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The number of international students accepted to study at universities and vocational institutions will be capped in 2025.
Education Minister Jason Clare announced the amount of students allowed to study would be capped at 270,000 as part of the federal government's reform of the education sector.
The cap will include a limit of 145,000 new students at publicly-funded universities in Australia and about 95,000 at vocational institutions in 2025.
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International education was worth $47.8 billion to the Australian economy in 2023, according to the Department of Education.
It's among the five highest-earning exports in Australia, which also include iron ore, coal, gold and natural gas.
Individual caps will be determined for each institution and Clare said it will be decided based on several factors, including recent levels of new international student arrivals.
Clare said the cap would mean the level of international students commencing study at universities across the country in 2025 will be around the same as this year.
It will, however, impact international student levels at individual institutions.
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Bigger universities in Australia will have fewer new international students under the proposed cap, he said, while regional institutions will have capacity to accept more.
"This is about setting up the system in a better and fairer way so it's not only a lucky few universities that benefit but the whole sector," Clare said.
Some students will not be included in the reform, such as international school students, research and PhD candidates, government-sponsored students and students from the Pacific and Timor Leste.
The cap followers pressure on the federal government to address growing concern over the education sector.
International students returned to Australia in droves after COVID-19 borders were lifted and restrictions were eased.
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"There's about 10 per cent more international students in our universities today than before the pandemic and about 50 per cent more in our private vocational and training providers," Clare said.
"Students are back but so are the shonks — people are seeking to exploit this industry to make a quick buck."
Following the announcement, the National Tertiary Education Union (NTEU) said in a statement it wanted the federal government to confirm the cap would not result in job losses across the sector.
"The federal government must ensure university bosses don't use these changes as an excuse to cut jobs from an already stretched workforce," Dr Alison Barnes, NTEU National President, said.
