The first few weeks of 2025 have picked up where 2024 left off, with more reported bad news for several of the international higher education sector’s major study destinations.
Many UK institutions are suffering from a reduction in international fee revenue. Study visa applications – from main applicants – fell by 14% in 2024.
- In Canada, the picture is even bleaker. Study permit approvals for international college students are said to have more than halved, with worse news predicted in 2025, in part due to reputational fallout.
- Australia was hit by a 44% reduction in visa applications lodged between July and October 2024
In the cases of these three countries, the problems for the sector are driven, to a major extent, by a shift in government policy. This is in response to immigration concerns amongst large swathes of the electorate.
Whereas the UK curbed demand through discontinuing the issue of visas for dependants of international students pursing postgraduate taught courses, Canada and Australia are experimenting with caps, alongside other targeted restrictions. The expansive international student recruitment stance of prior years has been drastically reversed. In Australia, the uncertainty is further amplified by political disagreements centred on how the objective to cap new commencements to 270k should be achieved.
Winners and losers?
Amongst the impacted countries, some institutions are still able to shine. Or at least fare relatively better.
- In the United Kingdom, higher-ranked universities amongst the Russell Group have a double advantage. They are better insulated from the impact of demand-side shocks, due to better diversification of revenues. They can also benefit from lower overall demand, by reducing their admissions criteria, enabling students to trade up from universities perceived to be less prestigious, which in turn face the prospect of steeper declines in their numbers in face of declining share in a smaller market.
- It is different in Australia, where the prestigious Group of 8 universities are anxious about the constraints on their new overseas student commencement volumes implied by Ministerial Direction 111. Having suffered disproportionately last year, a broad base of higher education institutions may now see the benefit of a possible wider distribution of students.
The University of Melbourne, one of the concerned Group of 8 universities in Australia
In Canada, certain student cohorts are less impacted than others. The recently announced 2025 study permit caps reduce the total allocation by 10% to 437,000, around three quarters of which require the applicant to secure a provincial or territorial attestation letter (PAL or TAL). This is designed to enable provinces to manage within the caps imposed on them. Exchange students are now exempt from the PAL requirement, but it is newly extended to international students on master’s and doctoral programmes. However, with study permits reserved for graduate student under the latest year’s scheme, some industry experts believe that undergraduate numbers could suffer.
Driven by political and public concerns about immigration, and pressures on housing and services, governments in all three destinations are leaning towards maintaining, or further tightening, immigration controls. Federal elections lie ahead in Canada and Australia this year. Neither Australia’s Liberal Party, nor Canada’s Conservative Party are in power today. But each of them promotes policies aimed at further curtailing immigration, including controls on international students.
Alternative destinations
Destination-wise, who is benefiting from the macro-level travails of the UK, Canada and Australia?
European Union (EU) countries have a growing appeal to international students. Tuition fees in the bloc tend to be lower than in the United Kingdom. An increasing number of programmes are taught in English, widening their appeal to international students. However, accommodation shortages are still creating supply-side problems, according to ICEF Monitor.
New Zealand is proving a hit, with recent impressive growth rates. It is an attractive study destination, with positive ratings. However, its institutional capacity is relatively small.
Looking good: the University of Otago, New Zealand
An opportunity for the USA?
The United States is an international education powerhouse, yet the proportion of overseas students across its thousands of institutions is very small in comparison to other leading destinations. An opportunity exists. Will the United States be an international education winner under Donald Trump? Before he was re-elected as President, Trump promised an automatic green card for graduating students.
Rather at odds with his overall immigration stance, such a policy would appeal greatly to the technology sector. And obviously it would have a massive appeal to international students considering their choice of destination. Yet as with many things Trump says and does, it is hard to know whether it is a policy, a soundbite, or a passing thought which may be already forgotten.
Making American international education even greater?
What is clear is that even without such a major move, the United States has a tremendous opportunity to win further share of the international student market. Whether Trump will move to attract or alienate international students this term is, of course, anybody’s guess. Whilst other countries have set a clear medium-term direction on international student policy, the United States could have a very different stance depending on the week and the mood of its unpredictable President.
Next time: with seeming stability in the international outlook for UK higher education, we will look at the diverse range of strategic responses in play from its under-pressure institutions.
