By Stuart Condie

SYDNEY--Major shifts in how governments view foreign students are challenging a leading Australian business that earns lucrative fees from placing scholars at global colleges.

On Tuesday, ASX-listed IDP Education blamed policy changes in North America, Australia, and the U.K. for a steeper-than-expected fall in the number of students it expects to place at colleges this fiscal year.

IDP, which receives a slice of tuition fees paid by the students it acquires on behalf of colleges, had already flagged headwinds, including from increased U.S. visa rejections that could hit placement numbers and discourage future applicants.

U.S. conditions have now deteriorated further due to negative rhetoric toward international students, IDP said Tuesday. It highlighted the Trump administration's attempt to block Harvard from enrolling foreign students.

"The conditions that need to be in place to really drive that sustainable growth is both the stability in policy settings as well as that positive rhetoric and welcoming tone towards students," said Tennealle O'Shannessy, IDP's chief executive.

Tone isn't just a problem in the U.S., O'Shannessy said. She also called out mooted policy changes in the U.K., where the government wants to tighten visa conditions and cut how long students can stay in the country after graduating.

Until recently, IDP Education had grown on a steady wave of student migration. For more than 20 years until the Covid-19 pandemic, the annual number of globally mobile students rose by more than 7% per annum, according to UNESCO.

That helped lift IDP's annual revenue by more than 90% over the four full fiscal years before the pandemic and fueled a surge in its shares. Its stock rose more than tenfold in value between the end of 2016 and late 2021, when Covid-era restrictions on travel were being scrapped.

However, record migration to countries including Canada and Australia have since prompted tighter government regulation amid concerns about housing supply and job markets.

The company has been disappointed in its hopes for a looser immigration policy in Australia and Canada following recent federal elections in those countries.

"That was quite difficult to achieve pre-election for Australia and Canada. We're watching closely for any updates," O'Shannessy said.

Shares in IDP, which had already retraced much of their recent gains, tumbled almost 50% on Tuesday as the 56-year-old company downgraded its outlook for the second consecutive year.

It said it was looking at cutting costs to position itself for an eventual return to more favorable conditions.

"We've been laser-focused on new hires and replacements, really only replacing them where they drive revenue and where we don't have the skill-set in house," Chief Financial Officer Kate Koch said.

The stock was down 47% shortly before the close at 3.99 Australian dollars, equivalent to about US$2.59. That's down 90% from its 2021 peak.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

June 03, 2025 01:43 ET (05:43 GMT)

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