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Warnings against a putting a limit on international student places say the changes could put thousands of jobs at risk and seriously stifle university research efforts.
A draft bill announced in May by Education Minister Jason Clare would give him the power to set a maximum number for new international student enrolments for courses and providers.
Almost immediately, leading policy experts described the proposal as a 'recipe for chaos'.
Tara Cavanagh is the Group Manager of Immigration Policy at the Department of Home Affairs.
She says the laws introduced in the bill are necessary to better manage a migration system where people are using student visas to bypass the usual ways to get into Australia.
"There is evidence of exploitation of overseas students and of actors in the sector who seek to subvert Australia's migration and education systems to enable the entry of people into Australia for purposes other than study. This exploitation can range from providing poor-quality education products, to high student fees and false promises of pathways to permanent migration. The problem extends to grave instances of sex trafficking, bonded labour and slavery-like conditions for people entering the country on a student visa. Such activity and funding is supporting networks of criminal activity inside and outside Australia."
Speaking to a parliamentary committee scrutinising the bill, Universities Australia’s chief executive, Luke Sheehy, says the bill is politically motivated.
"The education services for Overseas Students Amendment Quality Integrity bill is for the most part is rushed policy. Universities Australia supports the Government's intention to maintain the integrity and sustainability of the international education sector, but we believe the bill as drafted, is more a political smokescreen than an instrument for good policy, as the government seeks to gain an upper hand in the Battle of migration ahead of the next election. Our main issue lies with the amendments that seek to control the number of international students our universities can enrol and what courses they can enrol in."
Since 2023, the government has introduced nine major migration policy changes affecting future and former international students.
Towards the end of 2023, the number of international students in Australia recovered after years of pandemic downturn.
Coinciding with rising rents and falling accommodation availability, the government stepped in to curb and potentially even reverse the rise in international students.
Vivek Arumugam is a student from Bangladesh, studying at Curtin University.
He tells SBS he initially struggled to find housing when he first arrived.
"So I came here one year back, so it was like quite difficult to get some accommodation. But after few months, i got to know where to get and so on. But few of the new students, they could not able to get so far. I know few of my friends were struggling to get so they have to make it easier. So a little bit because of house crisis, we know, it's like limited to us here. There is a lot of students in coming, so it's like little bit hard to get your accommodation."
Luke Sheehy says the links between Australia's housing crisis and rising international students is not supported by data.
"Both major parties are linking the post-pandemic return of international students - who they've encouraged back - to Australia's housing shortage. The facts and data do not support this argument. Housing data shows rental vacancies rates in suburbs around inner city university campuses are higher than the average of major cities. Further, the Student Accommodation Council has found that international students only make up four per cent of the total private rental market."
The legislation would allow universities to exceed the cap if they build additional student housing to free up pressure on the rental market.
The Group of Eight comprises Australia’s leading research-intensive universities.
The group says the cap will undermine Australia’s most successful and largest services export industry.
Group of Eight Chief Executive Vicki Thomson says the bill is draconian.
"This rushed and poorly-framed legislation is a classic example of retro-fitting policy to suit dubious politics. The rationale for capping international students chops and changes: it's either the housing crisis, cost of living, rental affordability, rental availability, redistribution of students to regional areas, or the removal of shonks, crooks and dodgy providers. What we do all agree on is an international education system, which is grounded in quality and integrity. And we are absolutely committed to a discussion around managed growth. But let's be clear, the archetype of shonks and crooks, is not representative of the university sector."
Among the numerous concerns raised by universities and other education providers is the impact the bill may have on university financing.
International students pay full fees at universities in Australia and make up the largest single source of income for many universities, excluding government grants.
Universities say they have already been affected by high rates of student visa refusals due to Ministerial Direction 107, especially in regional Australia, where universities have seen a major decline in international student revenue since the pandemic.
They say unintended consequences could impact regional Australia most of all.
Luke Sheehy says introducing caps will reduce the number of enrolments which will adversely affect the economy.
"The impact of having some 60,000 fewer international students arrive on our shores is significant. It would represent a 4.3 billion dollar hit to the economy and would cost the university sector alone over 14,000 jobs. Not to mention the flow-on effect for small businesses which heavily rely on international students."
For many international students, Australia is the destination of choice.
Hufaiza Nawaz is a student at Curtin University who hails from Bangladesh.
He was considering studying in Canada, but chose Australia for a number of reasons.
"The reason why I chose Australia is because it has like better living standards, better wages than Canada, better weather conditions, the timezone was a big factor for me as well, and flights are cheaper."
