International students feel alienated and unwelcome as the coalition teases its alternative to the federal government's overseas student cap.
The debate around Labor's proposal has leveraged foreign students as a scapegoat for Australia's housing crisis, National Union of Students president Ngaire Bogemann said.
"The message from the government was: we don't want you here, go somewhere else," she told AAP.
"It was treating international students like they were a problem, or the cause of a problem, that they had nothing to do with.
Stereotypes of international students have proliferated, painting them as rich, young people supported by their parents, even though many are also shouldering the burdens of the nation's housing shortage.
"This is damaging, not only for the students but also for the wider education system," Ms Bogemann said.
"It sets a lot of barriers between students.
"To shut the door to international students would be to lose diversity of opinion."
The federal government's legislation would limit the number of foreign students to 270,000 from 2025, after more than 445,000 commenced study this year.
Although the coalition supports reducing international student arrivals, Opposition Leader Peter Dutton has revealed his party will block Labor's proposal and put forward its own student cap plan.
He claimed overseas students were living in "pretty schmick" accommodation while Australian families were unable to buy a house.
"(International students) are taking up accommodation that should be occupied by Australian citizens," he told reporters in Canberra.
With weeks before the caps come into effect, Education Minister Jason Clare has lashed the opposition, claiming its refusal to support the bill undermined its credibility.
"What's going on in Peter Dutton's brain?" he said.
"You can't act tough on immigration and then vote against legislation to put a limit on the number of international students who come into our country every year."
The property sector has repeatedly dismissed claims international students are the cause of housing woes.
Research conducted for the Student Accommodation Council has shown that caps on overseas students would have a marginal impact on the housing market and save the average metropolitan renter about $5 a week.
These savings also will not be felt in outer-suburban areas, the report found.
"The phony war about international students causing a housing crisis in Australia has been going on all year," Universities Australia chief executive Luke Sheehy told ABC radio.
Government action on student numbers is already costing the Australian economy $19 million every day, according to Mr Sheehy, and this will only continue if caps are implemented.
"I want to build this sector, not wreck it," he said.
The Group of Eight, which represents Australia's largest universities, has also maintained the cap would have been disastrous for the sector.
Although students and university executives are aligned on this issue, Ms Bogemann notes their view stems from different concerns.
For the higher education providers, international students fees are integral to funding.
"But they should matter because they are human beings." Ms Bogemann said.
"Governments have failed to invest in higher education that now we have a sector that is financially reliant on international students.
"We're not going to break this cycle of international students being treated as cash cows until the federal government funds higher education."
