Turning point for student visas and net migration now confirmed

A record number of student visa holders has left the Government with some decisions to be made regarding policy changes, writes Dr Abul Rizvi.

THAT THE STOCK of student visa holders would set a new all-time record of over 700,000 was expected after the Australian Bureau of Statistics (ABS) had reported net student movements during February 2024 at over 147,000.

The overall number of temporary visa holders in Australia also set a new all-time record of 2.814 million. The real news was that offshore student visa applications showed a sharp decline compared to past February levels.

The stock of student visa holders at end February 2024 was 713,144. That was a continuation of a long-term trend that was only briefly interrupted by border closures during COVID (see Chart 1). That trend was the primary driver of record net migration in the 12 months to September 2023.

Despite major student visa policy tightening since 1 July 2023 and further tightening in March 2024, the trend of ongoing growth in student visa holders in Australia will continue unless there are even more dramatic changes in policy and/or an extraordinary weakening of the labour market.

Nevertheless, offshore student visa applications in February 2024 showed a significant weakening for the first time since international borders re-opened (see Chart 2).

For the first time since the start of 2022, offshore student applications in a month (February 2024, when there were 21,652) were significantly below those in the same month in 2023 (36,878), in February 2022 (27,183) and the pre-COVID February record of 22,809.

With further policy tightening in March 2024, we can expect offshore applications in March 2024 to also be below the March 2023 level of 31,404 and the March 2022 level of 27,198. It may even be below the pre-COVID record of 16,509.

Not surprisingly, 22,646 offshore student visa grants in February 2024 were well below the February 2023 level of 33,848 but still above the February 2022 level of 18,964 (see Chart 3). That was around the time the Coalition Government massively stimulated demand with fee-free student visa applications as well as unrestricted work rights.

The turning that took place in February 2024 with offshore student applications was not replicated onshore where applications remained strong. In February 2024, there were 21,646 onshore student applications. While high numbers of onshore student applications in February (and March) are not uncommon, the strength of onshore student applications in February 2024 despite significant policy tightening would have surprised the Government.

Since the big backlog clearance exercise in November/December 2022, onshore student applications of 21,7325 have exceeded grants of 160,088. As the onshore refusal rate has remained relatively low, this suggests we are again seeing the build of a large backlog of onshore student applications. That may also be reflected in the steady regrowth in bridging visa backlog.

The Government will be hoping that its policy tightening – including greater use of the “no further stay” condition on visitor visas – will temper strength in onshore student applications. But that may not be sufficient.

We are also again seeing growth in the number of temporary graduates in Australia. Whilst the labour market remains strong, temporary graduates who have completed courses in areas of high skill demand will most likely secure skilled jobs and a pathway to permanent residence, especially if they are prepared to move to regional Australia and the smaller state capital cities.

The risk is that a weaker labour market may leave a large number of temporary graduates in immigration limbo. That may also be the same for remaining 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.