According to the immigration department, student visa applications for the vocational education sector plummeted to 19,530 in the period from October and December 2009.
Across all sectors of education, there was a 15 per cent drop in visa applications, The Age reports.
A sharp drop in applications from India has also been recorded.
Universities Australia chief executive Glenn Withers said: "Essentially, all countries except India have increased their desire to study in Australia. Parents who had choices were beginning to send their children elsewhere."
Apart from racial attacks, college collapses and unscrupulous practices by operators and education agents caused "collateral damage" to Australia's educational sector, Dr Withers said.
Meanwhile, Australian Education Minister Julia Gillard said: "Despite recent troubles impacting on our international education sector, indicative data suggests that growth in international enrolments at university is holding up. The overall decline in student visa applications is expected to impact mostly on the VET sector." (ANI)