Student visa factories must be driven out of business

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For decades, spurious private colleges have provided backdoor immigration and work rights to internationals “students” seeking migration to Australia.

For example, 13 years ago, GlobalHigherEd reported a proliferation of sham private colleges catering to fake students from South Asia:

In 2002 there was just over 11,000 Indian students in Australia, and by 2005 this number had grown to over 27,000… However, by last year enrolments had grown even more rapidly up to nearly 100,000 students, and most of the growth was in private vocational colleges where enrolments of Indian students increased at a startling rate, from 2,600 to 47,400 in three years…

There are low quality providers who cater almost exclusively to international students seeking fast and easy qualifications to support migration applications…

For several years, many in the Australian international education industry have been warning that the rapid growth of private colleges providers focused on migration pathway programs posed serious threats…

Before the pandemic in 2019, multiple reports emerged describing how shonky private colleges were providing fake diplomas to international students from India.

“Indian students are being exploited to the hilt.. out of which a large proportion was from Punjab”, Chandigarh-based education agent Avtar Gill told SBS.

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Former High Court Justice Ian Callinan also warned in 2019 that large numbers of organised criminals were using “ghost colleges” offering “fake vocational training prog­rams.”

Callinan wrote that “organised crime was sometimes, perhaps even regularly, benefiting from counterfeit vocational training programs and colleges”.

“Their ‘students’ were not bona fide students. Often the so-called provider would find a job for the foreign entrant, charging commissions to both the employer and the so-called ‘student employee’, and arrange, again at cost, the transmission of funds to the ‘student’s’ home country”.

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Dr Bob Birrell from the Australian Population Research Institute also in 2019 accused private ‘ghost’ colleges of opening ‘shopfronts’ in Melbourne offering cheap business and IT courses aimed primarily at students from India’s Sub-continent:

“It has little to do with the excellence of the education that’s offered here,” he said. “It seems to be effectively selling access to jobs and ­permanent residence.”

Home Affairs Department figures show Indians are the biggest applicants of the 485 student visa… Many Indian students afterwards apply for permanent residency, with more than 4000 given skilled independent visas onshore in 2016-17…

After years of inaction and rorting, the federal government has belatedly cracked down on private colleges catering to international students.

“Some 150 dormant providers have been closed down, while 140 have been told to resume “quality training””, according to SBS News.

Despite the blatant rorting of the student visa system, private colleges across Australia have hit back at the federal government’s announced 95,000 international student commencements cap for the VET sector in 2025:

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ITECA chief executive Troy Williams said the uncertainty has created a “crisis of confidence”, with ITECA members now questioning the future viability of their businesses.

According to Williams, some members are contemplating “drastic downsizing measures”, creating concerns around significant job losses for the sector…

ITECA members feel that politicians either “do not care or do not understand” the profound impact of the uncertainty on the sector and its employees.

“Over the past year, we’ve seen a series of intellectually inconsistent decisions by the Australian government that lack a clear, consistent and cohesive approach to international education,” said Williams.

ITECA is concerned the Australian government is now making international education policy “on the run”…

“Such an approach is economically reprehensible to all Australians and manifestly unfair to all those employed in the sector”.

Let’s get real here. There are around 3,800 registered training organisations in Australia. Thus, the 150 that have closed are a drop in the ocean. Plenty of dodgy providers still pass the low bar to be accredited.

Dodgy colleges

On this point, Matt Barrie nailed it with the following observation:

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Matt Barrie Tweet

Meanwhile, the student visa rorters continue to clog up the Administrative Appeals Tribunal with spurious asylum seeker claims, thereby extending their stays in Australia.

Refugee students
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As a result, the number of temporary bridging visas has spiked, driven by former international “students”:

Temporary bridging visas on issue

The rorting of the student visa system has gone on for so long that it has become normalised. It is a feature, not a bug.

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The entire system around student visas and private colleges needs to be reset, with all Mickey Mouse providers losing their accreditation and visa applications rejected.

More generally, Australia must aim for a far smaller cohort of high-quality students. The focus of the student visa system must be on quality over quantity.

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.