In August, the Australian government announced that, pending approval of proposed legislative amendments, a cap on new international student commencements will go into effect in January 2025. The cap – formally, the National Planning Level (NPL) – will apply to the higher education and vocational education (VET) sectors, and we’ve just learned how profoundly the cap will be felt by private VET providers. Those institutions accounted for 57% of all international student enrolments in Australia in 2023.
2025 cap allocations for VET
The initial government announcement stated that out of all the new spaces available to international students under the NPL, the VET sector is to receive 95,000, compared with 145,000 for public universities and 30,000 for other universities and non-university providers.
On Friday night last week, individual private VET colleges received letters informing them how many spaces they would receive out of that total VET allowance. Many of those providers will be devastated by their allocations. Some have been informed they can receive less than half the number of new students they welcomed in 2023.
Quality providers see allocations slashed
Many of the providers whose allocations are particularly low are schools that have committed the most to quality assurance and sustainable recruiting and enrolment management. As reported in The Koala News, one college has been told that its new student allocation would be three spaces, and said: “This makes all our investment in becoming a CRICOS provider, as well as investing in all the infrastructure and systems in compliance with legal requirements a complete waste of time and resources.”
Closures and job losses are imminent
Troy Williams, the chief executive of the Independent Tertiary Education Council Australia (ITECA), which is the peak body representing independent higher education, vocational education, and skills training providers, said:
“College closures are now inevitable, and ITECA members lay the blame squarely at the feet of Australian Government politicians responsible for international education policy.”
Mr Williams believes up to 300 independent colleges will close and noted: “Their employees will lose their jobs, as will other employees in colleges that will have to scale down to survive …. There is a widespread and chilling belief within the ITECA membership that Australian Government politicians simply do not care about the livelihoods they are destroying.”
Many of the colleges at risk of closing due to the NPL deliver programmes that provide students with the skills most needed by the Australian economy – such as aviation, aged care and healthcare.
The Koala News spoke with several college representatives who made it clear just how drastically their commencements will fall in 2025. One exclaimed: “We had more than 50% domestic students in 2023, and in 2024, we had 350 new commencements in VET Intl. We have been given a cap of 169!”.
Australian Securities Exchange-listed EDU Holdings, which runs ALG vocational schools in Brisbane, Melbourne, and Sydney, received 447 new international student commencements – which amounts to a 51% cut compared with 2023 and about a 57% decline from projected 2024 commencements.
The strong link between commencements and enrolments in the VET sector
Claire Field of Claire Field & Associates (a firm that offers strategic support to Australian institutions across the tertiary education sector), explains why the NPL is so crushing for VET providers:
“The reason why the caps are so damaging to VET providers is that in VET ‘new students’ are almost the same as ‘total’ students in any given year because many VET course are only ~12 months long.”
Ms Field said that the devastation is such that “a senior executive was admitted to hospital following a nervous breakdown – after their institute was given a cap which is just 15% of their normal student numbers (i.e., their approved CRICOS capacity).”
The English-language sector has also been hit
The NPL is not meant to affect the English-language sector (ELICOS), but nevertheless it has because some ELICOS providers also deliver vocational programming.
Ian Aird, CEO of English Australia, wrote on LinkedIn:
“English Australia has already spoken with a number of member colleges who also deliver vocational programmes. For some, these enrolment caps for 2025 are devastating. Right now, our chief concern is the people badly impacted. We are hearing that in some cases the limits are so bad as to mean imminent campus and college closures, significant job losses, and students ejected with nowhere to go. So soon after the COVID border closures caused devastation, after the massive effort to survive and bounce back, we know this will be not just a financial blow. This is emotionally devastating.”
What is to be done?
According to ITECA, “the Australian Government needs to rethink its approach to consider the impact on the sector more completely, restoring an evidence-based approach to policymaking.”
In the meantime, CEO Troy Williams says:
“The most sensible thing to do, given the proximity to the 2025 academic year, would be to delay the commencement of the caps for at least six months. This allows the Australian Government to be transparent in its methodology and develop a sustainable approach that supports quality [Registered Training Organisations] and the people they employ.”
Billions at stake
In 2023, international students contributed AUD$41 billion to the Australian economy. Given that 57% of all international student enrolments in Australia in 2023 were in private VET providers, the combined impact of drastically reduced new student commencements and hundreds of NPL-related institutional closures may remove billions of dollars from the economy going forward.
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