Australia’s Education Minister Jason Clare has doubled down on the federal government’s decision to cap international student numbers, arguing that universities must prioritize domestic education over profit-driven expansion.

“It should be more than 50% of students at universities being local students,” Clare told Sky News, underscoring what he called the “sustainability” of Australia’s higher education system.

The cap — first announced in August last year — limits new international student enrolments to 270,000 annually starting 2025, with each institution receiving a fixed allocation.

The move aims to ease pressure on housing and infrastructure while restoring migration to pre-pandemic levels. Australia currently hosts about 717,500 international students, 10% more than before COVID-19, according to government data.

However, the policy has divided the education sector. University groups — especially those representing elite “sandstone” institutions such as Sydney University — have described the cap as an economic and reputational blow. With more than half its students from abroad, Sydney University has become the face of the debate.

Economic modelling commissioned by the university warns that the limits could strip AUD 4.1 billion from the national economy and eliminate 22,000 jobs in 2025 alone.

The rationale: housing, ethics, and balance

Clare dismissed claims that the measure punishes universities, framing it instead as a correction after years of unchecked growth in the sector. The government argues that some private colleges exploited lax rules by enrolling students without academic or language readiness, while others contributed to worsening urban housing shortages.

In response, Canberra has tightened English-language criteria, introduced stricter visa rules for repeat students, and begun cracking down on “dodgy” providers.

Clare said future enrolment allocations will depend on universities proving two things:

“First, that they’re building more housing, because we need more housing. And second, that they’re diversifying — attracting students from more countries, not just one.”

Regional equity and sustainable growth

The education minister also pledged to prioritise regional universities in future allocations to ensure the economic and cultural benefits of international education extend beyond Sydney and Melbourne. “We don’t want it just to be the big universities that benefit. Smaller regional universities should benefit as well,” he said.

Defending the reduced allocation for Sydney University, Clare reaffirmed his view that international education should support — not overshadow — Australian students. “International education is vital to our economy and global ties,” he said. “But nothing is more important for Australian universities than educating Australians.”