Australia’s universities are flagging the ongoing impact of COVID-19 pandemic could cost them billions in revenue over the next four years.

The higher education sector has been hit hard by a drop off in international students as the pandemic led to border closures.

The federal government’s early move to stop people coming from China was especially damaging, with that country the largest source of international students to Australia.

New modelling by Universities Australia, released on Wednesday, predicts the sector could lose $16 billion in revenue between now and 2023.

“We can’t pretend that won’t have a big impact,” UA chief executive Catriona Jackson said in a statement.

“Not only does that revenue support the staff and facilities to educate the next generation of skilled workers, it also pays for much of the research and innovation that keeps Australia internationally competitive.”

Ms Jackson said independent estimates show that between $3.3 billion and $3.5 billion annually of the research and development functions of universities could be at risk.

“The danger is that if universities are unable to continue funding this activity, Australia’s ability to innovate its way out of the COVID-19 recession will be severely hampered.”

The national cabinet’s guidelines for lifting restrictions say international students may be able to return once the nation reaches the third stage, anticipated in July.