Not-For-Profit Higher Education Outside Of The U.S. Outlook 2025: Credit Stability Amid Market Turbulence

The inflow of international students to Australia rebounded strongly post-pandemic in 2023, but then slowed in 2024 as the government tightened visa processing, implemented tougher rules for English language standards, and more than doubled the visa application fee to A$1,600 (US$1,100), one of the highest in the world. These measures were a political response to perceptions that high inbound migration has contributed to a domestic housing shortage. In May 2024, the government further announced that it would cap new international enrollment from 2025 onward, with caps to be implemented on an institution-by-institution basis. However, the enabling legislation now seems unlikely to pass parliament, given a surprising last-minute alliance between the center-right Coalition and left-wing Greens to block it. This will

...- S&P Global Ratings believes that rated public not-for-profit universities outside of the U.S. are well situated in their markets and will sustain sufficient liquidity to support generally stable credit profiles in 2025. - However, government policies stemming the inflow of international students will reduce revenue in the near term and threaten to harm the international reputation of affected institutions over the longer-term. - We expect that downside risks will continue to outweigh revenue opportunities in 2025, with the potential to erode financial cushions and highlighting the need for management teams to take effective action to limit the impacts on operating performance....

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