A cap-and-trade system for international student places

In an earlier post I argued that the government’s plans to cap international student numbers, including by education provider and course, would cause actual enrolments to fall well below the official maximum number.

This is due to the inherent weaknesses of bureaucratic systems of student place allocation. Even when meeting demand is a goal the limited information held by central planners, and the long time lags between allocations and enrolments, will cause student places to remain unused.

This post proposes a partial remedy to this problem, a cap-and-trade system for international student places.

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Limits on international student numbers could reduce enrolments to well below the official cap

I am not opposed to changing international student migration rules and education provider requirements to moderate problems long associated with international education, including “dodgy” colleges, inadequate student preparation, student poverty, student exploitation and “permanently temporary” migration.

Multiple steps towards minimising these problems have already been announced or taken, with increased financial requirements for a student visa added last week. Most changes announced before last Saturday are justifiable.

But capping international student numbers including down to a course level, as announced over the weekend, is a bad move.

The caps will face all the problems I have identified with bureaucratic allocation of domestic student funding. Because numbers will be allocated between universities and courses according to a politician or bureaucrat’s view of where students should enrol, rather than where students want to enrol, actual enrolments are likely to be well below the capped level.

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