It’s time to shut down the foreign student rort

By Leith van Onselen

Last week, the Australian Population Research Institute (APRI) released a startling new report arguing that Australian universities’ heavy reliance on overseas students is crushing education standards, is oversupplying accounting, IT and engineering occupations, adding to population pressures in Sydney and Melbourne, and is shaping Australia’s foreign policy.

The reality is that the industry is too big, with too many downsides. At present, the tail is wagging the dog. Such is the importance attached to the industry’s progress that the Australian government is privileging its aspiration for continued expansion. The downsides of this growth have largely been ignored…

Because overseas students concentrate in business and commerce courses, and to a lesser extent in IT and engineering, they often constitute a majority presence in these courses. The result has been that the curriculum, teaching and assessment practices reflect the needs and capacities of these students. As we have argued, the educational standards fall far short of university claims that it is of the highest quality…

Such is the scale of the overseas student industry that it is generating wider social downsides. This was flagged by the Productivity Commission (PC) in its 2016 report on the migrant intake. The PC suggested that the number of student and other temporary visas might have to be limited because of their ‘indirect costs and benefits (externalities)’. The Commission noted that ‘educational institutions have little incentive to consider these effects’.[i]

Since this PC report much more evidence of these ‘externalities’ has emerged.

We have described the impact on immigration policy of pressure from universities to keep accounting, IT and engineering occupations on the list of occupations eligible for points-tested permanent residence skill visas. This is despite the oversupply of entry-level domestic graduates in these fields.

We also documented the remarkable contribution of higher education student visa holders to the level of NOM in NSW and Victoria (which in practice means Sydney and Melbourne – since that is where the great majority of overseas students locate). By 2016-17 this contribution reached 25 to 30 per cent of the additional population attributable to NOM in these two states.

Finally, the health of the overseas student industry is of such importance to the Australian government that it has shaped its foreign policy. The Coalition government’s statement in 2018 that it would not seek to contain China in its geopolitical conflict with the US in the Indo-Pacific appears to have been a direct result of university lobbying.

The overseas student industry should be removed from its pedestal, and its priorities balanced against these downsides.

Over the weekend, The ABC also released a detailed report on how Australian university standards have been ‘dumbed down’ by foreign students, many of whom have very poor English and leave university practically unemployable:

…an ABC investigation has uncovered an abundance of international students who describe struggling to communicate effectively in English, participate in class, or complete assignments adequately.

Academics as well as employment and education experts told the ABC that English language standards are often too low or can be sidestepped via loopholes, and that students are often put in stressful classroom situations that can lead to cheating.

Many of the students also often find themselves completing degrees which cost in excess of $100,000 that rarely lead to professional employment after graduation.

Despite this, international students continue to arrive in record numbers, with the most recent figures showing that there are now some 753,000 international students in Australia and 380,000 of them in tertiary studies.

It was while managing a master’s program at RMIT University that media academic Jenny Weight said she became alarmed by the number of international students struggling with basic communication and in some cases had studied “absolutely no English”.

“I have read a lot of assignments written by international students which appear to have been written in Chinese and then translated using Google,” she told the ABC…

“One of the struggles was to try and get our English entry level standards lifted higher, but the pressures on universities to make money from international students is such that they don’t want to, because that will knock out a lot of potential students.”

International education expert Michael Fay said that English is one of the first quality controls for students that is vulnerable to lax standards.

“A lot of the time the people who are in charge of the policy don’t actually understand the English language issues well enough and assume that students are going to somehow, through osmosis, improve their English as they go along through the program,” he said…

Xiaolan Tang is a former international student who now works in China recruiting local students for overseas study — she told the ABC that it’s becoming harder and harder to sell people on Australian degrees.

“People question the quality of Australian universities when students who get refused by top universities in other countries can still easily be accepted by the same level Australian universities,” she told the ABC.

“They think that the entry threshold for Australian universities is set quite low.”

Twenty nine-year-old Zhao Chen studied architecture at the University of Melbourne in 2014 and told the ABC that she found Australian universities’ admission standards weak.

Back in August, The lobby group representing foreign students in Australia – the Council for International Students in Australia (CISA) – admitted that many foreign students study in Australia to gain permanent residency:

The Council for International Students in Australia said foreign potential students were attracted to Australia by the possibility of migrating here.

But Mr Dutton’s strong views on border policy and his statement that Australia should reduce its intake of migrants “where we believe it is in our national interest” would tip the balance for some would-be students…

The national president of CISA, Bijay Sapkota, said… “For people coming from low socio-economic backgrounds there has to be a value proposition. If they go home they will not get value. So there has to be a possibility of immigration.”

He said international students were not satisfied with the way Mr Dutton had run the immigration portfolio, where some visas were at risk of being closed down at any time…

The reality is that Australia’s education system has become an integral part of the immigration industry – effectively a way for foreigners to buy backdoor permanent residency to Australia.

Dr Jenny Stewart, Honorary Professor of Public Policy at the University of New South Wales, drew the direct link between permanent residency and foreign student demand in her excellent article Hooked on Students:

If you work in a university, you cannot help but be aware of the extent to which universities are dependent upon income from international undergraduate students. Many of us working in the sector realised that it was not for any intellectual brilliance on our part that the students came, but because for many, coming to Australia as a student was a significant step on the path to becoming an Australian resident…

What do these undergraduate students do once they have completed their qualification? Many, understandably, wish to remain in Australia…

With appropriate advice and support and the necessary persistence, it would seem to be possible for just about any international student who is a graduate of an Australian university to become, eventually, a permanent resident…

International students are also partly behind the ballooning in bridging visas, which have blown-out by 40,000 over the past year, as well as by 90,000 since 2014:

Earlier this month, it was revealed that foreign students have been ‘gaming’ Australian immigration system by appealing their decisions en masse to the Administrative Appeals Tribunal (AAT) to extend their stay:

The number of outstanding student visa refusal cases before the tribunal at the end of May totalled 8603. This compared with 4394 active cases at the end of June 2017 — an increase of more than 95 per cent in a little under a year. The 8603 active student visa refusal cases represented 30 per cent of all active migration cases…

Victorian Liberal MP Jason Wood, the chair of the joint standing committee on migration, said the backlog of cases at the AAT was “outrageous” and argued that the appeals process was “working in favour of the visa holder and not necessarily the Australian taxpayer”. He said foreign students could game the system to extend their stay by several years — an outcome which he said would deny Australian citizens more part time jobs.

Basically, Australia’s university sector has become a giant rent-seeking business, just like the superannuation industry.

Rather than clipping the ticket on the deluge of funds coming in via compulsory superannuation, the universities sector instead clips the ticket on the deluge of foreign students arriving in the hope of transitioning to permanent residency, as well as gaining direct government funding via the demand driven system pertaining to domestic students.

Instead of focusing on providing a high quality education and upskilling Australia’s population, the universities sector has become focussed on pushing through as many students as possible – both domestic and foreign – in order to maximise fees and profit. Again, this has parallels to the superannuation industry, whose focus is on maximising funds under management and fees, rather than achieving strong returns for members.

The end result is the erosion of standards and too many university graduates chasing too few professional jobs.

About the only winners from Australia’s rent-seeking university system are vice-chancellors, whose pay has already exploded to an average of $1 million on the back of the student explosion (both domestic and foreign), at the same time as university students are stuck paying off expensive and increasingly worthless degrees, taxpayers are stuck writing-off unpayable debts, and the broader population is suffering under the never-ending population crush.

It’s time to put a leash on the university sector, starting with removing the link between foreign students studying at university and gaining work visas and permanent residency, as well as lifting entry standards. Let our universities compete on quality and value alone.

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  1. Today on the Property Armageddon Front Line:

    I am standing at a house in Fennel Bay, Lake Maquarie, NSW. Listed for 600k, it sat on the market for two months, and they are now asking 500k. Apart from the real estate agent, my wife and I are THE ONLY ONES THERE. The house is in great shape, with a downstairs tenant renting happily for $300/week. My wife tells the agent she thinks it is too high. They go back and forth. She tells him it might be worth 475k. He asks her if that is an offer. She says no. Later that day, the vendor has him call us, to try to work out at what price we would give an offer. My wife says maybe she would make an offer at 450k, given her fears about immediately having her equity wiped out on purchase. The agent says its too low, but is it an offical offer? She says no.

    I am collecting more and more stories just like this every weekend as we house hunt. I understand corelogic lags by three months, and quite honestly the feel I get on weekends at the moment is that the market has already started to gap down.

    The schadenfreude is so intense sometimes I think I just can’t take it anymore, but then I remember all my experiences with Bresic Whitney before we white flighted from Sydney, and I remember that I am going to turn these screws till the godamn thread breaks.

    • Im renting at Marmong point about 2 minutes from that property Not a bad spot with St Paul’s down the road and 3 train stations within 5 minutes. But the areas still got a massive way to go before all the Riff Raff get cleaned out. Will be some good deals in booragul I think once the market settles down

    • I like your wife, she’s not afraid to call it like it is and I like watching real estate agents sweat.

      This is a good thread.

  2. My two sons are doing B Comms at Mcquarrie, both say foreign students can hardly speak English, and can’t contribute to group assignments, so the whole groups average gets pulled lower. It’s not fair on Aussie students

      • Usually by the lecturer. When my son and three other Aussies wanted to form a group the lecturer tried to break it up and include foreigners who can’t even speak English. My son refused and the lecturer eventually gave in

      • Lol, brilliant!

        Expect for the local group to get marked down, though.

        I remember I got marked down heavily for a subject that I was very proficient in, in similar circumstances (another breed of (less competent) students were preferences).

    • I can not believe that group assignments are still a thing! They really need to end. Just sell Aussie passports for $250k each and get immigrants that way instead of requiring immigrants, who can not speak English, to do a “degree”.

    • Students need to make formal complaints to the University board or suitable governing body about this.

      It is devaluing a very expensive education and reducing their degrees to the level of junk status in the eyes of employers – which is the whole reason for getting a degree in the first place, to get a well paid job.

  3. It isn’t just university students – although they and vocational education are at the epicentre of the trashing of Australian education.  It is everywhere in education, and the cause everywhere is the same – the whole sector has been financialised.

    Australia has utterly trashed every form of education – from pre school to university.

    Someone needs to take the whole lot right back to the planning board and write with the first line.

    1.  The key objective of the Australian (Pre school, Primary, Secondary, Vocational & Tertiary) Education sector is to educate Australians to world best standard as efficiently and inexpensively as possible.

    And immediately underneath write.

    2.  The key objective of the Australian (Pre school, Primary, Secondary, Vocational & Tertiary) Education sector is not to make money for the servicing of Vice Chancellor salaries, selling a loss leading educational ‘product’ to aspirational migrants and housing speculators from overseas.

    …and from there on in work out how we get point 1 happening.

    • I agree fully with our need to revise / redefine education in Australia
      BUT that said I suspect the real problem is that we’ve created a society where experience suggests at best a loose connection between superior school/uni grades and attaining wealth over ones working life.
      Truth is there’s very little correlation between the two.
      Even blind Freddy can see that Residential RE developers and sellers and hoarders make more money that highly trained Engineers.
      The pathway to wealth is what’s fundamentally wrong with our system, it’s our devaluation of Education, our devaluation of learned skills that feeds back into our schools sending the strongest possible message to our schools kids.
      The message is clear and unequivocal, Getting a strong foothold on the Property ladder is infinitely more important than gaining a strong foothold on the Career ladder. The rest is just cause and effect playing out as the Market adjusts to this reality.
      Sorry but it’s hard for me to imagine a different outcome for Aussie Education until the value of education is somehow restored and that’s as much a social as a monetary problem.

      • You betcha. The first question we should be asking in reconstructing the education system is ‘What skills do we want? What conceptual and intellectual skills will benefit Australian society and the recipients of the education we will provide?’

        If real estate speculation appears anywhere on that list they may as well close down the education system.

      • ErmingtonPlumbingMEMBER

        I very much agree with your above lament/sentiments fisho
        But I think your ,
        “The rest is just cause and effect playing out as the Market adjusts to this reality.”
        Is arse about,…IMHO it is the idelogical/political demand that all aspects of society should submit to “the market” that has so corrupted our societal,

        Like Gunna says above,
        “It is everywhere in education, and the cause everywhere is the same – the whole sector has been financialised.”
        Deference to the efficiency of the Market is all good and well across large swaths of the economy and has my support to a degree.
        But not in the areas of natural monopolies, Health care and Education, nor in the provision of the public services in a robust wealfare state.
        All the “successful” Nation States to come out of Industrialization have run a balance between “The free Market” and Government intervention and Control.
        I think that balance should be decided by the society Democraticly, not by a market that has financialised every aspect of Civilization AND the natural environment.

      • @EP
        I don’t think you really understand what I mean when I say that the market is reacting to…..
        There are markets for everything from Fish to Flights that are continuously in play and in the process determining price and volume outcomes , human labour is no different it’s one of the inputs that responds to the broader directions from the market place. Labour responds with increased volume of people and ancillary support .
        Imagine median Sydney houses were Priced at $250K instead of $1M with the same transaction volume that we have today the Real estate agent business would have to function on 1/4 today’s gross revenue. Wages would adjust downward and the whole RE business sector would be much more aware of costs, but the business wouldn’t completely disappear, rather it would adjust and “right-size”. That’s the invisible hand of Mr Market at work, of course instead of $250K median house prices we have $1M median houses and an RE industry awash with cash and employing way too many people with these individuals “expecting” to earn upward of $300K pa.
        There are a lot of unrealistic expectations fueled by this insane price inflation in Sydney RE. As a corollary there are many far more realistic long term paths towards a better Australia with a stronger more educated more resilient workforce that were abandoned because Mr Markets hand directed these individuals towards today’s pile of RE gold.
        The Education sector does not exist (and more to the point cannot exist) outside of the broader market for human services. If a 12 year old sees their Dad (say an Accountant) working his tail off for low pay while a neighbor (RE agent) lives the high life with all the trappings (big Boat, Bali holidays, skiing…whatever) Is this 12 year old really motivated to get the grades they need to follow in their father footsteps or or or.
        These are all forces / factors involved in balancing the market, the outcomes aren’t right or wrong they’re just necessary and predicated by our social / cultural biases.
        Education is no different furthermore the so called financialization of Education would be (and will prove) meaningless if these education outcomes do not make Australia a better place to live.

      • ErmingtonPlumbingMEMBER

        “Financialization of Education would be (and will prove) meaningless if these education outcomes do not make Australia a better place to live.”

        IF the “financialization” of education was to “make Australia a better place to live”,….then that outcome would be entirly by accident.
        The pourpose of the financialization of anything is not to make it “better” but rather to just makeore money out of it.
        Educational instutions themselves are now judged on financial turnover, profit and valuation,….NOT the quality of their educational output.
        Its an area of the Economy that certainly should NOT be directed by the Market,…it should be directed by Government with a democratic responsibility to make Australia “better”.

        Whats interesting is your usually anti big Government intervention and yet you desire some “invisible hand” like Government to correct a cutural preference and respect for Wealth over Education and skills wich in my view is a product of the obsession with making a market of everything.

        When Adam Smith spoke of the “invisible hand” he was not talking about deferring everything to the Market,…actuslly quite the opposite.

  4. all pathways to residency through student visas must be severed, and those on study visas should not be permitted to work under any circumstances. the visa appeal process must be entirely scrapped.

    “He said foreign students could game the system to extend their stay by several years — an outcome which he said would deny Australian citizens more part time jobs.”


    “part time jobs”

    yeah as if these students are working “part time” as per the conditions of their visas

    deport em all kick out their butts

    • Hey staggie, who mans the servos and fast food joints in Dubbo? I’m just back from a bit of a road trip through southern inland Qld – servos manned by Indian nationals (including in a town of less than 1,000 and off the main highway), grocery stores and fast food joints also with a smattering of Indian nationals. I have no idea what visa they would all be on, I can only guess that they’re on either dodgey student visas, bridging visas or they are illegals. I asked a local cocky about it and he just shrugged and said if it were not for the illegals the servos would likely close down.

      • indians. im guessing its the same sort of small business visa chain migration racket that happens in the u.s, it’s why every motel there is run by an indian with the last name “patel”

        they own pizza hut here too

  5. I know quite a few people working at unis and they all confirm the system is a rort.

    – A lecturer who felt certain foreign students should not pass because they did not meet the standard – heavily pressurised by management to allow the students to pass. This friend has since gone back to Europe to find a decent academic standard, feeling that his academic integrity and thirst for challenge was being eroded here.

    – A lecturer commenting on how frequent foreign students plagiarise work, including ‘borrowing’ from a paper given to them by the lecturer as an example only!

    – Various uni staff commenting on how previously ‘the rort’ was not openly discussed internally but now is openly mentioned. The rort being that studying at university is just a pathway into the country. People are after the visa, rather than the education and often do not show up at all, wasting a valuable space another student could have used. Apparently graduation is not a visa condition. An actual quote: “We do not sell education, we sell visas.”

    I will make sure my kids will not have an Australian education.

    • It must be pretty demoralizing for anyone with a passion in the sector to watch it be slowly sold out. Surprising there hasnt been any pushback to be honest.

  6. The rot started with the Dawkins reforms that started in 1987, where we went from 19 universities and 46 colleges of advanced education (CAEs) of various sorts to 36 universities, a ridiculous number for a population the size of Australia’s. The CAEs were much cheaper to run than universities because they concentrated on undergraduates and various diplomas. They didn’t offer advanced degrees and didn’t do research. Their staff thus carried much higher teaching loads than at a university.

    Of course there wasn’t enough money to fund the new system, and hence the attraction of foreign students as a cash cow. We need to reverse the Dawkins reforms, cut foreign student numbers to a sensible percentage, say 10%, and not link study to immigration.

  7. If you’re in Sydney stuck behind a truck in the right hand lane there is a 99% chance it’s driver is an Indian hair dressing student who can barely speak English

    • One thing I can never work out is why so many Sikhs are (or aspire to be) hairdressers. What, with the never-cutting-your-hair being a big thing in the community, and all that. …How do they make their money?!!

      This is a huge mystery.

      • BobnVageneMEMBER

        They are just looking for the cheapest way to get a Permanent Residency and drive truck/cab/bus for living.
        The fix to having terrible international drivers on road is to have stringent procedures for getting a drivers licence, specially for immigrants.

      • All the Sihkh’s got in during the widespread rorting of the subclass 880 visa onshore skilled migration visa.

        Not one of the public service’s greatest moments. All an applicant needed was a certificate from a training provider (bodgy college), 900 hours work experience which could be unpaid (hence no records for Investigators to peruse) and English and presto PR.There were so many applicants, DEETYA was forced to assess skills on the papers leading to large scale fraud where small business owners sold references and agreed to support those references through middlemen for very little money.

        This guy was caught. Many others escaped because Immigration and DEETYA management stuck their heads in the sand.

      • The fix to having terrible international drivers on road is to have stringent procedures for getting a drivers licence, specially for immigrants.

        Stringent requirements for a drivers license would certainly solve a lot of our congestion problems.

        Might cause some problems for the Government that tries to implement it thought.

  8. How else are we supposed to compete for additional student numbers in a shrinking marketplace? Quality – in Straya?

  9. robert2013MEMBER

    I have been telling students for more than a decade not to bother with university unless they have an extreme talent or motivation.

  10. “It’s time to put a leash on the university sector, starting with removing the link between foreign students studying at university and gaining work visas and permanent residency, as well as lifting entry standards. Let our universities compete on quality and value alone.”