By Dominic Giannini in Canberra

The education minister is working to reassure universities and VET institutions an impending cap on international students will make the system more sustainable following concerns about hits to bottom lines.

International student enrolments have jumped from just over 520,000 to more than 810,000 in the past two years, which has resulted in shonky education providers trying to “make a quick buck” by gaming the system, Jason Clare said.

“That growth… has lured people who really are here to work, not study,” Mr Clare told the Australian Financial Review’s higher education summit on Tuesday.

“It’s put the reputation of this industry under pressure, that’s a fact,” Mr Clare said.

The university sector has criticised an incoming international student cap.

Details on the individual caps for each of the some 1100 international education providers throughout Australia and the fate of a controversial ministerial direction would be unveiled “in the coming week”, Mr Clare said.

The timing is subject to legislation passing parliament, but is expected to be in place for 2025.

A government direction – known as ministerial direction 107 – throttled student visas to bring the system under control, but has led to some consequences for regional universities.

The direction has favoured affluent Chinese students who attend inner-city universities, while impacting regional institutions with a more diverse student base.

“Some universities have benefited from it, but some have been hit hard,” Mr Clare said.

“It’s why a lot of universities have asked me to act to put more sustainable arrangements in place.

“This will be a better way to manage international education.”

Peak body Universities Australia called for the direction to be scrapped, saying it “undermined our efforts as a sector to diversify our international student base and is creating significant financial anxiety and pain for universities”.

“Particularly those in regional Australia and outer suburban areas,” CEO Luke Sheehy said.

Higher education visa grants were down 23 per cent in the past year, the equivalent of about 60,000 students and a $4.3 billion economic hit, Mr Sheehy said.

The decline in students could cost the university sector some 14,000 jobs, “not to mention the flow-on effect for small businesses which rely heavily on students”, he said.