Enrolments of international students continue to tumble, dropping 9.4 per cent in the last year, with vocational education hardest hit, according to the latest federal government figures.
The sector, worth $18.3 billion in 2010 and Australia's largest services export industry, has been hit hard in recent years, with concerns over student safety in Sydney and Melbourne compounded by the surging Australian dollar.
In the last year overseas student numbers in the vocational sector, including TAFE, fell 18.8 per cent. Numbers in intensive English courses were down 19 per cent, while university education made small headway with growth of 1.4 per cent, according to figures from the federal Education Department.
Bruce Mackenzie, the chief executive of a Victorian provider, told a TAFE Directors Australia conference in Sydney yesterday the collapse in revenue was hitting educational institutions hard.
"Across the board TAFE enrolments would be down. In my institute we had 4000 international students and we're going to drop about 30 per cent this year. That was a $40 million turnover; it's going to drop by $12 million," he said.
A series of closures of private colleges, which had been exploiting international students, had also damaged the sector, Peter Holden, a director of TAFE Directors Australia, said.
"The rorts that existed the last couple of years and the closures of private providers has damaged their reputation," he said.
Nor could the impact of falling student numbers on other areas of the community be only counted in dollars. "It's the additional employment opportunities for the other service providers, like healthcare and the tourism industry, but it's also how Australia is seen in other countries - our reputation for being a welcoming and vibrant multicultural society," Mr Holden said.
The number of students coming from India has fallen the most heavily - 28 per cent (compared to the next highest fall of 11.5 per cent of students from South Korea) - following a series of highly publicised attacks on Indian students in Melbourne and Sydney in the last couple of years.
Mr Mackenzie said the government needed a more structured approach to its migration scheme, in conjunction with its student visas program, to address the national skills shortage.
"If you've got all these jobs, why don't we run a program with our vocational institutions to bring young people in from overseas who want to work in Australia and maybe want to stay here, and they come in and do a qualification in the skills area where there are shortages and then they go into employer-sponsored migration."
He said the industry was being marginalised and faced stiff competition from other countries.
Mr Holden said Australia had a reputation of not valuing its foreign students as highly as other countries. Confusion over visa regulations was also contributing to falling enrolments. "In other countries, international students are really an important part of the mix. Say Canada and the US in particular, have been much more aggressive," he said.
The industry is awaiting the Michael Knight review into international students and visa requirements. Stakeholders have made more than 200 submissions to his inquiry. No release date has been provided.
An education department spokesman said the sector is going through a "period of readjustment after several years of unprecedented and unsustainable growth". He said: "Reforms will ensure - a quality and sustainable international education sector - The latest figures show international student higher education commencements have in fact increased."