Student visa factories threaten to close

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The higher education lobby has spat the dummy over the Albanese government’s modest proposed caps to international students, which would see student numbers limited to 40% of total enrolments.

Australia’s million-dollar vice-chancellors warned that 14,000 jobs could be lost across the industry if the caps go ahead.

Whereas the CEO of lobby group Universities Australia, Luke Sheehy, slammed the government’s “rushed policy” to ration the number of international students, claiming that the university sector had already lost 60,000 students as a result of a 23% reduction in visas granted to international higher education students during the past year.

Duncan Maskell, vice-chancellor of the University of Melbourne, said international students account for 45% of total enrolment and bemoaned that reducing the number to 40% would “cost us more than $1.5 billion over five years”.

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Hilariously, Maskell’s claim comes amid an ABC report this week revealing how economics tutorials at the University of Melbourne are being held in Mandarin:

Felix Pirie, deputy chief executive of the Independent Tertiary Education Council Australia, claimed that some private training colleges have already laid off staff. He stated that at least ten providers “have all started making redundancies, and two plan to close campuses in the next three months’’.

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He stated that capping overseas enrolments at 40% of students “would be a job killer for Australians working in those providers’’.

Peter Hendy, CEO of Independent Higher Education Australia, warned that caps on international student numbers may bankrupt certain private training institutes. “They would go under … it would be a catastrophic event for those involved’’, he said.

Meanwhile, Vicki Thomson, chief executive of the Group of Eight, claimed that universities are “shaping up to be the fall guy’’ for public concern over housing shortages and crime.

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Australia had by far the highest share of international students in the world prior to the pandemic:

International Students

Source: Salvatore Babones (2019)

The numbers since have ballooned to ludicrous levels, as illustrated in the following chart:

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According to the Department of Home Affairs, Australia had 825,000 people on either a student or graduate visa in June. This means that nearly one-in-30 people in Australia currently hold one of these visas—an enormous number.

Meanwhile, universities have been caught handing degrees out like candy to students without functioning English and who do not understand the course work.

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Tarric Brooker Tweet

Cheating by international students is rife. And local students have been forced into tutorials and group assignments with classmates who cannot even speak English.

The reality of the situation is that the 40% cap on international student enrolments is far too high and would see the system continue as is. Worse, it is only temporary.

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That said, the 40% cap would have the advantage of shutting down dodgy private colleges that have been established purely as visa factories for people seeking backdoor migration and work rights:

Private ghost colleges

On this point, Matt Barrie hit the nail on the head with the following Tweet:

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Matt Barrie Tweet

The entire international education “industry” has reached peak farce and needs a complete overhaul.

Australia must aim for a much smaller cohort of high-quality students, focusing on quality over quantity.

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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.