As reported by TKN the morning (National Planning Level (Caps) for 2025) Announced) the Government has released long-awaited details on ‘enrolment caps’ to be placed on new commencing international students. In a move that will shock no-one, the Government waited until the conclusion of yesterday’s Senate Committee hearing into the ESOS Amendment Bill to make its announcement. We take a deeper dive into the Government’s announcement below, and the devil is in the detail.
New terminology
The Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 introduced the concept of ‘enrolment limits’ which have also been widely referred to as ‘enrolment caps’ within the sector. However, the Government’s announcement Improving the sustainability of international education, introduces us to two new concepts, National Planning Level (NPL) and International Student Profile (ISP).
National Planning Level (NPL)
- The NPL sets a total number of new international students for the 2025 calendar year of 270,000
- The NPL is divided between higher education and the vocational education and training (VET) sectors
International Student Profile (ISP)
- Individual higher education provider limits will be outlined in an ISP, and public universities have been already sent their indicative ISPs for 2025. This term doesn’t seem to be applied to VET providers.
New overseas student commencements (NOSCs)
- An international student will count as a new overseas student commencement when they are onshore and start their first non-exempt course at their first provider. This includes each time the student changes into a non-exempt course at a different provider.
Provider Limit
- The enrolment limit or cap.
Unpacking the numbers
Public higher education
- 145,000 new international commencements in 2025 for publicly funded universities
The announcement states that the 145,000 new international commencements in 2025 for publicly funded universities is ‘around 2023 levels’. Using the international student pivot table data, there were approximately 152,000 new higher education commencements in 2023, excluding higher degree by research. Because of limitations of the pivot table, this number includes the other excluded groups (see the list below), so those numbers just about check out.
But as they say, the devil is in the detail.
In letters that have been sent to universities, and seen by Koala, the methodology for calculating the ISP starts with an initial limit that “has been established using the 2019 number of new overseas student commencements”. The formula goes on to consider growth between 2019 and 2023.
An ‘international concentration’ metric (the devil?) is applied to growth between 2019 and 2023. This metric effectively acts as a ‘penalty’, as the higher the concentration of onshore international students, the lower the amount of growth is added to a university’s final ISP.
There are other considerations included in the ISP methodology for smaller providers and where new overseas student commencements fell between 2019 and 2023.
Individual providers will be scrambling to understand what this means for them, however without publicly available 2023 data, Koala is unable to calculate the exact impact. What we can determine is that to reach the 145,000 providers who grew fast between 2019 and 2023 and have large concentrations of international students, will be penalised at the expense of those who didn’t and don’t.
Private university and non-university higher education provider methodology
- Around 30,000 in 2025 for other universities and non-university higher education providers
Unlike public universities, the methodology for private and non-university higher education providers starts with reference to 2023 or 2024 new overseas student commencements, depending on the position of the provider in those years. Different adjustments are made depending on if the provider is a TAFE or non-TAFE provider.
VET
- Around 95,000 new VET international student commencements in 2025
- Providers with a higher ratio of international students will receive a lower allocation, encouraging them to diversity their student base
The VET sector, and particularly private providers, appear to have been hit with a significant body blow by the aggregate 95,000 new international student commencements figure. Using the international student pivot table data for 2023 there were just over 190,000 new commencements in the VET sector, or double the new target set by the government, and in the May data, year-to-date 2024, there have already been just over 103,000.
Private VET sector providers will also be penalised if they have high concentrations of international students. In letters sent to providers by the Secretary of the Department of Employment and Workplace Relations (DEWR), and seen by Koala, private VET providers with an international student population of more than 80 per cent in 2023 will have a lower 2025 allocation. Private VET providers with an international student population of less than 80 per cent of 2023, will have an enrolment limit set at approximately their 2024 level.
The limit for TAFEs will be closely aligned to 2023 commencements, according to the letters sent out.
However, it appears that VET providers will have to wait for details, with DEWR indicating that new overseas student commencements won’t be provided until after the legislation passes: Subject to passage and Royal Assent of the ESOS Bill, the department will write to providers to provide international student allocations for 2025, and further information about the VET sector distribution methodology.
Carve outs and exemptions
Parts of the sector will be relieved by the exclusions that have been made from the NPL:
- School students
- Higher degree by research students
- Students undertaking standalone English language courses (ELICOS)
- Non-award students, including short-term exchange students
- Australian Government sponsored scholars
- Students that are part of an Australian transnational education (TNE) arrangement or twinning arrangement
- Key partner foreign government scholarship holders
- Students from the Pacific and Timor-Leste
What is missing from the exclusions?
One of the more surprising groups to miss out on any special consideration are regional providers. This includes the Northern Territory, despite what now appears to have been a premature announcement by the newly ousted NT Chief Minister, Eva Lawler, who said last week prior to the NT election on Saturday that “The Territory will be exempt from any cuts to international students”. (See TKN’s report here).
Pathway providers will also be disappointed that they have not been excluded from the NPL. I made the point in my opening statement at the Senate Committee hearing into the ESOS Bill yesterday, that “Having led a pathways college, I also know from experience that pathway students don’t always progress in line with their study plan, leading to delays in starting their degree. If a university has kept a place under their cap for a student who is delayed, they may look less favourably on these pathway arrangements in future. This not only impacts pathway providers, it also impacts a whole cohort of students”.
In a positive move, TNE and twinning arrangements have been excluded from the NPL, but this has not been extended to the vast array of articulation arrangements that exist between, mostly, universities and international counterparts. Some of these articulation arrangements are years, and sometimes decades, old which could seriously impact the bilateral relationships between institutions and their international partners if these arrangements are de-prioritised over full-degree students.
How this will be managed
The management of caps has long been a concern of Koala and I also covered it in my opening statement to the Senate Committee (see my LinkedIn post if you’re interested in reading my concerns, I predict disaster to be forthcoming). In another layer of complexity, the Department of Education will manage higher education provider limits and DEWR will manage VET sector provider limits.
A Factsheet on Implementing Provider Limits in Prisms provides some further information:
- PRISMS, via Confirmations of Enrolment (CoEs), will identify if an NOSC fits into a Provider Limit
- Students who move courses within a provider, or commence a subsequent course at the same provider immediately after the first course, will not be counted as an additional NOSC.
- PRISMS will identify whether a CoE is in an exempt category
- The NOSC counts towards the Provider Limit ‘on the date the CoE moves to the ‘Studying’ status’
This last dot point has me scratching my head. If I read this correctly, providers will be able to continue to issue CoEs at will, above their NOSC if they choose, if they are willing to wear the consequences if too many students turn up to enrol.
It’s unlikely that the sector will be reassured by the Factsheet’s statement that the Department of Education will be updating PRISMS to support implementation of these changes, given its history and new arrangements coming into force in less than 4 months.
2026 and beyond
No details are provided in the announcement about the Government’s intention for 2026 and beyond other than the motherhood statement, Arrangements for 2026 and beyond will deliver sustainable growth in international student numbers to ensure the sustainability of the sector into the future.
What else does the announcement say?
- This will bring the number of new international student commencements, across higher education and VET, back to pre-pandemic levels.
- The Government is determined to strengthen the integrity of the sector and ensure it maintains its social licence. Our reforms will do that and ensure a managed international education system designed to grow sustainably over time.
On these two points, no evidence has been provided by the Government why pre-pandemic levels are the ideal level, or if this number will indeed ‘ensure it maintains its social licence’.
- From 2026, the Albanese Government will encourage universities to create new supplies of student housing to benefit both domestic and international students as part of their future growth.
It is unclear why 2026 or what the definition of ‘encourage’ means. Watch this space.
The timing
The NPL is subject to the passage of the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 through the Senate and assumes no amendments to the current draft legislation.
The Senate’s Education and Employment Legislation Committee is due to report on its inquiry into the ESOS Amendment Bill on 6 September. Both houses of Parliament sit the following week, 9-12 September. Although it is hard to see how the Committee’s report can be considered, the Bill debated in the Senate, passed by the Senate (with or without any amendments), then sent back to the lower house for passage that week, it may not be impossible.
If this doesn’t occur, then the Bill could be debated when the Senate sits from 16-19 September. Both houses sit again from 8-10 October, which is when it would potentially pass through the lower house. It then needs to receive Royal Assent.
Ministerial Direction 107
The announcement confirms that the NPL will replace Ministerial Direction 107, but there are two things to note from the wording: Subject to the passage of legislation, from 1 January 2025, this new system of managed growth and enhanced integrity measures will result in the replacement of Ministerial Direction 107.
The revoking of Ministerial Direction 107 is ‘subject to the pass of legislation’, so if the Senate blocks enrolment caps being imposed the government is signalling (threatening?) that MD107 may be here to stay, despite the crippling impact it has had.
It also refers to 1 January 2025, which is when the new legislation will come into force if it is passed. Leaving Koala to infer that the sector may have to endure MD107 for the better part of the 2025 recruitment process, meaning enrolment limits will be irrelevant for some providers if trends continue.
Government isn’t listening
One thing is clear from the announcement, the Government hasn’t been prepared to take onboard any of the overwhelmingly negative feedback it has received about imposing enrolment caps.
The Government might not be listening, but Koala is, and we thank everyone who has reached out today to help us digest the announcement.
