Australia’s ELICOS sector deterioration is just starting to flow through to Higher Education
Australian universities worried about their international enrolments may not be looking in all the right places. While attention has focused on visa settings, planning levels and shifting market demand, it’s the decline of English Language Intensive Courses for Overseas Students (ELICOS) that is increasingly becoming relevant to higher education commencements.
The ELICOS decline itself is well documented. Four successive visa fee increases, which now sit at AUD$2,050 – the highest globally[1] – combined with rising refusal rates have pushed ELICOS commencements to a 20-year low[2]. What is less documented and discussed is how this decline flows through to university enrolments.
The higher education risk sits in the high-conversion ELICOS markets
Department of Education pathway data shows a small group of markets drives most of the ELICOS to higher education pipeline (see Figure 1)[3]. China is dominant with 64 per cent of Chinese ELICOS students progressing to higher education, generating more pathway students than all other markets combined. India (44 per cent), Vietnam (25 per cent), and Indonesia (25 per cent) are the next most important contributors4. In these markets, ELICOS is a genuine stepping stone to a degree.
By contrast, other large markets like Colombia and Brazil have very low conversion rates of around 3 per cent, with most students studying general English rather than preparing for university. Their recent collapse has hit language providers hard, but has limited direct impact on higher education.
Figure 1 | ELICOS Commencements and pathways to HE
The real issue is that the high-conversion markets are now under pressure. Visa settings and softer demand have sharply reduced flows from China, India and Vietnam.
The difficulty is that pathway systems operate with long lags. Universities can continue recording healthy commencements long after the upstream pipeline begins to weaken. This helps explain why ELICOS providers have been reporting severe contraction while much of higher education has appeared relatively more resilient. The two sectors are observing different parts of the same pipeline at different points in time.
Not every university will be affected equally. Institutions with large direct-entry populations or strong brand-driven demand may see little impact. However, universities that rely heavily on pathway-based recruitment are likely to be more exposed. Some universities currently below their planning allocations may already be seeing the early effects of a much smaller ELICOS pipeline.
As ICEF Monitor has noted, the full impact typically emerges 6–24 month[1] after the initial decline. Strong 2025 commencements were largely supported by cohorts that entered ELICOS before the downturn. The much smaller 2024 and 2025 ELICOS cohorts are likely to place increasing pressure on enrolment outcomes in 2026 and 2027.
The ELICOS downturn goes beyond revenue to preparedness and diversification
The immediate impact is financial and its material. With fewer students coming through high-conversion ELICOS markets, sector-wide revenue at risk is likely in the order of AUD$190–250 million annually (based on estimated commencement losses, historic conversion rates and average international tuition fees), concentrated in institutions that rely on pathway cohorts and are already below their enrolment targets. This estimate though captures only the ELICOS-linked component of the shortfall. But as earlier degree cohorts complete and new higher education commencements remain flat, the broader annual revenue gap could plausibly be several times larger; potentially in the order of AUD$500–800 million annually.
But the implications extend beyond the financial. ELICOS pathways have also been a source of academically prepared students with stronger English, familiarity with Australian study, and higher completion rates in some institutions. Losing this cohort means a shift towards more direct-entry students who may require additional academic and language support.
There is also a diversification risk. In markets such as Vietnam, ELICOS has been one of the few reliable entry pathways into Australian higher education. As that pathway contracts, universities risk losing ground in precisely the markets policy settings are encouraging them to grow.
The ELICOS pipeline has never been peripheral. For many universities, it has been an important part of how international enrolments work. Universities that understand their pathway dependencies will be better positioned to respond. Those with significant exposure to Chinese, Indian and Vietnamese ELICOS pathways may face a more challenging recruitment environment over the next two years than current enrolment data suggests. After two years of contraction in the language sector, the effects are now starting to emerge further downstream. For some universities, the enrolment challenge facing 2027 may already be visible in today’s ELICOS data.
[1] July 2026; ICEF Monitor, ‘Australia: Student visa fee increases again’, July 2026.
[2] Australian Department of Education, International Student Monthly Summary, December 2025.
[3] Australian Department of Education, Education Pathways Visualisation tool, 2024–25 data
[4] ICEF Monitor, ‘Australia: Latest enrolment data challenges the government’s assertion of stability for international education this year’, March 2026
Dan Cragg is a Director at Nous Group, a management consulting firm with deep expertise in higher education strategy across Australia, New Zealand, the UK, and Canada.
