Canada Sees 62% Drop in International Student Approvals in 2025: Can Universities Adapt to the Shrinking Intake?

A Historic Decline in International Student Approvals

Canada’s international education sector is witnessing a sharp and historic downturn. According to data shared by ApplyBoard, the number of new post-secondary study permits in 2025 is projected to fall to just 80,000, representing a 62% decline from the previous year and marking the lowest intake in a decade.

This steep drop surpasses even the decline experienced during the Covid-19 pandemic and signifies a major shift in Canada’s global student recruitment landscape. Notably, onshore students—those already studying in Canada—are expected to make up nearly two-thirds of all study permits issued this year, transforming the composition of the country’s international student community.

New Study Permit Caps Trigger the Decline

The downward trend stems largely from the federal government’s study permit caps introduced in 2024 and tightened further in 2025. ApplyBoard reports that the number of new international student approvals has dropped to a historic low, signaling a critical moment for Canadian higher education.

“This projected volume represents the lowest intake of new international students witnessed in the past decade, signalling an unprecedented shift in Canada’s global student recruitment model,” ApplyBoard stated.

Through August 2025, the approval rate for post-secondary study permits had fallen sharply to 37%, compared to the 60% assumption used in the government’s initial cap calculations.

Canadian Colleges Hit Hardest

Among all post-secondary institutions, colleges have been hit the hardest. Data indicates that nearly 80% of study permits issued for college programs in 2025 are extensions for onshore students, leaving fewer than 30,000 new permits for incoming international applicants.

According to ApplyBoard, “Colleges are on pace to account for about 30% of all new Canadian study permits issued in 2025, down from 57% just two years ago.”

In contrast, universities are showing early signs of stabilization, with study permit approval rates for university programs rising from 30% in May to 55% in August 2025.

Onshore Students Dominate the New Landscape

The surge in onshore study permit extensions is reshaping the international education sector. Nearly two-thirds of all post-secondary study permits this year will go to students already in Canada, a trend that could have long-term consequences for diversity and new enrollments.

ApplyBoard noted, “This substantial increase in the proportion of issuances for study permit extensions is nearly inverse to other non-pandemic years.”

Experts warn that the over-reliance on extensions could result in a steep decline in the total international student population by 2026, potentially shrinking it by up to 50% if new approvals remain low.

Summer Approvals Show Modest Recovery

The summer of 2025 brought a slight improvement in new approvals. Between June and August, Canada issued over 35,000 new post-secondary study permits, compared with just 23,000 during the first five months of the year.

While the university approval rates appear to be returning closer to IRCC target levels, colleges continue to face severe challenges, with their approval rates stagnating around 25%.

The Broader Impact on Canada’s Education System

The implications of this sharp decline extend beyond institutional numbers. The shrinking intake of new international students poses challenges for financial stability, campus diversity, and long-term enrolment sustainability.

With fewer international students arriving, many colleges and smaller universities that depend heavily on international tuition revenue could face financial strain. At the same time, the reduction in students from countries like India, the Philippines, and several African nations threatens to erode the cultural diversity that has long been a cornerstone of Canada’s academic environment.

ApplyBoard warns that if the downward trend continues, Canada’s total international student population could drop by half in 2026, fundamentally reshaping the global perception of Canadian education.

Universities Adapt to a New Reality

Despite these challenges, universities are demonstrating cautious optimism. Data shows that approval rates for university programs improved from 30% in May to 55% in August 2025, suggesting that higher education institutions are adapting more effectively than colleges.

Currently, universities report an almost 50/50 split between new and onshore students, a balance that has helped them maintain relative stability amid the sector-wide contraction.

According to ApplyBoard, “While university approval rates are returning to IRCC target levels, Canadian colleges continue to face significant challenges with approval rates remaining around 25%.”

Looking Ahead: Can Canada Rebuild Its Global Standing?

As Canada navigates this critical moment, educational experts and policymakers face pressing questions: Can universities and colleges adjust to the shrinking international intake while maintaining quality and inclusivity? Will the government revisit its permit caps to balance economic needs with immigration goals?

The year 2025 may well mark a turning point for Canada’s international education system. The 62% drop in new international student approvals reflects not just policy shifts, but a deeper transformation in how the country manages global talent and education access.

While universities are showing resilience, Canada’s ability to attract new talent, support institutional sustainability, and preserve its reputation as a global education hub will depend on how quickly and effectively it adapts to this new reality.