Record November grants extend Australia’s third student visa boom

If the extraordinary November 2024 offshore student visa grants for the higher education sector continue, the Government will have an even bigger challenge than it already had to resolving Australia’s third student visa boom and reducing net migration to the Treasury forecasts.

Australia has had two previous student visa booms. The first started in the late 1980s and took five to six years to fully address. The second started around 2006-07 and also took many years to address.

The third had already started prior to COVID – we had around 800,000 students and former students on temporary visas in 2019 many of whom were stuck in immigration limbo – and took off in 2022-23 once borders reopened and the Coalition Government stomped on the student visa accelerator. That was at the behest of both universities and business lobbyists.

Each student visa boom has three stages:

1. highly facilitative visa policy leading to a rapid rise in offshore visa grants with all manner of education providers taking advantage of the opportunity to make easy money by preying increasingly on students who are focused on work rather than study;
2. recognising things are getting out of control, the Government acting to stem the flow of students by tightening visa policy; and
3. the Government trying to find a way to resolve the visa status of a large cohort of students who are unwilling to go home; cannot secure permanent residence and will use every method possible to extend stay (usually with the assistance of education/migration agents).

In the first two student visa booms, the Government essentially gave up trying to get the students to go home. It would have been too costly and taken a very long time with little prospect of success. The Government instead created special visa pathways to permanent residence for the students and increased the size of the migration program to accommodate them.

Many of the students currently in Australia on either a student visa or former students on another temporary visa (around 1.1 million altogether) will be hoping the Government takes a similar approach. That is unlikely given the Coalition’s position to reduce the migration program rather than help address a problem it largely created (and the Labor Government allowed to continue for far too long).

Where are we with the current student visa boom?

There are a few crucial differences between the current and the previous two booms.

First, this boom is much bigger than the previous two. The last boom peaked in terms of student net migration arrivals at around 153,000 in 08-09 and then fell quickly to around 73,000 within two years. Student net migration departures peaked at around 50,000.

The current boom peaked at over 277,000 net migration student arrivals in 22-23 before falling to 207,000 in 23-24. Despite major policy tightening over the past 12-18 months, this is unlikely to fall much further thus extending the current student visa boom.  

Second, universities are much bigger players in the current boom compared to the last two which were dominated by private vocational education and training (VET) and English language providers. The political power of universities, particularly the Group of Eight, is much greater than private colleges and will make it much harder to resolve the boom.

The big universities will do all they can to prevent the Government from resolving the boom. They are now addicted to the tuition revenue and have little interest in the wider public policy issues.

As in the last two booms, the Government has significantly restricted the ability of private colleges to recruit directly from overseas and is seeking to do the same for onshore recruitment.

The now-defunct student capping legislation, a blizzard of policy changes and vociferous complaints by universities notwithstanding, in November 2024 the Government had not made a dent in overseas recruitment by higher education providers (see Table 1). Indeed, offshore student visa grants for the higher education sector set a new November record.

While some higher education providers may complain about onshore poaching of their students, particularly by private VET providers and lower-tier higher education providers, that problem seems to have been slowed by the Government’s policy tightening after the frenzy of this practice both pre-COVID and in 2022. To the extent the problem remains, universities may need to reflect on their own poor recruitment practices and an inability to retain the students they recruit (see Table 2).

Note the relatively small November 2024 onshore visa grant outcome hides a massive onshore student application backlog of over 100,000 and the consequences of a large increase in the refusal rate. That is leading to a rapidly rising backlog of onshore student appeals at the Administrative Review Tribunal (over 21,000 and rising by around 2,000 per month).

An even bigger risk is that the already rising number of students applying for asylum will rise even more rapidly. That, too, was a problem that started under the Coalition while Labor has not done enough to address it.

If the record offshore student visa grants in November 2024 continues in December, January and February, and no one should assume Ministerial Direction 111 is a de facto cap that will prevent this, we can expect the current student visa boom to continue for a lot longer than the first two booms.

It would mean that:

• net migration student arrivals would be substantially higher than forecast by Treasury; and
• net migration student departures, which Treasury is already forecasting will rise rapidly to all-time record levels, would need to rise even faster to deliver the student net migration levels forecast by Treasury. Net migration student departures in 2023-24 were around 30,000. Treasury is forecasting this to rise to 43,600 in 2024-25; 83,700 in 2025-26; and 113,500 in 2026-27.

If the record November 2024 offshore student visa grants continue, Treasury’s overall net migration forecasts would again be in deep trouble (with the inevitable political consequences). More importantly, the number of students and former students on temporary visas stuck in immigration limbo would continue to rise.

The Government desperately needs a mechanism to:

• better control student visa grants;
• genuinely target academic excellence; and
• provide for greater certainty of individual visa outcomes.

But it may now be too late to do so ahead of the forthcoming election.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Bluesky @abulrizvi.bsky.social.

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