International student financial requirements must be tightened

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The loud calls to provide thousands of international students with welfare has highlighted a key flaw in the system, namely that the financial requirements that students must meet in order to be granted a student visa are set far too low.

University of Sydney associate professor, Dr Anna Boucher, alluded to this problem over the weekend:

[Dr Boucher] said some people working in the sector believe the “asset testing” — or cost of living benchmark — for students looking to study in Australia was quite low.

“One argument is that they’re expected to be frugal, another is it’s unrealistic”…

“It allows a high number of students to gain admission, but then they’re really reliant on those part-time jobs…

According to a recent survey by Unions NSW, half of the migrant workers surveyed have lost their jobs, while a fifth have had their hours reduced.

The AFR provides a useful specific example:

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Chief executive Phil Honeywood said international students relied on part-time jobs for their living expenses but now had no work…

Student Apurv Chandrawal is studying a Masters in Construction Management at Swinburne University. He was earning $320 a week in labouring jobs and casual management shifts all of which have ended…

He pays $16,000 a semester for his course that started last August and will end in June 2021. He paid his first semester fees from savings made in India, but is not sure where money will come from for his second semester…

“I bought savings with me in August but I am running out of them. I don’t like to ask for money, but I am hoping the government might offer something like the JobSeeker payment to people like me.”

The high job losses experienced by international students has led to widespread claims that they are becoming destitute. In turn, Labor, the Greens, the trade unions, and the education industry have called on the Morrison Government to expand JobKeeper and JobSeeker welfare support to international students. They have also demanded a hardship fund be established with funding from taxpayers:

English Australia chief executive Brett Blacker — who represents the nation’s English-language schools — said the focus for the sector and Labor should now be on the hardship fund, which he argued would help more international students than JobKeeper and JobSeeker…

“Many international students wouldn’t meet the criteria for JobKeeper due to the 12-month casual rule anyway. The fund would provide help for all of our students … many of them can’t pay their fees, can’t pay their rents.”

International Education Association of Australia chief executive Phil Honeywood said a hardship fund backed by the federal government, state authorities and philanthropists would help students and protect Australia’s international education reputation…

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What this whole fiasco shows is that the financial requirements for international students are set far too low. They have come to Australia to study, not for work, and should be able to support themselves.

Of course, the industry would vigorously oppose any moves to raise financial requirements, since this would make gaining an student visa far more difficult and stem the flow of fees.

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It makes far more sense for universities to lower the entry bar and privatise the billions in tuition fees from the extra international students, and then socialise any costs onto the Australian taxpayer.

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.