Australia revives international enrolment caps via new ministerial directive

It was clear by the end of November that Australia's controversial ESOS amendment bill – complete with its widely criticised methodology for establishing national and institutional caps on international enrolment – would not pass into law. The bill was effectively withdrawn at that point, and the international education sector has since been waiting to see how the government would respond.

The answer arrived today in the form of a 19 December 2024 announcement from the Department of Home Affairs. That statement revokes Ministerial Direction 107 (MD107), and replaces it with a new directive: Ministerial Direction 111 (MD111).

Ministerial directions do not require parliamentary approval, and therefore both of these important changes are now in immediate effect.

In a move that will be widely celebrated by the international education sector in Australia, this marks the end of Ministerial Direction 107. First introduced in December 2023, MD107 was an immigration framework that classified Australian institutions into different risk levels and offered preferential treatment to “low-risk” institutions. The directive triggered a significant spike in visa rejection rates for students from some countries, and especially so for providers that were assessed to be higher risk.

MD107 was broadly seen by Australian educators as a fatally flawed mechanism that created a great deal of uncertainty in the marketplace, while driving up rejection rates and dampening student demand.

A cap by any other name?

The 19 December Home Affairs statement sets out the new model that will take the place of MD107, explaining that:

"Under MD111, priority processing (Priority 1 – High) will apply to offshore Student visa applications associated with a provider in the higher education and vocational education and training sectors who have not yet reached their prioritisation threshold as indicated by PRISMS, the Department of Education’s system that manages enrolment information. Once the prioritisation threshold has been reached for a provider, visa processing will continue at Priority 2 - Standard priority."

What this appears to mean in practice is that visa applications will be processed for a given institution up to 80% of the indicative caps previously established under the ESOS amendment bill (where the cap was formally referred to as the National Planning Level [NPL]). Those indicative caps will now live on, and be largely administered via, the national information system PRISMS (Provider Registration and International Student Management System).

Beyond that 80% threshold, that same institution will fall to the end of the processing queue, with greater priority given to universities or colleges that have not reached the 80% benchmark. As a report in The Age newspaper put it, "Legally, the government is required to process each visa. But it is able to shift resources to delay processing and put an effective halt on certain applications."

The emphasis on offshore applications is also noteworthy, and the relative priority intended for visa applications lodged onshore is not clear. A statement from English Australia elaborates on this point, adding, "Providers should also note that MD111 does not address onshore visa applications. Onshore visa applications will sit outside the priority system. Current wait times for these students sit at an average of approximately 4 to 6 months. There is an expectation in the sector that MD111 will see these wait times grow; however, [Department of Home Affairs officials] have noted that as MD111 does not apply to these applications they should not be impacted."

What is not entirely certain from today's statement is the extent to which those indicative caps will be treated by immigration officials as hard caps on enrolment at a given institution.

The actual text of MD111 sets out that, "The existence of prioritisation of the offshore visa caseload in line with the 2025 indicative allocations of new overseas student commencements is not to be taken as a limit or cap upon the total number of visas that may be granted to any provider. It is a number used solely for the purposes of determining the number of visa applications that are to be processed with Priority 1 - High processing, before standard processing procedures in accordance with Priority 2 - Standard becomes applicable."

What that seems to indicate is that the overall cap established under the NPL (that new visa issuances will be limited to 270,000 nationally in 2025), along with the indicative caps assigned to each Australian institution under the NPL, have now become benchmarks for how the Australian government will "dispose" of visa applications.

There is considerable room for interpretation in the text of MD111, but the broad intent appears to be that visas will be processed up to the indicative cap limits (which in turn roll up to the national limit of the NPL) and then will "slow walk" processing beyond that point. How that will translate into actual processing times or rejection rates for applications, especially those handled under a "Priority 2 - Standard" approach may be the key aspect of the new ministerial direction, and it will now become one of the most important questions for the sector going forward into 2025.

What types of visa applications are excluded from MD111?

The emphasis on offshore applications in MD111 is noteworthy, and the relative priority intended for visa applications lodged onshore is not yet clear. A statement from English Australia elaborates on this point, adding, "Providers should also note that MD111 does not address onshore visa applications. Onshore visa applications will sit outside the priority system. Current wait times for these students sit at an average of approximately 4 to 6 months. There is an expectation in the sector that MD111 will see these wait times grow; however, [Department of Home Affairs officials] have noted that as MD111 does not apply to these applications they should not be impacted."

A 19 December government briefing also specified that the following student groups are not captured under MD111 and, as a result, offshore applications in these categories default to "Priority 1 - High" processing.

• Stand-alone ELICOS enrolments
• K-12 students
• Non-award students (e.g, Foundation programmes and Study Abroad)
• TAFE students
• Students recognised as transnational students by the Department of Home Affairs
• Post-graduate research students
• Flight training students
• Students in Australian or foreign government scholarship programmes
• Students under 18 years old who are a dependant of a student visa holder/applicant or of the partner of a student visa holder/applicant

Industry welcomes MD107 exit but offers withering critique of "backdoor caps"

Universities Australia Chief Executive Officer Luke Sheehy was quick to applaud the revocation of MD107. “This is the commonsense decision that was desperately needed to deliver some of the certainty and stability our universities have been seeking,” he said. “MD107 has wreaked havoc, stripping billions of dollars from the economy and inflicting incredibly serious financial harm on universities, particularly those in regional and outer suburban areas." 

“We have called for it to be revoked since June and we strongly support the Albanese Government’s decision to create a more even playing field for universities. Internationalisation and international students are critically important to our economy, our society and our universities. They never deserved to be positioned as cannon fodder in a political battle over migration and housing."

A statement from the Independent Tertiary Education Council Australia (ITECA), however, makes it clear that the severely restrictive caps for private VET providers that were introduced in the ESOS amendment bill remain in place under MD111. "[The MD111 approach is] framed as a legal exercise under the Migration Act 1958 (Cth), follows Parliament’s failure to pass amendments to the Education Services for Overseas Students Act 2000 (Cth) after four days of public hearings through a Senate Committee that also included more than 260 submissions where the adverse outcomes of Australian Government policy were laid bare and presented to the Parliament."

“The policy openly discriminates against non-government providers," added ITECA CEO Troy Williams. "It’s a policy approach that appears driven by ideological opposition to non-government tertiary education providers, rather than being guided by principles of fairness and equity. It’s a betrayal by the Australian Government of small businesses that have been instrumental in building Australia's reputation as a world-class destination for international education."

Group of Eight Chief Executive Vicki Thomson weighed in with a strong critique as well: "The Government has acknowledged that our international student visa system must be underpinned by integrity and quality. However, by replacing one flawed process with another – effectively a ‘slowdown in processing’– it has shifted the goal posts yet again.

We run the risk of confusing the international student market with these constant changes to policy settings. For too many potential students, it makes Australia look too hard and too unwelcoming as a higher education destination...In the absence of a legislated cap, the Government has set a ‘Prioritisation Threshold” – the basis of which remains unclear. Even more bewildering is the fact that the Direction allows for processing to be slowed down once this threshold reaches 80 percent – not the full threshold.

Despite there being no legislative basis for setting international student numbers, our universities have set budgets based on a number provided to them by Government several months ago. Now, with just days before the end of the year, and with little apparent rationale, this number has shifted again.

In effect this is a backdoor to caps for all the wrong reasons, it fails to address the structural funding issues our universities face and will lead to even greater confusion for our international students."

For additional background, please see:

• "Report: Australian government preparing to replace controversial 'de facto cap' on foreign student numbers"
• "Australia’s enrolment cap legislation is stalled. What happens next?"
• "Why private VET providers are hardest hit by student caps in Australia"
• "Australia announces cap on student commencements for 2025"