Higher education is a pillar of Australia’s society and economy. However, the sector is at a crisis point.
Ministerial Direction (MD) 115, effective from 14 November 2025, is the federal government’s latest attempt to re-shape international education. The direction, the third since 14 December 2023, requires universities to comply with a strict National Planning Level that caps the number of international student places.
Its purpose, according to the government, is “to strengthen and balance distribution of international students across education providers in regional and metropolitan locations” in order to ensure sustainable growth, promote greater equity and prevent universities from becoming overly dependent on international student revenue.
It does so by sorting universities into three risk-based categories, which then determine the speed of international student visa processing. As a result, some institutions are seeing increased enrolments, while others, especially those placed in the second and third categories, are facing significantly reduced numbers compared to last year.
Universities will know their categories, but the direction gives no clarity on visa approvals once quotas are reached, beyond the vague statement that “processing will be delayed”.
When visa approvals become less predictable, students simply choose alternative destinations where the policy environment feels more stable. Australia’s universities, already facing fierce global competition, cannot afford this added uncertainty.
The direction also creates the potential for some students to choose universities for faster visas rather than quality, creating unintended consequences for both students and institutions.
Survival mode
In this context, MD115 and the debates surrounding it have highlighted a deeper and more uncomfortable problem: the way universities are being governed no longer matches the realities of how universities actually work – or what they need to survive. By restricting the international student pipeline without addressing the teaching and research funding gap, government policy has pushed universities into survival mode.
Thousands of academic and professional staff have been made redundant or are now in the firing line, with almost half of Australia’s universities undergoing major restructuring in the past year – with more expected. The latest example is the University of Technology Sydney, which has announced severe cost-cutting measures and the loss of approximately 2,400 jobs.
Further, Universities Australia Chief Executive Luke Sheehy warned that as many as 14,000 university staff could lose their jobs if international student visa approvals continue on their current trajectory. Instead of addressing this structural problem, current policy settings reinforce it. Yet financial risk is only one part of a much larger story.
For more than a decade, the federal government has progressively increased regulatory control over universities while failing to fund the core functions of a modern higher education system, especially research. This creates an impossible scenario: universities are expected to maintain world-class research performance, rise in international rankings and contribute to national innovation goals – while one of the main sources of revenue is being politically scrutinised through ‘managed growth’.
The direction exposes a fundamental contradiction: Universities cannot afford research without international student income, and Australia cannot attract international students without strong research performance.
By tightening enrolment limits without addressing the underlying research funding gap, policy is now pulling in two opposing directions.
The risk is a slow erosion of Australia’s global competitiveness at exactly the time when other countries – Germany and several Asian hubs – are expanding their research ecosystems and actively courting the same students. And this is now reflected in the most recent 2026 QS World University Rankings, where many Australian institutions have dropped, particularly in relation to a range of universities in Asia.
International students as partners
Another critical issue is that international students come to Australia as educational and life investments. They are here by choice. They contribute far beyond tuition fees. They enrich classrooms, fill workforce shortages, produce research outputs and often remain in Australia as skilled migrants. These students are not burdens to be controlled; they are partners in Australia’s economic, scientific and social future. And many are the citizens of the future.
The noise around recent policy changes – public messaging about unpredictable visa conditions, constant warnings about ‘over-reliance on international students’ and now rigid planning levels – create an atmosphere of ambivalence.
For students making life-changing decisions about studying abroad, perception matters. And right now, Australia risks looking less welcoming and less stable than its competitors. Instead of strengthening the sector, the new layers of regulation risk producing greater uncertainty and operational chaos.
Universities are left to navigate conflicting expectations: expand research, but without reliable funding; plan student numbers, but under shifting political conditions; maintain global standing, but with reduced flexibility; grow the economy, but with fewer tools to do so.
If the objective is to improve long-term planning, a more coordinated, whole-of-system approach is needed, one that aligns education, migration and research policy rather than treating universities as the administrative solution to broader migration anxieties.
Crucially, Australia must acknowledge that international education is not simply an export industry. It is a central component of the country’s intellectual and diplomatic infrastructure. When international students choose Australia, they strengthen research capacity, deepen global partnerships and bolster the future workforce.
Ministerial Direction 115 may be intended to bring order to the system, but, without a clear national strategy for research investment and sector sustainability, it risks accelerating the very uncertainty it is trying to control.
Australia’s reputation for quality higher education – patiently built over decades – could be damaged far more quickly than policy-makers expect. If we want international students to keep choosing Australia, we must choose them in return. This begins with coherent policy, stable funding and a clear recognition that universities are not the problem – they are part of the solution to Australia’s economic and knowledge future.
Hannah Soong is senior lecturer and sociologist in education at the Centre for Research in Educational and Social Inclusion, Education Futures, University of South Australia. Her research interests lie in international student mobilities, well-being and community engagement. Ian Hardy is associate professor of education in the School of Education at the University of Queensland, Australia. His work focuses on education policy and politics, including in schooling, university and vocational settings. Guanglun Michael Mu is a sociologist of education at the Centre for Research in Educational and Social Inclusion, Education Futures, University of South Australia. His current research programme revolves around international student resilience, well-being and community engagement. Keita Takayama is professor of comparative studies in education at the Centre for Research in Educational and Social Inclusion, Education Futures, University of South Australia. Ren-Hao Xu is a lecturer in the Graduate School of Education at the University of Western Australia. He is a recipient of Taiwan’s National Science and Technology Council Early Career Researcher Fellowship. His research focuses on higher education, policy sociology, and comparative and international education.
This article is a commentary. Commentary articles are the opinion of the authors and do not necessarily reflect the views of University World News.
