International education contributed $18.3 billion to the Australian economy in 2010, down slightly from $18.7 billion on the last financial year.
Education services is Australia's largest services export industry, ahead of personal travel services and professional and management consulting services.
Australian universities rely on international students to generate the majority of their income from fees. However, universities have raised concerns that a strong dollar, tightening migration rules and safety concerns following alleged attacks on Indian students last year may have discouraged new enrolments from overseas students.
Figures released from Australian Education International (AEI) show income generated from education related travel services for India slumped 15% between 2009 and 2010. Overall, total education related services exports were down by 0.3%.
Minister for Tertiary Education and Skills, Senator Chris Evans, said: "Our international student sector faced a number of challenges in 2010 such as a stronger Australian dollar, the ongoing impact of the global financial crisis in some countries, strong competition in the education market and stronger student visa integrity measures.
"I congratulate the international education sector for continuing to achieve strong results in the face of these challenges."
Senator Evans added international students will be better protected by a number of recommendations implemented after the Baird Review, including strengthening education providers' registration requirements and expanding the role of the Commonwealth Ombudsman for external complaints by international students relating to private providers.
According to the AEI, income generated in New South Wales by education services amounted to $6.5 billion or 36.7 per cent of export income from all onshore students in 2010. Income in Victoria and Queensland was $5.5 billion and $2.8 billion respectively, while income in the other States and Territories was a further $2.9 billion.