New data has illuminated the explosive growth in?international education revenue that preceded the Australian government’s crackdown over the past 12?months.
The Australian Bureau of Statistics (ABS) has that higher education attracted the lion’s share of?the A$51?billion (?26?billion) the country earned from “education-related travel” in?2023-24, up?from about A$36?billion the previous year and a A$38?billion pre-pandemic peak in?2018-19.
The higher education sector absorbed almost A$16?billion of the A$21?billion that overseas students paid in tuition fees, and A$19?billion of the A$30?billion they spent on goods and services.
Altogether, the sector absorbed almost A$35?billion in export earnings, up from about A$14?billion at the height of Covid’s impact in?2021-22.
Late 2023 saw record growth in the award of study visas, following a surge of applications from would-be students who had been stymied by almost two years of border closures. Demand had also been magnified by the removal of limits on students’ paid work.
The federal government took steps last December to dampen student flows, rescinding recently announced extensions to post-study work rights. (MD107), introduced just three days later, created massive visa backlogs by forcing immigration officials to delay the processing of applications from students enrolled at institutions with inferior immigration risk ratings.
Representative body Universities Australia has estimated that MD107 cost the economy A$4.3?billion in its first six months alone. Chief executive Luke Sheehy said the ABS figures reflected earlier conditions, when “pent-up demand, delayed starts and higher living expenses” were still driving up growth.
He said a subsequent slump, revealed in?, had contributed to the “weakest non-pandemic” economic growth since Australia’s 1990s recession. International education earnings declined by 9?per cent, or A$1.2?billion, between July and September this year, compared with the corresponding period of 2023.
“Visa lodgements are currently down 39?per cent, a clear sign of the impact of MD107,” Mr?Sheehy said. “The changes to visa processing are already slowing commencements, and without action, we’ll see this reflected in the 2024-25 figures with fewer student arrivals and lower earnings.”
Immigration expert Abul Rizvi said it was no?surprise that 2023-24 had delivered record education earnings because it had produced the second-highest net migration in Australian history, exceeded only by the previous year. “Net migration of students is still at record levels,” he said.
Meanwhile, a November tweak to immigration risk ratings should benefit universities, with three institutions promoted from the worst “level?3” category to the moderate level?2 grouping.
The 20?November rewarded institutions for “improved” performance, while those whose metrics had deteriorated were?not given worse ratings, unless they were private vocational or English language colleges.
Risk ratings currently determine the order in which visas are processed, with MD107 still in force following the government’s failure to?legislate its proposed international enrolment caps, although it is expected to be?changed or?replaced before the year’s end.
The ABS report says education exports increased in every state last financial year, accounting for two-thirds of the nation’s earnings from travel. Educational income rose by 40?per cent from China, 50?per cent from India and over 90?per cent from the Philippines.
