Foreign students comprise more than a fifth of all enrolments in Australia's universities, and the 175,000 studying on and offshore contribute A$4.5 billion (£1.83 billion) a year to the national economy and some A$1.5 billion to university revenues.
Overseas student numbers increased by 15.5 per cent in the past 12 months, according to figures released by the national recruiting agency, IDP Education Australia.
Although Asian students comprise 80 per cent of the total, enrolments from Britain, Canada, France and Germany all rose by more than 30 per cent.
Universities have actively pursued education exports in a push that has seen foreign student numbers more than double in the past five years. In 1998, fewer than 80,000 foreigners were enrolled, of whom 72 per cent were studying onshore.
This year, a record 115,000 foreign students are on campus in Australia, although universities continue to boost the number studying in their home countries. Almost 60,000 students are based offshore and one in five is taking distance education or online courses, while the rest attend a campus run by the Australian institution or a local partner.
In contrast, fewer than 2,500 Australian students are overseas either as part of an exchange or study abroad scheme.
IDP chief executive Lindy Hyam noted that the number of international students at Australian universities had increased from all the main source countries. This was despite concern about the impact of the war in Iraq, the terrorist bombing in Bali and uncertain economic conditions in many parts of the world.
Ms Hyam said growth was especially strong in some of the newer markets for Australian education in Europe. But the US, China, India and Malaysia were the fastest growing among the ten key source countries for Australian universities.
"One of the more interesting trends has been the strong growth from Europe," she said.
But vice-chancellors are concerned about the possible impact of the federal government's decision to increase visa fees and to impose higher registration charges on institutions running programmes for foreign students. They fear the increased costs could drive students elsewhere.