Lingering policy uncertainty is leaving Australian university administrators with little choice about cutting jobs and courses, according to the head of the representative body for international education.

Phil Honeywood said universities¡¯ chief financial officers (CFOs) were ¡°probably overreacting¡± to the risks that rule changes in international education posed to their revenue. But CFOs were obliged to plan for the worst, and vice-chancellors had to take heed.

¡°We¡¯re all crystal-ball gazing at the moment,¡± said Honeywood, CEO of the International Education Association of Australia. ¡°CFOs¡­want policy clarity, and in its absence, they are all rewriting their revenue scenarios [anticipating] significant forward declines in their overseas student revenue.

¡°Any CFO worth their salt doesn¡¯t want to be caught napping by their governing council. They have to project five years in advance. If the CFO is in the vice-chancellor¡¯s ear [about the] revenue base¡­then the vice-chancellor is going to have to pay attention. This is a fundamental reason for course closures and job redundancies.¡±

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Many publicly funded universities have recently launched cuts, often blaming last year¡¯s policy changes to international education, even though all but one increased their earnings from foreign students last year. In 2025, international higher education enrolments had exceeded 500,000 by July ¨C a record for the first seven months of the year.

However, 2 per cent fewer new overseas students began courses between January and July than in the corresponding period of 2024, and steeper declines may lie ahead. Over the seven months, the number of visa applications lodged from overseas for higher education study was 16 per cent lower in 2025 than 2024.

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Despite this, an Education Department suggests that public universities are likely to exceed their limits on new international education students under ministerial direction 111 (MD111). By 19 September, 132,900 of a permitted 145,300 new foreign students had commenced their courses.

Another 5,700 overseas students had been accepted for enrolment, with 2,900 of them already granted visas, leaving the sector about 5 per cent shy of its quota with more than 25 per cent of the year remaining.

One reason for the better-than-expected showing is that universities can exceed their institutional quotas with impunity. Unlike the hard student caps proposed last year, MD111 prescribes no penalties for over-enrolling foreign students.

Universities go into a slow lane for visa processing once they have achieved 80 per cent of their allocations, but they can continue enrolling students. Honeywood said some institutions were up to 40 per cent above their quotas. Meanwhile, 10 of the 38 publicly funded universities remain in the visa processing fast lane ¨C indicating that they are still at least 20 per cent below their quotas.

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This laissez-faire approach appears set to end. Honeywood said the government was likely to introduce a third, even slower visa processing lane for institutions that had reached their full quotas.

This would be a significant disincentive for universities to ¡°over-recruit¡±, he said, because they would not want to gain a reputation as places where visas took ¡°months¡± to process.

Education minister Jason Clare has also signalled that the Australian Tertiary Education Commission (Atec) will enforce the international quotas when it assumes control of student place allocations in 2027. ¡°In the compacts that they design with each university, [Atec will] help to make sure that universities meet but don¡¯t exceed those numbers,¡± Clare .

Yet another concern for universities is an imminent reset of the risk ratings that dictate whether applicants must include evidence of their financial capacity and language skills in their visa paperwork.

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Currently,?only 14 of the 38 publicly funded universities have the lowest risk rating, which exempts applicants from including these details. The other 24 institutions have moderate risk ratings, meaning that evidence of financial and language capacity is required from applicants in countries deemed high risk ¨C including Colombia, Kenya, India, Nigeria, Pakistan, the Philippines, Thailand and Vietnam.

Honeywood said universities in the latter group would need to recruit conservatively to avoid further damaging their ratings when the system was updated, which usually happens in September.

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He said he expected the political antipathy towards high overseas student numbers to subside following the Labor government¡¯s emphatic victory in the May federal election. ¡°But are [university administrators] going, on a wing and a prayer, to be more optimistic? They¡¯re going to be more pessimistic, I think.¡±

john.ross@timeshighereducation.com