Universities Australia said government investment in research and teaching would be repaid by helping the economy rebound quickly after the crisis passed.
"For that reason, they are now more reliant on international students than they ever were in the past, so the loss of those students is a massive income drain on the universities," Dr Day said.
But the union said universities had only turned to international students for income after successive federal governments, since the 1980s, cut their funding.
"If you look at the global or the Asian financial crisis a few years ago, it took five years for the numbers of students to come back to Australia.
The closure of Australia's borders and subsequent loss of international students has hit university finances hard.