Last week’s The PIE Live Asia Pacific event on the Gold Coast brought sector leaders together to ask a hard question: do recent announcements signal the start of broad recovery (for both the currently blessed AND the inexplicably damned) – or another false dawn? Hardly had delegates returned to their desks when a long-awaited government announcement landed in inboxes, setting fresh expectations.
For those outside Australia, here’s a quick refresher: it’s been 454 days since the government first revealed plans to cap international student numbers. Four days ago, officials announced an increased National Planning Level – often referred to as a “soft cap” – for 2026.
The intervening period included a federal election marked by damaging narratives: international students labelled as “cash cows”, unfairly blamed for systemic issues; education agents painted as “racketeers”; and fierce competition stoked between education sectors, sometimes even across providers. This turmoil has sown confusion and undermined confidence in Australia as a study destination.
It’s important to remember Australia is far from alone in navigating complex policy shifts; as IEAA’s Phil Honeywood recently observed, “optimism [in Australia] is partly a reflection of the poor state of the sector in other study destination countries: the US, Canada and increasingly the UK.”
Yet, despite this turbulence, interest in Australia remains high. At the aggregate, student numbers appear stable – but the reality is far more uneven. Vocational education and training (VET) and English language (ELICOS) programs have seen sharp declines, forcing several established providers to close their doors. Higher education enrolments remain buoyed largely by Chinese students enrolling in leading public universities along the eastern seaboard, but this dynamic intensifies issues around market concentration.
Outside these major players, regional universities and independent higher education providers alike generally recognise the government’s current visa management tool – Ministerial Direction (MD) 111 is “less bad” than its predecessor MD107, though that’s hardly high praise. Crucially, MD111 has not yet been tested through a cycle which includes the major intake of the antipodean year – and neither will it now be given its own imminent replacement.
Although replaced, the impacts of MD107 are still felt – many prospective students clearly understood the implications of those policy settings. That, irrespective of their preferred provider (whether university, independent higher education or other), their assured route to Australia study was via a public university with opportunities for transfer to their intended provider once onshore. This has created a secondary market onshore – one much larger and more nuanced than under normal policy settings.
Recruiting onshore presented a viable pathway to survival for providers unable to recruit with confidence offshore given de-prioritisation and subjective visa refusals (courtesy of MD107 and its partner MD106). However, it has also created a sizable opportunity for unethical behaviour and poaching by other bad actors.
This week’s announcement of increased “National Planning Levels” for 2026 is a positive signal, but it falls short of providing certainty to many, especially independent VET and ELICOS providers still facing precarious futures. Crucially, many key elements remain unresolved, including the replacement of MD111 and the anticipated reintroduction of amendments to the Education Services for Overseas Students (ESOS) Bill.
These frameworks will include determination as to who is considered “an agent”, for which students commissions may be paid, what powers the Minister holds over providers (including the unfettered personal ability to cancel a provider’s license outside regulatory oversight), and rules around student transfers onshore — all issues that directly affect providers and, ultimately, the students they serve.
Many in the sector do genuinely welcome the headline increase in the 2026 caps as a sign of clearer direction and potential stability. The planning underpinning the 2026 caps and exemptions is detailed and generally coherent – rectifying many of the deficiencies of the previous approaches (both the proposed legislation and then last-minute instrument in December).
Whilst some allocation numbers are yet to be finalised, the Department has indicated that the methodology for public universities remains a similar approach as 2025 (a holistic consideration of student volumes across 2019 to 2023) – although with the new ability to apply for a greater allocation if there is strategic engagement with South East Asia and/or there is adequate provision of student accommodation. The operations and “bidding process” for these extra places is awaited – although it’ll happen rapidly if the Department delivers on its intent to confirm final allocations by October.
However, the much-criticised approach for allocation to independent providers continues into 2026 – where the formula perversely rewards providers who recruited en masse in 2023, regardless of studentsatisfaction and outcomes, institutional risk ratings or whether the student was poached from another provider with no visa process oversight.
This is a particularly disappointing outcome for many quality providers. Some of the most egregious behaviours committed by bad actors and permitted by deficient policies continue unfettered whilst quality providers are penalised for continuing sound and ethical practices.
The 2026 cap announcement is a welcome step, but it’s far from the journey’s end. It will mean little without swift clarity on ESOS amendments, visa policy reform, and the first tests of the 2026 planning levels. As well as the obvious headline figures, Australia’s critical KPIs includes the diversity and distribution of students (across geographies and providers), the linking of exceptional student outcomes and ethical provider behaviours to opportunities for growth and creating the enabling environment for a rich ecosystem of providers to co-exist.
Australia’s choice is clear: act decisively now to rebuild trust offshore, or risk being remembered not for recovery, but for squandering a once-unrivalled position in the global student market.
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