Charles Sturt University (CSU), with its prominent regional campus in Port Macquarie, has voiced grave concerns over the Federal Government's continued implementation of Ministerial Direction 107 (MD107). Describing the policy as "disastrous," CSU Vice-Chancellor Professor Renée Leon highlighted its disproportionate impact on regional universities, which are already grappling with significant challenges in maintaining international student enrolments and financial stability. This controversy underscores a broader crisis in Australia's international education sector, particularly for regional institutions that rely heavily on international students for their sustainability and the critical workforce pipeline they provide.
What is Ministerial Direction 107?
Ministerial Direction 107 (MD107) was introduced as a policy aimed at addressing migration and housing issues by tightening visa processing rules for international students. While the policy ostensibly sought to ensure the integrity of Australia's student visa program, it has created significant unintended consequences. The most critical of these is the massive delay in visa application processing, which has disproportionately affected smaller and regional universities.
The policy has been criticised for prioritising visa applications for students attending large metropolitan universities, leaving regional institutions and their prospective students in limbo. According to CSU, this has resulted in a sharp decline in international student numbers and significant financial losses for regional universities.
The Impact on Regional Universities
The fallout from MD107 has been particularly severe for members of the Regional Universities Network (RUN), a collective of universities that play a pivotal role in delivering higher education to Australia’s regional communities. CSU's Professor Renée Leon revealed that international student commencements at RUN universities have fallen by nearly 40% under MD107. For CSU alone, this has translated into an estimated $40 million revenue loss and a drop in international student numbers from 8,000 pre-pandemic to less than 1,000 today.
These losses are not merely financial. They have far-reaching implications for the communities served by these institutions, particularly in regional areas like Camden Haven and Hastings. The absence of international students exacerbates critical workforce shortages in fields such as health, aged care, and other essential services. Regional universities, which traditionally serve as hubs for community development and skills training, are now struggling to fulfil their missions.
Professor Leon stressed that international students are a cornerstone of financial sustainability for regional universities. Without their presence, the ability of these institutions to offer opportunities to low socioeconomic status (SES) students, First Nations communities, and other underrepresented groups is at serious risk.
MD107 as a “De Facto Cap”
Education Minister Jason Clare has described MD107 as a “de facto cap” on international student numbers, suggesting it could serve as a tool to manage migration and housing pressures. However, critics argue that it effectively operates as a cap only for smaller and regional universities while allowing larger metropolitan institutions to thrive.
This discrepancy has created an uneven playing field, with metro universities experiencing significant growth in international student numbers while regional institutions face declines. For example, while RMIT University has adapted its recruitment strategies and maintained steady enrolments, regional universities like CSU and Southern Cross University are struggling to compete under the current policy framework.
Universities Australia CEO Luke Sheehy labelled MD107 a “destructive instrument,” warning that it jeopardises jobs within the university sector and broader economic stability in regional areas. The uneven impact of MD107 has sparked calls for urgent reform to ensure equity and diversification in Australia’s international education system.
Policy Uncertainty and Its Fallout
The chaos surrounding MD107 has been further compounded by the government’s failed attempt to pass amendments to the Education Services for Overseas Students (ESOS) Act 2000. These amendments, which proposed reducing international enrolments by 30% to cap them at 270,000 annually from 2025, were unexpectedly blocked in Parliament by a coalition of the Opposition, Greens, and Independents.
This unexpected legislative backflip has left the university sector in a state of uncertainty. Many universities had already begun adjusting their recruitment and operational strategies in anticipation of the proposed caps. With the caps scrapped and MD107 remaining in place, institutions are grappling with a confusing and unstable policy environment.
Professor Tyrone Carlin, Vice-Chancellor of Southern Cross University and chair of RUN, warned that leaving these issues unresolved until 2025 will only deepen the crisis. He called for immediate action to address the inequities in the current visa processing regime, arguing that delays will harm not only students but also institutions and the regional communities they support.
Economic and Social Implications
The impact of MD107 extends far beyond university campuses. International students contribute billions of dollars annually to the Australian economy, not only through tuition fees but also through spending on housing, transport, and other living expenses. In regional areas, where local economies often rely on university activity, the decline in international student numbers has been particularly damaging.
In addition to economic contributions, international students play a vital role in addressing workforce shortages in critical sectors. For example, many international students in regional universities study healthcare and related fields, where skilled graduates are in high demand. The delays and refusals caused by MD107 mean fewer graduates entering these essential professions, exacerbating existing workforce shortages.
Furthermore, the policy undermines Australia’s reputation as a welcoming and reliable destination for international education. Prolonged visa delays and policy uncertainty risk driving prospective students to competitor countries such as Canada, the UK, and the US, which offer more streamlined and predictable pathways for international students.
Calls for Reform
The criticism of MD107 has been loud and widespread, with stakeholders across the education sector calling for its immediate repeal or significant revision. Key demands include:
- Equitable Visa Processing: Universities and advocacy groups are urging the government to create a more balanced visa processing framework that does not disproportionately disadvantage regional institutions.
- Urgent Legislative Action: Stakeholders are calling on the government to resolve the issues surrounding the ESOS Amendment Bill and provide clear guidance on future international student caps.
- Support for Regional Universities: Increased government investment and targeted support are needed to help regional universities recover from the financial and operational challenges posed by MD107.
- Streamlined Processes: Reforming visa processing timelines and criteria will be critical to restoring confidence among international students and ensuring a level playing field for all institutions.
The Way Forward: A Fair and Sustainable System
The ongoing fallout from MD107 highlights the urgent need for a cohesive and equitable approach to international education policy in Australia. As the government grapples with competing priorities—migration management, housing pressures, and the economic importance of international education—it must ensure that regional universities are not left behind.
Immediate reforms to MD107 and related policies are essential to stabilise the sector and restore confidence among students, universities, and regional communities. By addressing the inequities in visa processing and providing targeted support for regional institutions, Australia can rebuild its reputation as a global leader in international education while supporting its regional workforce and economy.
As Professor Leon aptly stated, “MD107 represents a significant policy failure and should not be in place a day longer.” The time for action is now. If Australia hopes to maintain its status as a top destination for international students, it must create a fair and sustainable system that supports all stakeholders—students, universities, and the communities they serve.
