According to the The Age report, the latest figures provided by the Federal Education Department, foreign students were now turning their back against the state's colleges.
"The decline in Indian student numbers in Victorian institutions plummeting 40 per cent, from 6303 to 3761," the report said.
Apart from India, students from Malayasia also recorded declining trend of 32 pc and Korea dropped by 13 pc, the report said.
Education agents have stressed that the drop in students enrolment is mainly because there were now a very strict visa rules for Indian students.
Besides, a large number of Indian youths were racially attacked in Australia for the past one year.