Australian educators on Thursday welcomed a federal government review of the student visa program, which aims at enhancing the competitiveness of the international education sector.

Immigration Minister Chris Bowen and Tertiary Education Minister Chris Evans announced the review on Thursday.

The move came as the education sector had come under increasing pressure as a result of the rising value of the Australian dollar, the impact of the global financial crisis abroad and growing competition from the United States, New Zealand and Canada for international students.

"The size and nature of the international education sector has also changed dramatically over the past decade and it is critical that we take a whole-of-government approach in responding to these changes," Senator Bowen told reporters in Canberra on Thursday.

Bowen said the new measures include reducing visa assessment levels for Chinese and Indian applicants and refining the rules for pre-paid boarding fees so they are counted in cost of living requirements in applications.

Australian Council for Private Education and Training (ACPET) acting chief executive Clare Field welcomed the review, saying that it is critical to stopping the industry from contracting further, and would provide a welcome opportunity for industry consultation to help stabilize the sector.

"This is a very important review for the stability, prosperity and future of Australia's third largest export industry and I congratulate the Australian government on responding effectively to the concerns of industry in drafting the terms of reference," Field told Australia Associated Press (AAP) on Thursday.

Field said it was critical the growing disparities between Australian, U.S., Untied Kingdom and Canadian visa practices were addressed to avoid the industry contracting further, jobs being lost and institutes closing.

Meanwhile, Universities Australia Chairman Peter Coaldrake said the review could not be more timely.

The latest government figures showed a clear decline in higher education international student enrollments, after increasing at 11 percent a year for the past eight years.

Coaldrake said the strong Australian dollar is not the sole reason for the declination, but a perception that Australia was not welcoming or safe was part of the reason behind the decline in numbers, along with the Global Finance Crisis.

"This downturn in enrollments has significant implications not just for Australia's higher education system, but also for the nation itself due to the flow-on contribution international students make to domestic employment as well as improving our cultural awareness," he told AAP on Thursday.

Former New South Wales Labor politician, Michael Knight has been appointed to head up the review, and tasked to recommend more effective frameworks between key players and requirements for student visa applicants. He is expected to report to Bowen and Senator Evans by mid next-year.