THE keenly anticipated new priority skills list must better recognise general skills from commerce, arts and science graduates or high-quality overseas students will avoid Australia, Universities Australia has warned.

As overseas students' anxiety increased with the unexplained delay over the Skilled Occupation List, the peak university body linked reform of skilled migration to success in achieving the federal government's graduate growth targets.

Yesterday, UA chief executive Glenn Withers said universities "very much welcomed" the new immigration focus on high-level skills and on visa integrity. However, the SOL must "better recognise general skills from commerce, arts and science graduates, and not only very narrow specialised skills, or many high-quality international students will simply go elsewhere for study and settlement", Dr Withers told the HES.

Better balance in the skilled migration program was also needed as the priority for sponsored migrants "allowed queue-jumping" at the expense of more highly skilled independent migrants, he said.

It was also essential that university lecturers and tutors "remain squarely" on the SOL if universities were to deliver on the Rudd government's graduate growth targets for young Australians, he said.

The views had been conveyed to the government and would be fundamental to the sector's future for staffing and for international education.

University of Melbourne migration visa expert Lesleyanne Hawthorne said as the independent category used by students was squeezed, having an occupation on the list became "a key determinant" for priority processing.

TAFE Directors Australia said the overall lack of clarity over the SOL "was costing TAFEs dearly and causing great damage" to Australia's international education image.

"Irrespective of occupations on the SOL, the future rules that will apply to international students on finishing their study in Australia are still far from clear," acting TDA director Pam Caven told the HES.

Removal of chefs, bakers, cooks and horticultural occupations from the SOL would have adverse effects on overseas student fee revenue and skills shortages, she said.

Meanwhile, a dramatic drop in the number of overseas students for March has been blamed on policy uncertainty, the strong Aussie dollar and adverse publicity over student safety.

Universities so far appear to have been insulated from the troubles, recording almost 12 per cent growth over this time last year and holding up the $17 industry's boom to almost 6 per cent growth on last year.

However, the English language, vocational training and schools sectors plunged into negative territory in the wake of the fallout from last year's student attacks and the Rudd government's crackdown aimed at decoupling education from immigration.

English language starts, which feed into vocational and higher education, crashed to negative 13 per cent, while vocational education fell to negative 1.6 per cent, down from roaring growth of almost 40 per cent just two years ago.

Enrolments from China - Australia's No 1 source market - continued to grow at 16.6 per cent, but was well down from almost 20 per cent growth the previous year. However, enrolments from India - which recorded growth of almost 40 per cent last year - led the crash into negative territory, recording enrolments of minus 2 per cent on last year.