Consequences of not targeting student visa policy and a possible solution

Australia’s student visa surge has been delayed, not fixed, and without tighter targeting, backlogs, uncertain visas and migration will continue to be caused by accident rather than policy, writes Dr Abul Rizvi.

Following a boom in student visas triggered by the Coalition Government’s unprecedented policies such as unlimited work rights, free applications and COVID visas, the Labor Government belatedly tightened the policy from mid-2023.

But no one should assume that the consequences of this boom have now been resolved or that student visa policy is now on the path to so-called “sustainable growth”. We are far from that.

The increase in offshore student visas has been the main driver of the massive net migration boom in 2022-23 (see Table 1).

(Data source: ABSs / data.gov.au)

Onshore student visa applications and grants also increased (see Table 1). The extraordinary peak in onshore student visa grants towards the end of 2023 was an attempt to clear a massive onshore backlog of student applications, but this only served to push the problem into the future. It didn’t solve anything.

The Government subsequently tightened onshore student policy, including preventing visitors from applying for onshore student visas and increasing the refusal rate. But this only increased the backlog of onshore student applications (see Table 2) and created a huge backlog of rejected students at the Administrative Review Tribunal (ART) (Table 3).

The problem with this approach was that it relied on the highly subjective “real student” requirement to guide rejections, rather than using more objective criteria.

(Data source: DHA Reports on the Administration of the Migration Programme)

However, the tightening of policy has led to the overall stock of student visa holders starting to stabilize at the level just before COVID (about 650,000-plus student visa backlogs).

But this doesn’t take into account what happens to students who complete their courses and don’t leave.

Given the large number of students who will complete courses in 2024-25 (perhaps around a quarter to a third of the 650,000-person stock), you might think there will be an increase in students gaining direct permanent residence. Instead, there has been a steady decline in students directly gaining permanent residence (Chart 4). In 2024-25, it was at its lowest level in more than a decade. How can this happen?

Part of this may be due to the large backlog of students applying for permanent residence. Another part is that there could be a possible decline in the number of students taking in-demand courses with significant skilled work experience (either in Australia or overseas) and thus being able to use this to secure skilled jobs and thus direct permanent residence.

However, the main reason for this is that it now takes much longer for students to obtain permanent residence permits. We need to look at the temporary visas that students receive on land in the lead-up to applying for permanent residence. Apart from visitor visas, temporary activity visas (which notably include the now-removed COVID visa in 2022-23) and other onshore student visas, there are three main temporary visas that student visa holders are secured (see Table 2).

provisional graduates

The key to what will happen to students is the temporary graduate visa. The number of temporary graduate visa holders has exploded in the last decade (see Chart 5).

The government should better target the design of this visa to Australia’s long-term skills needs, rather than allowing almost every student who completes their course to qualify for this visa. It is worth noting that a staggering 63,987 students applied for temporary postgraduate visas in the first five months of 2025-26 compared to 31,541 students in the first five months of 2024-25. This means that the stock of provisional graduates, currently a record number of over 239,000, will increase even further.

While not everyone will seek permanent residence, a significant number will. If the size of the permanent immigration program is not increased, this group will remain in immigration limbo for years, including having to apply for other temporary visas and adding to the already huge permanent visa backlog.

In 2024-25, 30,782 temporary graduate visa holders gained direct permanent residence. This is in addition to the 12,637 students who were directly granted permanent residence.

Additionally, 15,479 temporary graduate visa holders received employer-sponsored skilled temporary visas in 2024-25. This was a huge increase on the 3,000 to 4,000 temporary graduates who had secured them in recent years. The impact of increased onshore demand for skilled temporary visas can be seen in Chart 6.

What should the government do?

Unless it is prepared to significantly increase the size of the permanent migration programme, something it must do anyway given the current flood of applications, the Government needs to take steps to further tighten and better target the student visa system.

I recommend the following:

First, adopt the use of a government-regulated method university entrance exam as the primary criterion for student visa eligibility. This will enable both better management of student numbers and better targeting of high-achieving students compared to the current highly subjective “real student” requirement. Student visas for the VET sector should narrowly target people who are already licensed in traditional trades (such as carpentry and plumbing) in their home country.

Second, restricting eligibility for a temporary graduate visa to students who have completed certain high-quality courses in areas where there is a long-term skills gap.

Third, limit onshore student visas to the same courses.

These three measures will enable better skills targeting, provide better immigration control and make the visa system more efficient by reducing backlogs and enabling faster visa processing at less cost.

The above measures should be implemented as part of a comprehensive, long-term migration plan, as the Government promised before the last Election.

Doctor Abul Rizvi Independent Australian columnist and a former Deputy Secretary of the Immigration Service. You can follow Abul on Twitter @RizviAbul.

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