The apex university body Universities Australia confirmed that a forecast estimate of a 16 to 20 per cent drop in higher education visas had been realised, according to 'The Australian'.
"There has been a fall in offshore visa grants for higher education of 14,422 for the first nine months of this financial year (to March 2010), compared [with] the same nine-month period a year earlier," UA chief Glenn Withers said adding this was a 20 per cent drop from a base of 69,827 to 55,405.
Withers said the longer-term goals of the government were logical but transition arrangements were "clearly in need of major improvement".
"New policies to correct these past regulatory errors are now instead causing excessive retraction," he said.
Meanwhile, there were reports that the country's education and immigration authorities seems to be at clash over the new immigration rules being set for overseas students.
While Education Federal Department favoured a "softer line" to build the troubled industry, the immigration ministry was for "a tougher stance", the report said quoting a source.
It further cited that there were moves last week to appeal to Education Minister Julia Gillard to intervene with Immigration Minister Chris Evans over country's USD 18.6 billion export education industry as unilateral interventions in its highly exposed business model.
However, another sources said any such move seemed futile as Gillard's office "has no intention of interfering" in Evans portfolio.
A spokeswoman for Gillard also commented that the two departments had "a high level of co-ordination" between them.
Veteran University of NSW pro vice-chancellor Jennie Lang said Australia had to ensure that the skilled occupation list, which applied at the point of a student's enrollment, carried through for the duration of study should they wish residency.
"Students need certainty and, given the list will be changing annually, Australian universities will find themselves in a situation where students will apply for one-year masters-level programmes.
We will lose top undergraduate and higher degree by research students to other destinations," Lang said.
Apart from this a peak international educators association also accused Immigration Department of "serious bad faith" over its intention to create new powers for the minister to cap residency applications by former overseas students.
Dennis Murray said the education sector was "doubly aggrieved" by Immigration Department proposal given it wasn't raised at an industry consultation meeting in Canberra two weeks ago.