Industry experts say the Australian Government's recently announced changes to the migration programme have also shaken the overseas student market.
And there are now calls for a body to represent the interests of the entire sector to help repair the damage.
Andrew Smith, from the Australian Council for Private Education and Training, says there has been a drop of between 40 and 50 per cent in applications from South Asian countries, particularly India.
"We've seen some fall away from the China market which is another key market but we are also seeing some increases in other markets and we expected over the course of this year, numbers overall will actually probably hold about the same," he was quoted as saying by ABC news.
"There just won't be anything like the rates of growth we've experienced in recent years."
But he says the Government's changes to the skilled migration programme are likely stunt growth in the education market."There was a further suite of changes announced last week," he said.
Industry and government are desperate to restore confidence in Australia as a safe place for quality education.
Rod Jones from the Navitas education provider says while there is plenty of goodwill, he fears the effort to repair Australia's reputation is uncoordinated and he says a new umbrella body should be set up.
"It is the third or fourth largest export industry for this country and it seems really quite amazing that there is not a body that's looking to try and coordinate from a government perspective, the best possible outcome for this country in terms of delivering both additional export dollars but taking a view about the long-term future and strategy of how we should best manage this industry as we move forward," he told ABC news.
Smith says it could be something along the lines of Tourism Australia.
"This is a significant industry - it needs the support and it needs the strategic approach that will see us take this industry to the next step," he said.