📊 A Sharp Rise in First-Year Attrition Rates

Australia's higher education sector, long a magnet for international talent, is grappling with an unprecedented surge in first-year dropout rates among international undergraduate students. Attrition rate, defined as the percentage of commencing students who discontinue their studies within the first 12 months, has climbed dramatically. According to Department of Education data analyzed in a recent Menzies Research Centre report, the national average reached 17.4 percent in 2023, nearly doubling from 9.7 percent in 2018 and marking a stark departure from pre-COVID levels below 10 percent. This equates to approximately 14,873 students abandoning their university courses shortly after arrival.

This trend has sparked widespread concern among educators, policymakers, and industry observers. Universities, which derive up to 30 percent of their revenue from international fees in some cases, face financial pressures amid declining overall enrolments. In the year-to-date October 2025, international student commencements fell 15 percent compared to 2024, signaling broader challenges in the sector.Australian Department of Education data tables.

Universities Bearing the Brunt: A Tale of Disparities

The dropout crisis is not uniform across institutions. Regional and lower-cost universities, particularly those with branch campuses in capital cities, report the highest rates. Central Queensland University (CQUniversity) recorded a staggering 57.2 percent attrition, with 616 international undergraduates leaving in their first year alone. Other notably affected institutions include Flinders University at 44.3 percent (354 students), University of New England at 45.5 percent (71 students), Queensland University of Technology at 46.4 percent, Australian Catholic University at 34.4 percent (878 students), La Trobe University at 33.5 percent (712 students), Federation University Australia at 36.1 percent (238 students), and Southern Cross University at 37.6 percent (221 students).

In contrast, Australia's Group of Eight (Go8) elite universities demonstrate far stronger retention. Monash University achieved just 4.8 percent, the University of Melbourne 3.6 percent, University of Sydney 4.7 percent, University of New South Wales 4.1 percent, and RMIT University 9.9 percent. This disparity highlights how fee structures play a role: higher-priced programs at prestigious institutions tend to attract more committed students, while cheaper entry points at others serve as gateways exploited by less genuine applicants.

These figures underscore a concentration of issues at certain providers, prompting questions about recruitment practices and student suitability.

Unpacking the Root Causes

Several interconnected factors drive this exodus. First, the post-pandemic cost-of-living crisis has hit hard. International students, barred from full-time work under student visa conditions (typically 48 hours per fortnight during term), face skyrocketing rents and living expenses. Accommodation shortages in major cities like Sydney, Melbourne, and Brisbane exacerbate this, forcing many into shared housing or remote areas with limited support.

• Financial hardship: High tuition fees combined with unexpected costs lead to personal difficulties, as noted in CQUniversity's 2023 annual report.
• Employment pressures: Temptation to exceed work limits for income, or prioritizing jobs over studies amid labor shortages in hospitality and retail.
• Housing crisis: Rental vacancy rates below 1 percent in some cities push students into instability.

Second, systemic issues like 'course-hopping' emerge prominently. This practice involves students enrolling in affordable university degrees primarily to secure a student visa subclass 500, which grants entry and work rights. Once in Australia, they complete minimal study requirements, withdraw, and apply for a bridging visa (a temporary authorization allowing stay and full work rights while a new visa is processed). Numbers on bridging visas ballooned to 107,274 by mid-2025, up from 13,034 in 2023. Many then switch to vocational education and training (VET) providers for cheaper courses with perceived better pathways to permanent residency (PR).

Education agents fuel this churn, offering incentives for provider switches. Aggressive recruitment targets volume over quality, with some agents promising easy PR routes that rarely materialize. Genuine students also suffer from poor orientation, academic mismatches, and isolation in a new cultural context, where English proficiency or adjustment to independent learning proves challenging.

Far-Reaching Impacts on Stakeholders

The ripple effects are profound. Universities lose millions in foregone tuition—each dropout represents tens of thousands in revenue—straining budgets already hit by enrolment caps and domestic funding shortfalls. Reputational damage follows, as high attrition signals quality issues to future recruits. For students, dropping out risks visa cancellation, deportation, or blacklisting, derailing dreams and saddling families with debt from upfront fees paid back home.

Economically, international education contributes over AUD 48 billion annually, supporting jobs in hospitality, real estate, and transport. Sustained dropouts could erode this, especially as overall international commencements dip. Policymakers worry about visa system integrity, with non-genuine migrants straining welfare and housing. Balanced against this, genuine international graduates enrich Australia's workforce in fields like IT, nursing, and engineering via post-study work visas.

For prospective students considering scholarships or Australian university opportunities, this underscores the need for thorough research into institutional support systems.

Government Response and Reforms

The Australian government, under Education Minister Jason Clare, has acted decisively. From March 31, 2026, commissions on onshore student transfers will be banned to curb agent-driven hopping. A cap on new international commencements (270,000 for 2025) aims to ease housing pressures, though higher education was exempted initially. Stricter Genuine Student (GS) tests assess intent, while financial proof requirements rose to AUD 29,710 living costs.

Visa cancellation rates for non-compliance have increased, and monitoring via the Provider Registration and International Student Management System (PRISMS) tightens oversight. These measures seek balance: protecting integrity without deterring quality students.Menzies Research Centre report on course-hopping.

Pathways Forward: Solutions for Sustainability

Addressing this requires multifaceted action. Universities should enhance pre-arrival screening, offering virtual orientation and financial literacy programs. Partnerships with agents for ethical recruitment, coupled with robust support services—mentoring, counseling, affordable housing quotas—can boost retention.

• Implement early intervention: Academic alerts and welfare checks within first semester.
• Diversify recruitment: Target high-retention source countries like China over high-risk ones.
• Financial aid: Scholarships and part-time job boards tailored for students.
• Policy alignment: Link funding to retention metrics.

For students, actionable steps include budgeting tools, verifying agent credentials via the Education Services for Overseas Students (ESOS) framework, and choosing accredited Go8 institutions for stability. Aspiring academics or professionals might explore research assistant roles in Australia post-graduation.

Photo by REVTLProjects on Unsplash

Looking Ahead: A Balanced Recovery

While 2025 saw enrolment declines, higher education bucked the trend with 10 percent growth, hinting at resilience. With reforms bedding in, 2026 could stabilize rates if genuine students prioritize. Australia's appeal—world-class facilities, vibrant cities, PR pathways—remains strong, but only if integrity prevails.

In summary, the dropout surge demands vigilance, but targeted solutions offer hope. Share your experiences on Rate My Professor, explore higher ed jobs, or check career advice and university jobs to stay informed. For employers, consider posting a job to attract global talent.