Australia’s decision to raise the cap on international students reflects the country’s strategic repositioning in the face of recent migration and economic pressures. While limiting the number of visas, the government seeks to maintain the competitiveness of the international education sector, one of the most lucrative for its economy. The renewed focus on students from Southeast Asia demonstrates a clear attempt to diversify the student base, strengthening regional ties and reducing dependence on countries like China and India.
Australia raises visa ceiling and aims for regional integration
Australia will raise its cap on foreign students by 9% to 295,000 next year and prioritise applicants from Southeast Asia, the government said on Monday. Limits on places were announced last year as a way to rein in record migration that had contributed to a surge in housing prices, with 270,000 places made available for 2025. An additional 25,000 places were being granted in 2026 as the policy was successfully bringing down “out of control” international student numbers, the government said.
“This is about making sure international education grows in a way that supports students, universities and the national interest,” Education Minister Jason Clare said in a statement.
Australia granted nearly 600,000 student visas in the 2023 financial year, as international students returned to the country in record numbers following COVID-19. Australia’s largest cohorts of students come from China and India.
The focus on Southeast Asia is part of a diplomatic strategy aimed at deepening regional ties. By encouraging exchanges with neighboring countries, Australia reinforces its cultural and educational influence, ensuring that international students take home Australian values and experiences, which is also aligned with the objectives of security and stability in the Indo-Pacific region.
New migration policy prioritizes balance and sustainability
As well as introducing the cap on numbers, the government also more than doubled the visa fee for foreign students in 2024 and pledged to close loopholes in rules that allowed them to continuously extend their stay. The government’s measures to curb migration were “bearing fruit” and allowed for a modest increase in the cap in 2026, International Education Assistant Minister Julian Hill said.
“The government has taken tough decisions over the last 12 months, not always loved by the sector, to get the numbers down and get them to a more sustainable footing.”
Increasing visa fees and closing loopholes reflect a more selective migration policy, aiming to protect housing and infrastructure while holding institutions and students more accountable.
Stricter criteria and focus on student housing
Larger, public universities would need to demonstrate domestic and international students had “access to safe and secure housing” and recruit more students from Southeast Asia to increase their individual allocations, the government said. It was important “for Australia’s future soft power that we continue to bring the best and brightest from our (Southeast Asian) neighbours to have a bit of Australia with them for the rest of their life”, Hill said.
Relations with Southeast Asia have been a focus of Prime Minister Anthony Albanese’s Labor government as it looks to reduce Australia’s economic dependence on China. Universities Australia welcomed the “sensible” increase in places. “Universities have called for growth in this critically important sector, and the government has honoured this,” CEO Luke Sheehy said.
International education as an economic and diplomatic vector
Australia has one of the highest shares of international students globally. The sector contributed more than A$51 billion ($33.05 billion) to the economy in 2024, the country’s top services export.
While strengthening its position as a preferred destination for international students, Australia demonstrates that the sector’s expansion will be accompanied by institutional responsibility. Requiring proof of secure housing and encouraging regional diversity among students reveal an effort to unite economic growth with public policies.
GCN.com/Reuters