Australia will not allow foreign students to return as Canberra prioritises the return of locals stuck overseas, Prime Minister Scott Morrison said on Friday.
Australia has since March closed its borders to all non-citizens and permanent residents in a bid to slow the spread of Covid-19.
With foreign students worth about A$35 billion ($25.3 billion) a year to the Australian economy, Canberra had hoped to slowly allow overseas students to return in 2021. Trials began earlier this year.
But with thousands of Australians wanting to return, Morrison there is not enough quarantine facilities.
"There is a queue, and Australians are in the front of the queue," Morrison told reporters in Canberra.
Australia caps the numbers of locals allowed to return home each week in order to minimise the risk of spreading Covid-19.
Once locals arrive, they enter hotel quarantine for two weeks.
The policy deepens a financial black-hole facing Australian education providers, estimated to be worth between A$3.1 billion and A$4.8 billion this year alone, Catriona Jackson, Chief Executive of Universities Australia, told Reuters earlier this year.
Several leading universities have announced sweeping job cuts in a bid to reduce costs.
In October, Morrison's government said it will spend A$1 billion to support university research amid the fall in overseas students.