Prospects for Australia's overseas student program

A government report on student visa numbers reveals how the COVID-19 pandemic affected our recent net overseas migration, writes Abul Rizvi.

FOR THE PAST 20 years, overseas students have been central to Australia’s immigration arrangements, often representing well over 40% of net overseas migration or over 25% of population growth.

Recently, the Department of Home Affairs (DHA) released its 2019-20 student visa program report — so what are its highlights?

It’s important to look at the data for 2019-20 in two parts — the pre-COVID-19 period from July 2019 to February 2020 and the post-COVID-19 period from March to June 2020.

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Student visa applications

In September 2019, the DHA significantly tightened visa rules for students from countries such as India and Nepal — the second and third largest source countries for Australia’s overseas students. Student visa applications from China, Australia’s largest source country, were already in decline for reasons other than policy.

As a result, offshore student visa applications lodged in the eight months to February 2020 were some 18,500 less than for the same period the previous year. In the four months from March to June 2020, offshore student visa applications were some 77,000 less than the same period the previous year.

Overall, offshore student visa applications in 2019-20 fell to 192,723 compared to 289,691 in 2018-19 — down over 33%. The major source country declines were China, down 20%; India, down 46.7%; Nepal, down 60.7%; and Brazil, down 34.2%.

By contrast, student visa applications lodged by people already in Australia increased from the previous record of 183,724 in 2018-19 to a new record of 202,423 — an increase of over 10%. The major source country changes were China, down 6.8%; India, up 39.3%; Nepal, up 36.4%; Brazil, no change; and Colombia, up 26.8%.

Grant rates and processing times

Perhaps the most extraordinary development is that grant rates (the percentage of applications that are approved) for student visa applicants already in Australia increased from 93.5% in the three months from January to March 2020 to an extraordinary 100% in the period April to June 2020. That may reflect a reluctance of the DHA to refuse student visa applicants as that would oblige them to monitor the removal of refused students from Australia — something that would be very difficult during the pandemic.

But that does not apply to student visa applicants who are outside Australia. For these applicants, the grant rate increased from 89% in the three months from January 2020 to March 2020 to 96.2% in the three months from April to June 2020. The grant rate for Indian student visa applicants increased from 81.3% to 97% while for Nepal, it increased from 81.5% to 100%.

Indeed, the offshore student visa grant rate for Hong Kong, Indonesia, Pakistan, Saudi Arabia, Malaysia, Nigeria, Brazil, Kenya, Singapore, UK and the USA were all 100%.

That is an unprecedented phenomenon. It means that either the quality and completeness of applications increased dramatically or decision-makers were given instructions to approve as many applications as possible or were under pressure to process very quickly.

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Could it be that this was the Government’s way of assuaging the white-hot anger of Australia’s universities after denying them access to JobKeeper, thus forcing them to retrench thousands of staff?

Oddly enough, while grant rates increased dramatically, processing times for applicants of student visas both in Australia and overseas blew out to unprecedented levels. For example, the median processing time for offshore student visa applicants in the higher education sector has in recent years been around ten to 15 days. In the three months from April to June 2020, the median processing time blew out to 107 days.

Median processing times for offshore student visa applicants from India increased from 21 days to 121 days with many applicants waiting over 500 days. Similarly, median processing times for offshore applicants from Nepal increased from 21 days to almost 300 days.

Thus, another explanation for this extraordinary phenomenon is that the DHA gave instructions to visa processing staff to suspend processing student applications for a period and then late in June, possibly after pressure from universities, told them to process the applications very quickly — hence the high approval rate.

If that is the explanation, then that is just administrative incompetence. Moreover, after the delays, the offshore students whose applications were approved are now stuck offshore with little chance of entering Australia any time soon.

Student visa holders in Australia

While offshore student visa applications and grants fell sharply, the increase in onshore applicants has meant that the total number of student visa holders in Australia marginally increased from 553,139 at end June 2019 to 555,310 at end June 2020.

The significant development is that for the first time in many decades, China is no longer the leading source country for overseas student visa holders in Australia. At end June 2020, there were 108,203 Indian student visa holders — up 14.3% from end June 2019. There were 108,155 from China at end June 2020 — down 12.2% from end June 2019.

There is a gradually growing number of overseas students who have been granted a visa offshore. However, student visa arrivals in the period from April to July 2020 were only 170 while 34,950 students departed, 12,130 of those in July.

Because of the cap on overseas arrivals, overseas student visa arrivals are likely to remain limited for the rest of 2020. Overseas student visa holders in Australia will grow through more onshore student applicants, but this will be more than offset by the number of departures.

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Overseas student arrivals will not increase until there is a substantial increase in the cap on overseas arrivals.

In 2019-20, the number of overseas students moving onto another type of visa onshore fell to 151,526 from 167,385 in 2018-19.

The major onshore destinations of student visa holders were:

57,923 to a temporary graduate visa (see below);
31,853 to a visitor visa;
10,846 to permanent or provisional skill stream visa;
7,383 to a permanent or provisional family stream visa;
3,054 to a skilled temporary visa — a 50% fall on the previous year; and
2,518 to a working holiday visa.

The total number of temporary graduate visa holders in Australia at end June 2020 was 100,239, up from 91,776 at end June 2019.

Temporary graduate visa holders in 2019-20 moved to the following types of visas in 2019-20:

16,459 to permanent or provisional skilled — up 18.1% on the previous year;
14,661 returned to a student visa — up 36.3% on the previous year;
1,988 to a visitor visa;
1,712 to a skilled temporary visa; and
1,552 to a provisional or permanent family visa.

The size and composition of the 2020-21 Migration Program will determine whether the stock of temporary graduates continues to grow or declines. As there are over 550,000 student visa holders in Australia potentially feeding into the temporary graduate visa, it is likely the number of temporary graduate visa holders in Australia will continue to grow for a number of years to come.

Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration, currently undertaking a PhD on Australia’s immigration policies. You can follow Abul on Twitter @RizviAbul.