Visa fee cuts no fix for crumbling ELICOS sector

Industry calls to cut student visa fees won’t be enough to revive Australia’s troubled English language sector, experts warn. Dr Abul Rizvi reports.

THE ENGLISH LANGUAGE Intensive Courses for Overseas Students (ELICOS) sector is lobbying the Government to reduce visa application fees for students who apply to do short English language courses.

While the massive increase in student visa application fees has been poor policy if we are to attract the best students, it is not clear that reducing fees for ELICOS students would necessarily be good policy. It may send exactly the wrong message about the quality of overseas students Australia is trying to attract.

According to Phil Honeywood (CEO of the International Education Association of Australia (IEAA), the visa fee increase to $2,000 is “killing” Australia’s ELICOS sector. There have been a number of high-profile college closures in recent months, including IH Sydney, Perth International College of English (PICE), the Language Academy and recently, the Lonsdale Institute. But closures were inevitable once the government tightened policy. That started well before the visa fee increases.

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The ELICOS sector has a long history of booms and busts, starting with the first boom in the late 1980s, followed by a decade of very tight visa policy for all overseas students and the closure of many ELICOS colleges that had established quickly to take advantage of the boom (they were essentially selling visas, not education).

Most of the ELICOS students in the 1980s boom overstayed, applied for asylum and were eventually granted permanent residence through a specially designed non-asylum visa in the 1990s. During the process of granting them permanent residence, it became obvious that few had learned any English. The Department of Immigration has been wary of the ELICOS sector ever since.

The most recent boom from 2022 followed the Coalition Government stomping on the student visa accelerator through policies such as unlimited work rights and fee free visa applications.

The new Labor Government was slow to tighten policy and let the boom continue for far too long. The tightening was very much targeted at the ELICOS sector (as well as the VET sector) and started well before student visa application fees were increased from 1 July 2024 and then again from 1 July 2025. Even if visa application fees were reduced, there is no chance the Government would allow the ELICOS sector to go back to the boom days of 2022-24.

The reduction in ELICOS student visa grants was mainly driven by a very large increase in the refusal rate, particularly from countries with the biggest growth (such as Colombia). The offshore ELICOS student visa refusal rate increased from less than 10% in 2022-23 to almost 20% in 2023-24 and almost 25% in 2024-25. The refusal rate for offshore ELICOS students from Colombia increased from 4% in 2022-23 to over 30% in 2023-24 and almost 40% in 2024-25.

The key issues the Government would need to address with the requested fee reduction include:

Given the fee increase was an Election promise and the revenue was used to fund other budget measures, an offsetting increase in revenue would be needed. The lobby groups are talking about a fee for changing providers (some universities would like that to limit loss of students who get poached or leave because they are unhappy with their original provider) and/or an increase in the fee for dependents. The latter would have an impact on demand for study in Australia, particularly from older students doing higher degrees. Research universities may not support a higher fee for dependents.
Limiting the impact of an increase in ELICOS students on net migration. The ELICOS sector has been arguing that its students don’t impact net migration because they only do short courses and then depart before they can be counted in net migration. This is not true. In 2022-23, 14,781 ELICOS students went on to do a VET course. This fell marginally to 11,523 ELICOS students to a VET course. A smaller number went on to do a higher education course. The Government could limit this phenomenon by imposing a mandatory “no further stay” condition on all students undertaking an ELICOS course. But a “no further stay” condition would further dampen demand for ELICOS courses, perhaps even more than the high student visa application fee.
There would also be concern about ELICOS students who enter with a “no further stay” condition would turn to an asylum application as their only way to extend stay. This happened to some degree with the massive boom in ELICOS students from Colombia (see Chart 2).

Following the boom in ELICOS students from Colombia, there was also a large increase in Colombian nationals applying for asylum. That increased from a historically high 156 in 2022-23 to an extraordinary 756 in 2023-24.

From a policy perspective, it makes sense for the Government to reduce the visa application fee to facilitate ELICOS students from very low immigration risk countries, including with a mandatory “no further stay” condition.

But it is highly unlikely this will be the panacea the industry thinks it to be in terms of a return to the kind of boom that took place in 2022-24. That boom was driven primarily by ELICOS students from high immigration risk countries.

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.