Consequences of not targeting student visa policy and a possible solution

Australia’s student visa surge hasn’t been fixed, it’s been deferred, and without tighter targeting, it will keep feeding backlogs, limbo visas and migration by accident rather than policy, writes Dr Abul Rizvi.

AFTER THE BOOM in student visas triggered by the Coalition Government’s unprecedented policies such as unrestricted work rights, fee-free applications and the COVID visa, the Labor Government belatedly tightened policy from mid-2023.

But no one should assume the consequences of that boom have now been resolved or that student visa policy is now on a path of so-called “sustainable growth”. We are a long way from that.

The surge in offshore student visas was the primary driver of the massive net migration boom in 2022-23 (see Table 1).

Onshore student visa applications and grants also surged (see Chart 1). The extraordinary peak in onshore student visa grants in late 2023 was an attempt to clear a massive onshore backlog in student applications, but that merely pushed the problem into the future. It solved nothing.

Subsequently, the Government has tightened its onshore student policy, including preventing visitors from applying for onshore student visas and increasing the refusal rate. But that has only increased the backlog of onshore student applications (see Chart 2) and created a massive backlog of student refusals at the Administrative Review Tribunal (A.R.T.) (Chart 3).

The problem with this approach was reliance on the highly subjective “genuine student” requirement to drive refusals rather than using more objective criteria.

(Data source: DHA reports on Administration of Migration Program)

The policy tightening has, nevertheless, led to the overall stock of student visa holders starting to stabilise at around the level immediately prior to COVID (around 650,000 plus the student bridging visa backlog).

But that doesn’t consider what is happening to students who have completed their courses and have not departed.

Given the large number of students who would have completed courses in 2024-25 (perhaps around a quarter to a third of the stock of 650,000), you would think that students directly securing permanent residence would have increased. Instead, there has been a steady decline in students directly securing permanent residence (Chart 4). In 2024-25, it was at the lowest level in well over a decade. How could that be?

Part of that would be due to the build-up of a large backlog of students applying for permanent residence. Another part would be a possible decline in students with substantial skilled work experience (either in Australia or overseas) taking courses that are in demand, and thus being able to use that to secure skilled jobs and, through that, direct permanent residence.

But the primary reason is that it is now taking much longer for students to secure permanent residence. We have to look at the temporary visas that students are securing onshore on a pathway to a permanent residence application. Other than visitor visas, temporary activity visas (which include the now-abolished COVID visa, particularly in 2022-23) and further onshore student visas, there are three main temporary visas student visa holders are securing (see Table 2).

Temporary graduates

The key to what happens to students is the temporary graduate visa. The stock of temporary graduate visa holders has boomed over the last decade (see Chart 5).

The Government must better target the design of this visa to Australia’s long-term skill needs rather than allowing just about any student who completes their course to qualify for this visa. It should be noted that an astonishing 63,987 students applied for temporary graduate visas in the first five months of 2025-26 compared to 31,541 in the first five months of 2024-25. That means the stock of temporary graduates – already over a record 239,000 – will grow further.

While not all will seek permanent residence, a significant portion will. If the size of the permanent migration program is not increased, this cohort will remain in immigration limbo for years, including applying for other temporary visas as well as adding to the already massive permanent visa backlog.

In 2024-25, 30,782 temporary graduate visa holders directly secured permanent residence. That is in addition to the 12,637 students who directly secured permanent residence.

Further, 15,479 temporary graduate visa holders secured employer-sponsored skilled temporary visas in 2024-25. That was a massive increase on the 3,000 to 4,000 temporary graduates who had previously been securing these in recent years. The impact of the rising onshore demand for the skilled temporary visa can be seen in Chart 6.

What should the Government do?

Unless it is prepared to significantly increase the size of the permanent migration program, something it may have to do anyway, given current application backlogs, the Government has to take steps to further tighten and better target the student visa system.

I would suggest the following:

Firstly, adopt the use of a government-arranged university entrance exam as the primary criterion for student visa eligibility. That would enable both better management of student numbers as well as better targeting of high-achieving students compared to the current highly subjective “genuine student” requirement. Student visas for the VET sector should be narrowly targeted to people who are already licensed in their home country in the traditional trades (such as carpentry and plumbing).

Secondly, confine eligibility for the temporary graduate visa to students who have completed specified high-quality courses in areas of long-term skill shortage.

Thirdly, confine onshore student visas to the same courses.

These three measures would achieve better skills targeting, enable better migration control, and make the visa system more efficient by reducing backlogs and enabling faster visa processing at less cost.

The above measures should be implemented as part of an overarching, long-term immigration plan, as the Government promised prior to the last Election

A clogged visa system only rewards the unscrupulous

A growing number of people in Australia remain stuck in immigration limbo.

Dr Abul Rizvi an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.