Dodgy private colleges must be driven out of business

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The Department of Education has released data on international student enrolments, which shows that a record 943,977 students were enrolled in Australia as of July 2024:

International student enrolments

The following table shows the breakdown of enrolments by type of institution:

International student enrolments by category
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As you can see, the strongest growth in student numbers since 2019 has come from vocational education and training (VET), which grew by 96,083 to 318,935.

The Albanese government is trying to reduce net overseas migration by capping international student numbers.

However, we have seen large numbers of former students clogging up the Administrative Appeals Tribunal (AAT) with spurious asylum seeker claims in a bid to extend their stays in Australia.

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Refugee students

This has resulted in a surge in former students switching to bridging visas:

Bridging visas
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The AFR’s education editor, Julie Hare, reported that dodgy private colleges are using creative ways to sidestep the government’s caps on international students, including converting master’s programs into research-based degrees and filing official forms with incorrect names.

Private colleges are also offering huge fee discounts and commissions to agents in a bid to enrol as many students as they can before caps come into force next year.

“New manoeuvres that have come to light include providers seeking advice on how to convert postgraduate degrees into ones that are exempt from the caps, and wrongful or misleading information on official forms”, Hare wrote.

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“Filing forms with incorrect information allows dodgy providers to poach students who are already in Australia on a visa, without alerting authorities”.

“It’s quite common – they’re playing with name formatting, and the system is allowing them to issue new CoEs when they’re not meant to”, said one agent, who asked not to be identified.

“There’s all these dodgy providers blatantly breaching the CRICOS [Commonwealth Register of Institutions and Courses for Overseas Students] rules”, the agent said.

“That is on top of vocational colleges offering vastly discounted fees, 50% cash-back guarantees on $1600 visa application fees and fast-tracked certificates of enrolment (CoEs), despite government promises to crack down on such practices”, Hare added.

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“Desperate colleges are also stacking several courses into packages to ensure students can stay longer in Australia, shoring up their cash flows, and giving agents commissions of up to 50% or up to $5,000 cash incentives”.

There are around 3,800 registered training organisations in Australia, with plenty passing the low bar to be accredited.

Dodgy colleges
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Matt Barrie was spot on when he said that half of these providers need to be stripped of their accreditation:

Matt Barrie Tweet

The abuse of the student visa system has become so commonplace that it is now considered normal. This is a feature, not a bug.

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The entire system of student visas and private colleges must be reset, with all Mickey Mouse providers losing their accreditation and visa applications being denied.

The federal government must also tighten the appeals processes around visas and the AAT to ensure that students go home once their visas expire or their applications for another visa are rejected.

More generally, Australia must aim for a far smaller cohort of high-achieving students. The visa system must prioritise quality above 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.