Post-secondary institutions in Prince Edward Island (PEI) are facing significant financial challenges as new federal regulations have reduced the number of international students they can enroll. The crackdown on student authorizations has led to steep declines in international student numbers, resulting in millions of dollars in lost revenue for institutions like the University of Prince Edward Island (UPEI) and Holland College. As a result, both schools are grappling with the implications of these changes, which threaten not only their financial health but also the diversity and scope of their educational offerings.
Decline in Enrolment: Holland College and UPEI Feel the Pinch
Holland College, a leading post-secondary institution in PEI, reported an 11% decrease in first-year international student enrolment in 2024. This reduction represents a significant revenue loss of around $1 million for the college. The situation is even more dire for UPEI, where international enrolment has dropped by nearly half, leading to a staggering $3 million shortfall in revenue.
Wendy Rodgers, the president and vice-chancellor of UPEI, expressed frustration over the situation, pointing out that the university has the capacity to accommodate far more students than it currently does. “We have room for them,” Rodgers said, emphasizing that the drop in student numbers is not due to a lack of infrastructure or resources but is instead the result of new federal restrictions on international student visas.
Federal Government’s Restrictive Policies
The decline in enrolment stems from new policies introduced by the federal government in January 2024. In an effort to address concerns about fraudulent diploma mills and other unethical practices in Canada’s education system, the government announced a plan to reduce the number of student permits issued by more than one-third. By September, the government took further steps, announcing an additional 10% reduction in 2025 and a freeze on the total number of student permits issued in 2026. The new target limits the number of student authorizations nationwide to 437,000 per year.
While the measures aim to prevent fraud and protect the integrity of Canada’s education system, they have inadvertently affected legitimate institutions like UPEI and Holland College. The Atlantic Canadian universities report, commissioned to assess the impact of the new cap, estimated that the region had already lost $163 million in revenue due to the reduced enrolment numbers.
Impact on PEI Institutions
For institutions in PEI, the consequences of these policies are becoming painfully apparent. Holland College, which has consistently relied on a strong international student base, is now feeling the strain. In the 2023-24 academic year, the college had approximately 750 international students, making up over 25% of its student body. Of those, about 500 were first-year students. The sharp decline in these numbers has left the college scrambling to adjust its budget and reevaluate its programming.
Sandy MacDonald, president and CEO of Holland College, voiced his concerns about the federal government’s approach. According to MacDonald, the government’s blanket restrictions, aimed at targeting “bad actors” in the education sector, have unfairly penalized legitimate institutions like Holland College. “We had no input. We were just told, ‘This is the way it’s going to be,'” MacDonald said. “The policy is, I don’t think, well thought through — and it’s certainly been poorly implemented.”
The Financial and Educational Fallout
For both UPEI and Holland College, the financial implications of the new federal rules are severe. International students typically pay higher tuition fees than their domestic counterparts, with the extra revenue used to fund essential services provided by the institutions. Without this additional income, universities and colleges must either reduce services, cut programs, or seek alternative funding sources.
Rodgers highlighted the critical role that international students play in maintaining the financial stability of publicly funded institutions. “It is an institution’s responsibility, especially for publicly funded institutions, to make sure that services are available for all learners that come to that institution,” she said. With fewer international students contributing to the school’s budget, UPEI may find it challenging to offer the same level of service to both domestic and international students in the future.
The ripple effects of reduced enrolment extend beyond the institutions themselves. International students bring diversity and new perspectives to the classroom, enriching the educational experience for all students. They also contribute to the local economy by renting apartments, purchasing goods and services, and participating in community activities. With fewer international students, both UPEI and Holland College risk losing this valuable contribution to campus life and the broader PEI economy.
Lack of Consultation and Poor Implementation
Both UPEI and Holland College leaders have criticized the federal government for implementing the new rules without consulting institutions or considering the potential impacts on their financial and educational stability. MacDonald, in particular, emphasized the indiscriminate nature of the policy. “Where the problem called for a scalpel, the federal government used a chainsaw,” he remarked, referring to the broad application of the student visa cap.
This “one-size-fits-all” approach has frustrated school administrators who believe that the federal government could have targeted fraudulent schools without harming legitimate institutions. MacDonald pointed out that institutions like Holland College carefully manage their international enrolment to ensure that the number of students aligns with the resources and infrastructure available in their communities.
Future Challenges and Adaptations
Looking forward, both UPEI and Holland College will need to adapt to the changing landscape of international student recruitment. With fewer student visas being issued in the coming years, institutions must find creative ways to fill the financial gaps left by declining enrolment numbers. This may involve intensifying efforts to recruit domestic students, expanding partnerships with businesses, or even lobbying the federal government for changes to the new policies.
However, reversing the trend will not be easy. With the cap on student permits set to remain in place for the foreseeable future, schools may need to adjust their long-term strategies and find new ways to maintain their financial stability and educational offerings.
Conclusion
The drop in international student enrolment at UPEI and Holland College is a stark reminder of the far-reaching consequences of federal policy changes. While the government aims to protect the integrity of Canada’s education system, its broad restrictions have left legitimate institutions grappling with significant financial losses and diminished diversity on campus. As schools like UPEI and Holland College navigate this new reality, they face the daunting task of maintaining their high standards of education with fewer resources and less international influence.
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