A reset for Australia’s student visa policy: are we counting students and missing the economic value?

For three years, Australians have argued about how many international students should come here. Tighter visa rules, lower migration targets and housing stress have driven the fight.

Something is missing from it. Few people ask what cutting student numbers does to jobs, household spending, universities, skills and our standing abroad. We do have a test case. We lived through one.

What the pandemic showed

In 2019, international education earned Australia A$40.1 billion. In 2020 that fell to A$31.7 billion. In 2021 it hit A$22.0 billion. Two years, an A$18 billion drop, 45 per cent gone.

Against the 2019 level, we lost about A$26.4 billion in export income across 2020 and 2021.

That’s gross export income, not lost tax revenue. Still, it’s big. The Centre for Future Work found tertiary education employment fell by about 40,000 positions in the year to May 2021, all at public institutions. Border closures were one cause among several. Universities were also shut out of JobKeeper.

Today’s visa changes aren’t the pandemic. I’m not claiming they’ll cause the same losses, and the government says they’re about integrity and stopping abuse. But 2020 and 2021 showed how tightly education is woven into the economy. We should take the numbers seriously.

The recovery

The sector bounced back fast. Education exports rose from A$26.6 billion in 2022 to A$46.9 billion in 2023, A$51.5 billion in 2024 and A$55.0 billion in 2025. Of the 2025 total, about A$24.4 billion was tuition. The other A$30.4 billion was students paying for housing, food, transport and everything else.

Here’s a sense of scale. Say a student spends A$30,000 a year on tuition and A$30,000 on living costs. Over a three-year degree, that’s A$180,000. Ten thousand student-years at that rate is A$600 million. It’s an illustration, not an official average, and not a forecast of what current policy will cost. What happens in practice depends on how universities, households and other markets respond.

The work they do

We argue a lot about students and housing. We rarely talk about their work. Many students work in aged care, hospitality, retail, cleaning and delivery, within the hours their visas allow. Think of Sunday nights in an aged care home. Public holidays. An office cleaned after everyone has gone home. Citizens, permanent residents and other migrants do these jobs too, and students are part of that mix.

The Reserve Bank estimates students made up 2 to 3 per cent of the labour force before the pandemic. From 2016 to 2019, 37.4 per cent of working students were in accommodation and food, against 7.0 per cent of the whole workforce. By 2023, health care’s share of working students had climbed from 11.5 to 17.0 per cent. The Bank also notes that students from Nepal and India tend to work more than average.

The ABS estimates that about A$15.6 billion of student spending in 2024-25, around a third of the A$53.6 billion total, was funded by wages earned here. That money sits inside the export figure, so it isn’t new income from abroad, and critics argue the headline overstates what the country earns. It does show that students are workers as well as customers. On the RBA’s estimate, they still spent more than three times what they earned in 2023-24.

None of this excuses underpaying them. Students’ work hours are capped, and they deserve the same protections as everyone else. Whether fewer students would strain the labour market depends on whether employers can find replacements.

Housing, honestly

Students need homes, and that lifts rental demand. The Reserve Bank’s modelling suggests 100,000 extra students would add about 50,000 renters and lift rents by roughly 0.5 per cent. That effect can be larger when vacancy rates are low, but the Bank found students probably added only a small share to rent growth since the pandemic. Much of the jump in advertised rents came before borders reopened. Students can also bring investment in purpose-built accommodation.

So let’s count properly. Put the costs, such as housing, crowding and public services, next to export income and jobs.

Don’t assume every extra student is a net gain. Don’t assume cutting numbers fixes the housing crisis either.

After graduation

Not every graduate stays. Some go home. Some move to temporary graduate visas. Some find skilled work and become permanent residents. About 30 per cent of students applied for a temporary graduate visa in the five years to 2022, and students make up about a third of the permanent resident intake. Nurses, engineers, IT workers, teachers and social workers can fill real gaps, depending on registration, employer demand and migration rules.

Outcomes vary. The Grattan Institute, as cited by the Reserve Bank, has found many graduates stay in “visa limbo”, working in low-skilled jobs. So policy should reward real study and proven skills. It shouldn’t assume every graduate fills a shortage. A selective graduate pathway that people can trust would serve both integrity and skills.

Investment that may never pay off

Providers spend years on curricula, accreditation, staff, campuses and overseas partnerships before a single student enrols. When enrolment rules change, income can fall faster than costs.

A smaller provider might put off a new campus, hold off on a hire or drop a course. Export figures won’t show it right away. Teaching capacity and jobs will.

The Department of Education counted 687,810 international students in the year to June 2026, down 7 per cent on a year earlier. New students fell 8 per cent. Higher education enrolments were still up 2 per cent in the year to May, while every other sector fell. English language courses dropped 27 per cent. Visa changes aren’t the only cause. But the split shows why we can’t treat every sector and provider alike.

Soft power

Graduates who go home become professionals, entrepreneurs, academics and officials who know Australia. Indonesians educated here include senior ministers and officials. Nepal supplies about 9 per cent of international students, the third-largest source after China and India.

Not every graduate becomes a leader, and you can’t put a price on this. It still matters for a country that wants stronger partnerships across the Indo-Pacific.

A better measure of success

Growth can’t be unlimited. Australia needs credible visa controls to stop exploitation, protect quality and ease pressure on housing and infrastructure. Better compliance is a real gain, and it counts.

But a sector worth nearly A$55 billion deserves a wider scorecard than visa numbers. Count export income. Count provider investment, regional jobs, labour supply, graduate outcomes, housing pressure and alumni ties.

The pandemic showed how deeply education runs through the economy. Policy today is different, but the lesson holds.

Visa numbers alone don’t tell us what students are worth. Australia should decide how many students it wants, what they gain, what they spend, and what we stand to lose without them.