Adelaide University is not on track to meet its international student targets and is staring down tens of millions in lost revenue, with the federal government's migration clampdown putting pressure on the business case for the newly merged institution.
The new university opened its doors to students in January after a roughly three-year process to bring together the University of Adelaide and University of South Australia, backed by a $464.5 million package from the state government.
The business case for the merger projected that the new Adelaide University could attract 6,000 additional international students by 2034 compared to what the two universities had enrolled in 2023.
But statistics supplied by Adelaide University show its international student numbers are going backwards.
Adelaide University has enrolled 16,677 individual international students in 2026; the two predecessor institutions had enrolled 20,820 international students at the same point last year, the university said.
The university is laying the blame squarely at the feet of the federal government's policy changes to bring down international student numbers over the past two years.
These included hiking student visa fees to $2,500, refusing more student visa applications and introducing a soft cap on new international student enrolments.
The latest move — barring international students from bringing their families to Australia — was unveiled by Home Affairs Minister Tony Burke last week.
"We are deeply concerned by the policy direction," said Professor Jessica Gallagher, Adelaide University's deputy vice chancellor, international and external engagement.
Professor Gallagher said the changes "absolutely" jeopardised the university's target for 6,000 additional international students.
"I would say that on the basis of this year, it's going to be a much tougher challenge for us [to meet that target]".
University faces revenue shortfall
In May, Adelaide University Vice-Chancellor Professor Nicola Phillips revealed that international student enrolments were 40 per cent below target for semester one, creating a projected revenue shortfall of $90 million.
A spokesperson told the ABC the university has also "experienced a similar percentage decrease in international student enrolments in semester two".
In her May message, Professor Phillips said the university would not undertake a "radical restructuring" of the workforce and domestic student enrolments remained on target.
But she warned that the university needed to be "prudent and very clever about how we manage our finances over these next three years".
Professor Gallagher told the ABC that Adelaide University had experienced a "stark increase" in student visa refusals and had been "hit harder" than other Group of Eight universities.
This is because, she said, Adelaide University attracted more students from India, Bangladesh, Sri Lanka and Nepal, where student visa refusals are higher than other markets like China.
The policy changes have created the potential for "continuing downturns in our international student numbers".
"That has some really significant financial consequences," Professor Gallagher said.
A 'bad timing' merger?
The universities of Adelaide and South Australia agreed to work together on a merger in December 2022 and decided to go ahead with it in July 2023.
They were supported by a $464.5 million package from the Malinauskas government, which included $30 million for measures to attract international students.
But the debate over amalgamation largely occurred before the Albanese government's turn on migration policy.
"Their timing was bad", Andrew Norton, a professor of higher education policy at Monash University, said of the merger.
"If this had been done five years ago, there would have been scope for adding international students.
"But as it's turned out, it's coincided with a policy decision to reduce international student numbers."
Professor Norton said he did not believe the merger would have gone ahead if the international student crackdown was happening in 2021/22.
He said the lost fee revenue means Adelaide University will "almost certainly" have to undertake some "further restructuring" to bring expenses down.
"Its ranking should go up over time," Professor Norton said.
"But because the demand for international education has gone down, there won't be that translation of a better ranking through more students that there might have been had the merger happened at an earlier time."
'There's always contingencies'
Professor Gallagher, asked whether the two universities had prepared during the merger for the federal government to take this policy direction, said: "It would have been amazing to have had a crystal ball".
"But we can't have predicted the number of changes and the short time frame with which they were going to be implemented," she said.
She pushed back, however, on suggestions the university was unprepared, adding: "There's always contingencies."
In 2023, the two universities told a parliamentary committee they had modelled "worst case scenarios", including one where "the international student load of one institution falls away".
"That would be difficult and is incredibly unlikely," the universities submitted at the time, "but effective management responses were identified and modelled".
That submission, which put the cost of the merger between $500 and $650 million, said cost overruns were "not the most significant risk to the project".
"A drop in student demand presents a more significant challenge."
Other benefits to merger, SA government says
Minister for State Development Chris Picton said the state government shared the concerns of Adelaide University about the crackdown on international students, noting it was South Australia's second-largest export industry.
"It's not something you would want to turn off the tap for," he said.
"It's a bit like if you were trying to damage the mining industry, people would think you're crazy for doing that.
"Why are we trying to do the same thing for international education?"
But he rejected suggestions the university merger was poorly timed, pointing to improvements in the university's ranking and future opportunities in the defence, mining and critical minerals sectors.
"This merger was pursued for a variety of different reasons but mainly about making sure we can seize the economic opportunity for the state ahead of us," he said.
"I think to say it was wholly about international students is short-sighted."
Adelaide University moved up to 79th on the QS World University Ranking this year, up from 82nd in the previous year.
It is also ranked 133rd by Times Higher Education and between 101 and 150 by the Academic Ranking of World Universities.
The ABC contacted federal Education Minister Jason Clare's office for comment.
