But international-student advocates warn more incentives are needed to make it a viable option.
Australia is hosting an unprecedented number of international students, and almost all are choosing to settle in the country's capital cities.
The Australian Bureau of Statistics says more than 786,000 international students enrolled in Australian universities last year -- but just over 3 per cent of them in regional areas.
The Federal Government wants to see that percentage increased.
Prime Minister Scott Morrison is believed to be considering a plan to force more international students to study at regional universities in a bid to ease overcrowding in Sydney and Melbourne.
He is already talking about the need.
"In the north, they want more population. In Adelaide, they want more population. But I can tell you, in the outer suburbs of Sydney and Melbourne, they don't. And so it's about how you manage population, and there are plenty of levers for how you do that. And our Government is working very, very, very strongly on those issues."
Regional universities say they are open to the idea.
Annabelle Duncan, vice-chancellor at the University of New England, in the north-eastern New South Wales city of Armidale, says there are many advantages to regional study.
"The common language between all of the international students and the domestic students is English, so they practise their English a lot more. They also interact a lot more with the people within the community here. So they get to have more of a true Australian experience."
While regional universities are pushing for the proposal to move forward, the body representing international students fears those universities lack the necessary facilities right now to make it a viable option.
The president of the Council of International Students Australia, Bijay Sapkota, says he believes it could deter students from studying in Australia at all.
"Regional universities, or institutions, might not have all the courses that the city universities would have. And, also, there could be less opportunity for work-integrated learning, because big corporations would be established in the city area rather than the regional area."
