Student caps to relax in Australia by 2026, but challenges remain

After a couple of years focused on reducing international student numbers, the Albanese government is set to change its tune in 2026. This shift should bring a breath of fresh air for those eyeing education and work opportunities in Australia.

New Changes for 2026

The government plans to raise the target for new international students from 270,000 in 2025 to 295,000 in 2026. While this sounds optimistic, various migration policies may still limit the actual number of international students arriving in Australia.

Understanding the Current System

Right now, the 270,000 student target is divided into 176,000 for higher education and 94,000 for vocational education. Each education provider has its own limit within these totals. Although these numbers aren’t legally enforceable, when a provider fills 80% of its quota, the processing of student visas slows down for new applicants. This creates what’s known as a “soft cap.”

What to Expect in 2026

For the upcoming year, all education providers will receive their allocations from 2025. Higher education institutions will share 196,750 student places—about two-thirds of the total for 2026. Public universities will have the chance to gain extra spots by meeting two government priorities: improving student accommodation and fostering closer ties with Southeast Asia.

Impact of Accommodation and Engagement

By boosting student accommodation, the government aims to ease housing pressures, which had previously driven down international enrolments. The emphasis on Southeast Asia is a new strategy aimed at enhancing collaboration with universities in that region, particularly those that already have campuses there.

Vocational Education: Increasing Opportunities

The vocational education sector is also set to see a 5% increase in its 2026 allocations if its 2025 numbers were significant. Smaller providers will have a different system, but can recruit up to 80 students without facing slow visa processing.

Exemptions from Limits

Some student categories will continue to be exempt from the caps, including high school students and those from the Pacific. New exemptions will apply for students who finish their schooling in Australia or are transitioning from pathway colleges—schools that help international students ease into Australian university programs. These students will not count towards the overall caps.

Challenges Facing Vocational Education

Despite adjustments, the uptick in numbers may not reflect actual demand. Offshore interest in vocational education has dipped sharply since 2023. As of early 2025, only a fraction of anticipated visas were granted compared to previous years. The Department of Education noted that while enrolments in vocational courses went up, the gap between visa grants and enrolments remains wide. This discrepancy is largely due to a backlog of applications from students already in Australia.

Higher Education Trends

In the realm of higher education, international demand has remained relatively steady, though it has softened compared to the boom years. While applications from China remain resilient, interest from India has sharply declined. Universities heavily dependent on Indian student enrolments could struggle to meet their caps in 2026.

What’s Happening Now?

Despite an increase in the student visa application fee recently—from A$1,600 to A$2,000—the new caps might bring some relief for the international education sector. However, these changes shouldn’t mislead anyone into believing Australia is shifting back to a more open approach. Plans are already in place for the Australian Tertiary Education Commission to start regulating international student numbers in 2027.

Additionally, the government’s current approach continues to favour public universities, making it harder for private institutions to compete. Overall, the system remains less welcoming for international students than it was two years ago.

What do you think?

Have a question about this topic or your plans to move to Australia or New Zealand? Scroll down and leave a comment. We’d love to hear from you.

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