Tighter visa rules threat

The flood of fee-paying foreign students entering Australia's universities has slowed to a trickle, threatening the nation's A$7 billion (£3 billion)-a-year education export market. A collapse in the market would leave many universities with a huge fall in revenues.

Foreign students contribute more than A$2 billion a year to university budgets. Yet the latest data reveal that the number of new students arriving in Australia to undertake university courses levelled out last year and could soon begin to fall. Declines have already occurred in several key markets. Enrolment of Indonesian students dropped 11 per cent last year, those from Singapore fell nearly 9 per cent, Hong Kong 7 per cent, and Malaysia 3.4 per cent.

Large numbers of students come to Australia hoping to obtain permanent residency on graduation. But imminent changes to Australia's skilled migration programme are likely to exacerbate the drop in applications for study visas. Expected recommendations to go to Cabinet are tougher English-language requirements for students from certain Asian countries and a temporary visa category that will allow them to work for a year to gain the skills needed to be granted residency Of the 29,000 residency visas awarded to skilled foreigners in 2004, 40 per cent went to the 11,500 overseas students who applied onshore - double the number allocated two years earlier.

In the four years to 2005, the number of overseas students undertaking university courses in Australia jumped by more than 40 per cent to almost 160,000. But over that period, annual enrolment growths fell successively from 17 per cent to 12 per cent to 8 per cent. In the 12 months to last November, the number of new overseas students starting courses rose by 0.8 per cent.

But vice-chancellors are largely unperturbed. Di Yerbury, president of the Australian Vice-chancellors' Committee, said: "We probably wouldn't sleep too well if we hadn't worked out strategies to minimise and spread that risk."

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