International student boom built on fraud and grift


Former vocational training sector regulator Claire Field warned last year that large numbers of South Asian students were arriving in Australia in “response to the unlimited work rights now available to those on Australian student visas”, enrolling in “lower quality and cheaper vocational colleges” in order to enter Australia to live and work.

The deluge of arrivals followed the decision by the former Morrison Government to uncap the number of hours that international students could work while studying, as well as granting a two year Temporary Graduate visa to Vocational Education and Training (VET) sector graduates.

The Albanese Government then opened the floodgates wider by announcing at the Jobs & Skills Summit that it would uncap work hours for another year and extend post-study work rights by two years for recent graduates with certain degrees:

Student visa reforms

Labor also increased the permanent (non-humanitarian) migrant intake to a record high 195,000 a year, thereby increasing the likelihood of students transitioning to permanent residency.

Shortly after the Albanese Government’s reforms, Labor backbencher Julian Hill warned that Australia’s international education system has become a “ponzi scheme” for enticing non-genuine students to Australia with unfettered work rights and permanent residency, which was being ruthlessly exploited by unscrupulous education agents.

“Uncapped work rights is being misused by agents in many parts of the world who are flogging our precious student visa as some kind of cheap, low rent work visa. No one should permit that to continue”, Hill said.


“We know that the incentive of a permanent visa to Australia is like a golden ticket from Willy Wonka’s chocolate bar”.

“It’s too powerful an incentive that would drive and pervert behaviour by providers, and some students”, Hill warned.

To nobody’s surprise, international students are now flooding Australia, with net visa arrivals soaring to record levels, primarily from South Asia:

Net student visa arrivals

Over the weekend, The AFR released two reports explaining how Indian students and agents were “gaming” Australia’s visa system and making a “mockery” of the international education system.

According to AFR education editor Julie Hare, “thousands of newly arrived Indian students are using loopholes in the visa system to abandon their courses at established universities to enrol at cheaper private colleges, stoking fears of widespread rorting of the temporary migration scheme”.


“Universities are reporting sharp increases in the number of Indian students who either arrive in Australia but never step foot in their institution or abandon their course shortly after. One university says around 500 of its expected 1200 new enrolments from India for semester two last year either didn’t front up or jumped ship in the first six months”, said Hare.

“Experts say the main concern is students jumping to private vocational colleges. Once in Australia, they can access the jobs market and, ultimately, a path to permanent residency”.

“Normally, universities would expect a churn of less than 10% of international students within any given semester. Now that figure is anywhere between 40% and 70% at some institutions”, Hare wrote.


The problem is reportedly worst with Indian students from the states of Punjab and Haryana, facilitated by onshore migration agents doubling as education agents.

In a separate article, Julie Hare described the “rampant gaming of the visa system and large-scale poaching of students by dodgy agents”.

These “unethical – some say illegal – behaviours echoes international student booms and busts of years gone by when legislative loopholes have been exploited under lax policing by authorities”, according to Hare.

“The pitch to students is they can stay in Australia and study a vocational qualification for a fraction of the cost of a reputable program while still gaining access to the jobs market”.


As expected, “poachers have close links with the Indian diaspora, finding their targets at temples, in community groups and in cultural and sporting organisations”.

Meanwhile, Professor Sarah Todd, vice-president (global) at Griffith University, warned that “in recent years, we have seen a different student cohort, particularly applying from South Asia, who are more motivated by migration and employment opportunities”.

Julie Hare notes that the scams have been incentivised by the uncapping of the number of hours that students can work in Australia, alongside the increase in the number of years people could stay to work following graduation.

The same problems have afflicted Canada, “which had an open-door policy during COVID-19, was overwhelmed with non-genuine students gaming access to the jobs market”.


Meanwhile, Abul Rizvi claims history is repeating.

“Australia has three times previously seen a boom in overseas students like the one we are currently experiencing. And in each instance, things ended abruptly and in tears”, Rizvi said.

Whereas Phil Honeywood, executive director of the International Education Association of Australia, says “there needs to be a comprehensive regulatory framework to rein in the bad behaviours of some education agents”.

The international student “ponzi scheme” will only worsen under the Albanese Government’s reforms, which are ‘red rag to a bull’ for students and agents seeking to manipulate the visa system for work and migration purposes.


Stubbornly high youth unemployment, endemic wage theft, exploitation and crush-loaded housing and infrastructure will become a permanent feature unless corrective action is made soon.

Instead of trying to bring in as many international students as possible, policymakers should instead target a smaller pool of excellent (genuine) students.

This reset could be achieved by increasing the financial hurdles for entering Australia, lifting entry standards (especially for English language proficency), and removing the clear connection between studying, working and permanent residency.


This qualitative approach would:

  • lift student quality;
  • increase export income per student;
  • enhance wages and working conditions;
  • reduce enrolment levels to manageable and sustainable levels, thereby enhancing quality and the learning environment for local students; and
  • ease population pressures.

Sadly, the Albanese Government has instead chosen quantity over quality by trashing entry standards.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.