Warnings against a putting a limit on international student places say the changes could put thousands of jobs at risk and seriously stifle university research efforts.
A draft bill announced in May by Education Minister Jason Clare would give him the power to set a maximum number for new international student enrolments for courses and providers.
Almost immediately, leading policy experts described the proposal as a 'recipe for chaos'.
Tara Cavanagh is the Group Manager of Immigration Policy at the Department of Home Affairs.
She says the laws introduced in the bill are necessary to better manage a migration system where people are using student visas to bypass the usual ways to get into Australia.
"There is evidence of exploitation of overseas students and of actors in the sector who seek to subvert Australia's migration and education systems to enable the entry of people into Australia for purposes other than study. This exploitation can range from providing poor-quality education products, to high student fees and false promises of pathways to permanent migration. The problem extends to grave instances of sex trafficking, bonded labour and slavery-like conditions for people entering the country on a student visa. Such activity and funding is supporting networks of criminal activity inside and outside Australia."