Prepare for a crash in international students

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The AFR’s Julie Hare reports that the number of international students and graduates in Australia has hit an historic high of nearly one million.

This has prompted warnings from immigration shill Abul Rizvi that the expected rise in unemployment could prompt the government to restrict the number of students admitted to the nation and communicate to potential entrants – many of whom use study visas as a backdoor to work – that there are greater job opportunities in Canada, the United Kingdom, and the United States.

Rizvi also warns that graduate visa holders could be left in “visa limbo”, whereby if they lose jobs they will be permitted to stay in Australia, but will not have access to welfare.

“If you look at the steepness of the rise in job vacancies, if it was to fall just as steeply, you have a problem”, Rizvi told The AFR.

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Conditions that had preceded three previous student market crashes were present, according to Rizvi. And it was up to the Albanese to take actions to guarantee the student intake was more sustainable.

These conditions included: a rapid increase in student visa holders associated with a strong labour market and lax regulation; a high level of fraud among student visa applicants; an increase in dodgy education providers delivering low-quality courses designed to allow students to do little study and mostly work; and migration agents misleading students about living costs and pathways to permanent residency.

Phil Honeywood, chief executive of the International Education Association of Australia, has previously labelled the current system a “ponzi scheme” and a “race to the bottom”, and called for greater regulation of education agents and students to ensure only genuine applicants arrive.

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Honeywood told The AFR that he wants the Albanese Government to get “rid of the Covid Recovery 408 visa which is prompting too many students to jump out of studies to work full time”.

He also wants regulators to get additional resources “to close down dodgy providers would also send the right message about quality control”.

Ultimately, the federal government should focus on attracting a smaller pool of excellent (genuine) students by raising financial barriers to entry, increasing entrance requirements (particularly for English language proficiency), and eliminating the clear link between studying, working, and permanent residency.

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These reforms would improve student quality, increase export income per student, improve wages and working conditions, and reduce enrolment levels to manageable and sustainable levels, hence increasing the quality and learning environments for local students and relieving population pressures.

To put it another way, international education should prioritise quality above quantity.

It was never in the national interest to run low-quality student visa factories for maximum throughput. International education should not be used as a conduit for mass immigration.

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Unfortunately, the Albanese Government has doubled-down on the farce by expanding post-study work rights and migration pathways, particularly for Indian students.

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.