Management of student visas has Government in a pickle

While the Albanese Government has done its best to amend the visa system chaos left by the Coalition, student visa numbers have resulted in more work to be done. Dr Abul Rizvi reports.

THE DEPARTMENT of Home Affairs (DHA) this week released its '22-'23 report on student visas confirming an all-time record in offshore student visa applications that has led to a rapid increase in the number of students in Australia to record levels. That was the major driver of record net migration that is now approaching 500,000.

How the permanent migration expectations of most of these students (and former students) are managed, despite them having met the so-called “genuine temporary entry” test, will be central to overall immigration management.

DHA confirmed that in '22-'23, there were a record 423,675 offshore student visa applications lodged. This compares to the previous record of 289,691 in '18-'19. The record-setting offshore student application rate started in February 2022 and continued in every month until September 2023 (see Chart 1).

The grant rate for offshore student applications in '22-'23 fell to 80%. According to DHA, this was predominantly due to concerns about fraud in the caseload, particularly in the Vocational Training and Education (V.E.T.) sector. Nevertheless, there were 369,979 offshore student visas granted in '22-'23, well above the previous record of 243,740 in '18-'19.

There were 166,629 onshore student applications lodged in '22-'23. This is well down on the record of 202,423 onshore applications lodged in '19-'20. The lower level largely reflects a smaller stock of students already in Australia at the start of '22-'23. Due to backlog clearance, however, there were 207,316 onshore student visas granted in 22-23 compared to the previous record of 175,286 in '19-'20.

The onshore grant rate in '22-'23 was 97%. This is despite a much larger portion of onshore student applications being for the V.E.T. sector compared to offshore student visa applications where a much larger portion is for higher education and English language training.

Fundamentally, once a student has been granted a visa offshore, a further onshore student visa is almost guaranteed. That highlights the importance of getting the initial offshore student visa decision right. In that regard, how the Government designs the proposed new “genuine student” requirement, to replace the “genuine temporary entry” requirement, will be critical.

Table 1 provides student visa grants by major source nation.

While India, China and Nepal remained the top three nations, the biggest percentage increases in '22-'23 over '21-'22 were:

Bhutan — 502.1%;
Colombia — 421.8%;
Pakistan — 268.1%;
Philippines — 253.6%; and
Brazil — 176.5%.

While offshore student visa applications on hand generally declined as the Albanese Government has sought to improve processing times, one surprising development is a major increase in offshore student applications on hand for Kenyan nationals. These have increased from 456 at end September 2022 to 1,771 at end June 2023. This seems to suggest either a lack of resources at the relevant overseas post or some issues with the caseload.

The total number of student visa holders in Australia at end June 2023 was 568,753. This has subsequently increased to over 660,000 by end August 2023, an all-time record and still rising.

Labor tightens further batch of student visa policy

The Albanese Government has announced a further batch of changes to student visa policies to target rorts and abuse.

Student destinations

The visas that students secure after arrival are crucial to migration management and critical to both the composition of the permanent migration program as well as the level of net migration. The Government will be heavily focused on this over the next few years.

Table 2 outlines the onshore visas students secured after arrival.

Table 2 highlights the decline in students securing further visas onshore during the pandemic and the large increase in students securing new visas onshore once international borders re-opened and in particular:

extraordinary increases in students acquiring temporary graduate visas, even in a year when a very large number of temporary graduates secured permanent migration — this was before provisions for temporary graduate visas were made more generous;
an increase in students securing temporary activity visas reflects the COVID visa provisions which were closed to new applicants from September 2023 and to any new applications from February 2024; and
a large increase in students accessing partner visas in '20-'21 and '21-'22 when the Government was at last clearing the backlog of these visas that it had illegally built up.

An interesting development is the increase in students securing protection visas. There is no publicly available data on the number of students applying for protection and being refused a protection visa or waiting for a protection visa decision.

With the number of student visa holders now in excess of 660,000 and rising, the key issue will be their visa destinations in '23-'24 and beyond as there will not be sufficient places in the current permanent migration program for the number of students, temporary graduates and temporary activity (COVID) visa holders.

Albanese Government taking steps to avoid student visa crash

The Federal Government is currently facing challenges that could see a crash in student visa numbers, resulting in a costly aftermath.

Temporary graduates

While there was only a small increase in the number of temporary graduate visas lodged in '22-'23 to 105,146 (from 100,275 in 21-22), the number of temporary graduate visas granted increased from 63,786 in '21-'22 to 179,017 in '22-'23. The bulk of the increase in grants would have been due to backlog clearance (most of these former students would have been in the massive bridging visa backlog that the Coalition had allowed to develop).

The leading nationalities for grant of temporary graduate visas in '22-'23 were:

India — 63,189;
Nepal — 26,440;
China — 18,457;
Pakistan — 7,501;
Sri Lanka — 6,807;
Philippines — 6,048;
Vietnam — 4,509;
Bhutan — 4,078; and
Brazil — 3,812.

As end September 2023, there were around 200,000 temporary graduates in Australia (see Chart 2).

Only a small portion of these will secure permanent residence either because they cannot get a skilled job or because of a lack of places in the migration program.

With the more generous temporary graduate visa arrangements in place after 1 July 2023 and the much larger stock of overseas students now in Australia, we can expect the temporary graduate application rate to rise in '23-'24. The Government is under pressure to tighten temporary graduate policy although that will be strongly resisted by the International Education industry.

For the growing number of temporary graduates in Australia, the key will be the onshore visa pathways they have available to them. The use of these pathways in recent years, as outlined in Table 3, highlights a major increase in temporary graduates securing further onshore visas.

The highlights of Table 3 are:

a major increase in temporary graduates securing permanent residence, despite which the number of temporary graduate visa holders has increased to record levels;
a decline in temporary graduates returning to a student visa after 2020-'21 as policy on this has been significantly tightened; and
a dramatic increase in the use of the temporary activity (special COVID visa stream) and the Training Visa in 2022-'23.

The key policy challenge now is that a large portion of the record number of student and temporary graduate visa holders will not secure permanent residence but will be left in immigration limbo. While the Government has started to tighten student visa policy, it will need to go a lot further if it wants to get net migration to a lower level by the time of the next election. But any attempts to do that will be met with stiff opposition from the International Education industry.

Even with policy tightening, it will not be possible for the Government to meet the permanent residence expectations of a large portion of students, temporary graduates and COVID visa holders.

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