 12 but have no degree was at its lowest level in 2020, in the 2015-2025 period for which we have education levels in the labour force survey. In the initial post-COVID lockdown period, however, we can see that it was much easier than it had been in the 2010s to get a full-time job with a Year 12 qualification only.

The 2020s has provided evidence in favour of the counter-cyclical theory of higher education enrolments.

But does a cyclical theory of enrolments fully explain declining mature-age commencements?

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University under-enrolment in the COVID and after years

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Recently the Department of Education published 2021-2022 data on payments under the Higher Education Continuity Guarantee, a 2021-23 Coalition program to compensate universities for under-enrolments. It has previously released data on a predecessor program, the 2020 Higher Education Relief Program.

It shows that over the 2020 to 2022 period under-enrolments cost the Commonwealth nearly $550 million. On my estimates the sector under-enrolled by approximately 47,000 places. Eight universities were under-enrolled in each of 2020, 2021 and 2022. Only four universities received nothing under the HECG or HERP, showing that enrolment shortfalls were widespread across the sector.

What is under-enrolment?

Under the Higher Education Support Act 2003 universities get paid their maximum basic grant amount (MBGA) – see my funding agreement posts for more detail on this – or the value of their Commonwealth supported places delivered (on a relevant Commonwealth contribution * EFTSL basis), whichever is lower.

During the COVID period the Coalition decided that it would let universities keep their MBGA even if they had not enrolled enough students to justify it. This was called the Higher Education Relief Program in 2020 and the Higher Education Continuity Guarantee 2021-2023. The purpose was to provide stability for universities during COVID and post-COVID enrolment turbulence.

There is a 2024-2025 program called the HECG, but it is a redirect of money to equity programs and has nothing to do with the original purpose of the HECG.

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