Australia’s government will limit international higher education enrolments by instructing immigration staff not to process visa applications from people whose institutions have reached their overseas student quotas.

The government has sidestepped the opposition’s stonewalling of its foreign student cap bill by issuing a new ministerial direction effectively preventing officials from issuing more than 270,000 student visas next year.

The new “” also limits international enrolments at the institutional level by approximating the indicative caps that universities and colleges were allocated in August and September, when the government was trying to shepherd its legislation through parliament. Ministerial directions do not require parliamentary approval.

In a concession to educators, the new directive overrides the unpopular ministerial direction 107 (MD107) imposed a year ago by then home affairs minister Clare O’Neil.

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MD107 required officials to prioritise visa applications from students enrolled at institutions with low immigration risk ratings. This disadvantaged small, regional and outer metropolitan universities, which mostly have moderate risk ratings.

Under the new directive, visa applications will be processed in the order of submission until institutions are within 20 per cent of their caps, when processing will be slowed.

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Phil Honeywood, chief executive of the International Education Association of Australia, said the government had done “the right thing” in consulting with stakeholders about the changes. “This new ministerial direction will treat all providers more equitably and reduce some of the unfortunate impacts…that direction 107 created,” he said.

“Students who may have been holding off…while awaiting policy clarity should now apply with a greater level of confidence that they will be processed in a much more timely manner.”

Neil Fitzroy, Australian managing director of the Oxford International Education Group, said visa applications were down 44 per cent compared with late last year. “Students and their parents remain concerned and confused about the attractiveness and stability of Australia as a compelling study destination,” he said.

Mr Fitzroy said that while the new directive had come too late for students intending to start courses in early 2025, it could “rebuild confidence” for later intakes. “However, if the visa refusal rates remain stubbornly high, then caps and refreshed visa processes may be irrelevant…given there is limited evidence of demand.”

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Immigration expert Abul Rizvi said the government had been under political pressure to cap student inflows, particularly after the 18 December mini-budget increased this year’s forecast of net overseas migration (NOM) from 260,000 to 340,000.

“Students are the biggest part of our immigration [programme],” he said. “Where students go, immigration policy goes.”

Dr Rizvi said the real issue was not so much the inflow of students, which had already slowed over the past year, as it was the failure of many graduates to leave. He warned that former students could apply for asylum or remain illegally if they failed to secure permanent residence. Australia, unlike the US and Europe, had never previously contended with a “large undocumented population” of migrants, he said.

Treasurer Jim Chalmers acknowledged that NOM was falling more slowly than anticipated because departures had flatlined. “People are hanging around for longer,” he told a press conference.

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Mr Honeywood said education minister Jason Clare had “done the best he possibly could” for the sector in resolving the visa processing problems “within the constraints of a previous Cabinet decision and an opposition determined to make international students a federal election issue”.

john.ross@timeshighereducation.com