UNIVERSITIES are witnessing their own "two-speed economy" with healthy onshore growth in international students as offshore markets stumble.

"We are seeing a two-speed sector, if you like: strong growth for the universities from onshore in Australia but troubled and inconsistent results from our offshore markets," said Jeffrey Smart, pro vice-chancellor (international and recruitment) for Swinburne University of Technology.

He said Australia had to quickly make its student visa arrangements more welcoming in order to replace the foreign students already here.

He was commenting on a trend in higher education visa statistics highlighted by IDP, Australia's biggest recruiter of overseas students.

In 2009-10, onshore grants of higher education visas rose by 16.6 per cent, in stark contrast to a 24.8 per cent decline in offshore grants.

In a newsletter, IDP said onshore grants kept growing "as students change courses or institutions to try and meet new criteria for skilled migration, or decide to study further because they are not able to get employed in their field of study".

The old skilled migration regime favoured vocational training in courses such as cookery and hairdressing as quick and cheap avenues to permanent residency. The new regime gives preference to more advanced university training.

Mr Smart pointed to the "wealth of preparatory programs that international students spend time in on their way to a higher education destination".

"We've had a couple of years of strong growth in international education leading into the recent downturn," he said. "This means that there are large numbers of international students onshore in Australia's schools and colleges preparing themselves to enter a bachelors or masters degree.

"Australia is performing very well as a market for international students moving into the universities. The real story here is what happens to this critical supply of new students when the preparatory pipelines are depleted."

In October, Monash University's vice-chancellor Ed Byrne pointed to the depletion of its pipeline, Monash College, when announcing a $45 million savings target across the university.

The college, source of half the overseas students who end up in the Monash business faculty, had suffered a 30 per cent fall in numbers, he said.