Canada Faces 60–70% Plunge in International Students Under New Rules

(CANADA) Canada’s intake of new international students fell by as much as 60–69% in the first eight months of 2025 compared with the same period last year, after Ottawa tightened study permits as part of a broader immigration overhaul. Fewer than 90,000 new students arrived between January and August 2025, marking the steepest contraction in recent memory and signaling a dramatic reset for a sector that had become central to university finances and local economies.

Government data show only 44,105 new arrivals from January through July 2025, down from 142,175 in the same period in 2024, a 69% drop. The approval rate for study permits also plunged, falling to 30% in 2025 from 51% in 2024, while the total number of people in Canada holding valid study permits declined to 785,830 in July 2025, from 1,023,785 in January 2024. Ottawa’s effort to reduce temporary residents is reshaping student flows quickly and visibly: combined study and work permit holders were down 22% by August compared with a year earlier, the lowest level since 2021.

The Immigration, Refugees and Citizenship Canada (IRCC) department attributed the fall to new policy settings designed to cool population growth and housing demand. The agency called the decline

“a clear sign the measures we’ve put in place are working,”

saying the cap on study permits, tighter eligibility checks and changes to post-graduation work rules were calibrated to relieve pressure on rents and public services. Prime Minister Mark Carney’s government has cast the measures as a necessary course correction, even as colleges, universities and student recruiters warn of mounting financial strain.

Under the new cap, Ottawa set a ceiling of 437,000 study permits for 2025, a 10% reduction from the previous year’s cap. But approvals are running far below that level. From January to June 2025, Canada processed 104,980 study permit applications, down 53% from 223,551 in the same period of 2024, and approved just 31,580, a 72% fall from 113,368 a year earlier. The rejection rate climbed to 62% in 2025, the highest in a decade. For would-be students and their families, especially in countries that send large cohorts to Canada, the lower approval odds and added paperwork have become a decisive deterrent.

Canada’s universities and colleges report that the reduced intake is already forcing budget cuts. Institutions that had come to depend on higher international tuition—a major share of operating revenue in many provinces—are laying off staff and suspending or consolidating programs. Administrators say the situation is more acute at smaller colleges and at institutions outside major cities that had limited reserves to buffer a sudden shock. Student housing projects, many planned during a period of rapid growth in enrolment, are also being reassessed.

The policy shift has been felt sharply in India, historically Canada’s largest source of international students. Indian media have reported fewer departures for Canada this year and rising uncertainty among families who had invested in study plans expecting steady processing and generous post-graduation work options. Recruiters and education consultants say prospective students now scrutinize whether a chosen program qualifies for a post-graduation work permit and whether the financial proof requirements can realistically be met, given currency swings and higher documented funds thresholds.

The government’s goal is to reduce temporary residents, including students, to 5% of Canada’s population by the end of 2026. That aim was paired with stricter eligibility rules, including tougher financial proof and more selective recognition of programs that lead to work permits after graduation. The recalibration marks a shift from the previous decade, when policymakers and institutions actively promoted Canada as a stable, open destination for education and skilled migration. IRCC has said the tighter standards are meant to address abuses and ensure that study permits go to bona fide students in high-quality programs, while easing pressure on cities facing housing shortages.

The international education sector, however, is voicing alarm at the scale and speed of the decline.

“The international education sector is rightly concerned that study permit approvals are far below the caps, but the news release makes clear those concerns are not shared by the Carney government,”

said Matthew McDonald, a Regulated Canadian Immigration Consultant. Industry groups say the gap between the cap and the number of approvals signals a policy stance more restrictive than the headline ceiling suggests, leaving institutions struggling to plan for the fall and winter terms.

The Canadian Bureau for International Education (CBIE) is urging Ottawa to adopt a renewed International Education Strategy to stabilize the sector. The organization has emphasized the broader economic benefits that students bring, including consumer spending, part-time work in key sectors, and the skills pipeline for employers seeking early-career talent. The CBIE stated:

“International students contributed nearly CA$40 billion to Canada’s economy in 2022, supporting local communities and addressing labour shortages.”

Universities Canada and college associations have warned that without a clearer outlook on approvals, campuses will continue to trim offerings, with smaller programs and regional campuses most at risk.

For Canada, international students have long been more than visitors on study permits. Many remained after graduation, moving into the labour market through post-graduation work permits and, eventually, permanent residency routes. In sectors from technology to retail and hospitality, employers relied on steady student numbers to fill shifts and specialized roles. With combined study and work permit holders down 22% versus August 2024 and the total number of valid study permits falling 23% from early 2024 levels, businesses that depended on student workers are recalibrating schedules and hiring plans.

The decline is also changing the dynamic within the classroom. Departments that grew quickly to meet international demand—business, computing, health administration—are balancing fewer enrolments against faculty workloads and accreditation requirements. Some institutions are offering deferred admissions or rolling intakes to hold onto accepted students who need more time to meet new financial proof thresholds or gather documentation. But the sharp drop in approvals suggests that deferrals alone will not bridge the gap to next year’s targets.

Prospective students face not just lower odds of approval but also longer decision timelines as IRCC implements new screening rules. Consultants report that one of the most common questions now is whether a given program still leads to a post-graduation work permit, a critical factor in calculating the return on investment for families. The new rules on eligibility have closed some pathways and tightened others, prompting students to compare Canada more closely with competitor destinations that advertise clearer or more generous post-study work options. The shift has fed concern among institutions that Canada could lose market share for years, even if caps are relaxed later.

Policy advocates say the steep fall in approvals reflects not only the cap but also the stricter vetting. IRCC’s approval rate of 30% this year, compared with 51% in 2024, suggests that a larger share of applications are being screened out before they get near the cap. That is consistent with the 53% decline in processed applications over the first half of 2025. For students who apply, a 62% refusal rate is reshaping the calculus: families with limited resources may be reluctant to pay application fees, tuition deposits and living costs without reasonable certainty of a visa.

Universities and colleges argue that the financial pressures are compounded by limits on domestic tuition increases and rising operating costs. Some have announced layoffs, citing lower enrolment and uncertainty over future intakes. Program cuts can ripple through local economies, affecting campus jobs, rental markets and small businesses that serve students. In communities where international enrolment had become an anchor—supporting landlords, transit systems and local retailers—the downturn is already visible in quieter campuses and reduced spending.

Analysts note that a swift contraction in international students could affect research output and specialized programs that rely on graduate enrolment, though the latest data focuses on undergraduate and college-level flows. Institutions with strong reserves and diversified student bodies may weather the storm, while others, especially those in smaller cities, face harder choices. Some are retooling recruitment to broaden the pool of source countries, but the structural headwinds of lower approval rates and stricter eligibility rules remain dominant.

The political calculus behind the overhaul rests on easing housing and infrastructure strains that have dominated public debate. Ottawa argues that fewer temporary residents will help stabilize rents and give provinces and municipalities room to expand services. In that context, the government sees the fall in study permits as evidence that policy is moving the needle. Supporters of the cap say the previous model placed too much pressure on students, some of whom arrived without adequate housing or support, and on communities scrambling to keep up with fast growth.

Yet education groups contend that well-managed international enrolment can coexist with tighter housing policy, and that students, most of whom arrive as adults with savings and plans, bolster the economy. Their call for a renewed International Education Strategy aims to create clearer, predictable rules that tie study permits to quality assurance and verified capacity at institutions and in local housing markets, while preserving a pipeline of talent. Without that framework, they warn, Canada risks eroding its reputation as a reliable destination.

The numbers underscore the speed of change. From January through July 2025, new student arrivals fell to 44,105, compared with 142,175 a year earlier. Over the first half of the year, 104,980 applications were processed versus 223,551 in 2024, and 31,580 permits were approved, down from 113,368. The overall population of study permit holders contracted from 1,023,785 in January 2024 to 785,830 by July 2025, while approvals have tracked well below the 437,000 cap. The swing is historic by recent standards, with the highest visa rejection rate in a decade and the smallest pipeline since 2021 when combining study and work permits.

For students weighing options now, the official rules are laid out by IRCC, including financial proof and program eligibility criteria that determine who may receive a study permit and whether a course of study leads to a post-graduation work permit. The department’s guidance is available on the IRCC study permits page, which also explains processing and the role of designated learning institutions. Advisors recommend that applicants check whether their offer of admission aligns with the most recent eligibility list and understand that approval odds have tightened significantly this year.

In the absence of a quick policy pivot, the near-term outlook points to continued strain for institutions and reduced inflows of international students through the end of the year. The CBIE’s warning about lost economic activity is echoed on campuses confronting smaller cohorts and slimmer budgets.

“The international education sector is rightly concerned that study permit approvals are far below the caps, but the news release makes clear those concerns are not shared by the Carney government,”

said Matthew McDonald, capturing the divide between a sector seeking stability and a federal strategy focused on population targets.

What happens next will depend on whether approvals pick up relative to the cap and how strictly the new eligibility rules are enforced. Universities and colleges are recalibrating recruitment timelines and financial plans in case the contraction extends into 2026, when the government aims to bring temporary residents down to 5% of the population. For now, the reality is stark: Canada is issuing fewer study permits, approval rates are at historic lows, and international students are arriving in far smaller numbers than a year ago. The consequences are already visible in classrooms, on payrolls and across the communities that had grown around a decade of steady growth in international enrolment.