IDP Education shares rally as student cap impact less negative than feared
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More news: Shares in IDP Education rose in afternoon trade as the impact of the international student cap announced by Education Minister Jason Clare would not be as severe as expected.
IDP shares gained 6.12% to $15.96 by 1.14pm AEST, but over the past 12 months has plummeted 37.5%.
E&P Capital analyst Entcho Raykovski said the international student limits appeared less negative than feared.
The student cap implied a 13% reduction in new international students commencing study in IDP’s six key destination markets in FY25 compared to the projected 20% to 25% decline.
What they said: “E&P is for a 10% decline in IEL’s Australia Student Placement volumes in FY25, which assumes some market share gains,” Raykovski said.
“... While the ultimate impact on IEL will depend on the individual limits which are set for universities (including the Go8), and we don’t yet have that level of detail, we expect this media release will be positive for sentiment as it suggests any caps are unlikely to be as negative as feared.”
Govt to cap international students at 270,000
The news: Education Minister Jason Clare has announced a cap of 270,000 new international student enrolments for 2025 as part of the government’s reforms to rein in the soaring numbers of overseas students.
The context: Clare has been considering a cap on international students, with the number growing from 521,831 two years ago to 810,960 in the year to May 2024.
The government currently has legislation before parliament that would enable caps on the number of international students at educational institutions in Australia, including universities, TAFEs and private colleges.
In a press conference in Sydney on Tuesday, Clare announced that the cap — which the government is calling the National Planning Level (NPL) — for new international student enrolments will be 270,000 for the calendar year 2025.
The NPL will be divided between the higher education and vocational education and training (VET) sectors, bringing the number of new international student commencements across higher education and VET back to pre-pandemic levels.
The cap is expected to receive significant pushback from the university sector, which will likely argue that restrictions have already been put in place and that they are in the process of cutting international student enrolments.
What they said: "You will never see me bag universities or the people who work there. They do incredible work," Clare said during the press conference.
"The fact is, we have a good education system in this country, we have a good higher education system in this country. But it can be fairer and better. This is part of it.
"Individual universities will make their own decisions. Some universities will have lower numbers next year than last year, many other universities will have higher levels next year than last year.
"... But I make no apology for making sure that we are returning migration levels to pre-pandemic levels and this is part of that."
The sources: Education Minister's press conference, E&P Capital research
