Australia has opened consultation on a potential overhaul of its student visa framework, including possible requirements for applicants to hold study funds in Australian bank accounts, as the government seeks to improve certainty for genuine students while tightening financial checks.
A Department of Home Affairs consultation paper released today sets out options to revise Ministerial Direction 106, which guides assessments under the Genuine Student requirement, alongside a new financial-capacity architecture for student visa applicants.
No decisions have been made, with submissions open until November 23.
The consultation follows concerns raised by assistant minister for international education Julian Hill at the Australian International Education Conference (AIEC) 2026 in Sydney over persistently high offshore visa refusals, particularly in South Asia.
“While the government will not compromise on integrity, I believe Navitas data and market feedback make clear that the rate of refusals is now impacting key markets and actively deterring the very students we most want to come to study in Australia, as they are terrified of a visa refusal that hurts their chances of studying elsewhere,” Hill told delegates.
Hill rejected suggestions that the rise in refusals was driven by migration targets, saying it reflected genuine integrity concerns, including cases where applicants could not realistically afford to study without a long-term migration outcome.
He said Home Affairs and the Department of Education had been working with the Student Visa Technical Reference Group on updated financial standards for South Asia, a new legislative instrument and a draft direction to replace MD106.
At the centre of the consultation is a possible move away from the current, largely document-based system towards a more standardised and verifiable approach to financial evidence.
Under the first three illustrative models, applicants would ultimately be required to hold relevant funds in an eligible Australian bank account in their own name before lodging a visa application.
One model would require students to demonstrate 50% of total tuition and prescribed living costs for their full course or package of courses, held for at least one month and released according to a prescribed schedule.
A second would require the same amount to be held for three months, but without mandatory restrictions on access. A third option would require 100% of first-year tuition and prescribed living costs to be held for three months, with managed disbursement potentially applied to defined cohorts.
A fourth option would create a controlled pathway for recognised education finance, allowing approved loans, scholarships, personal funds or a combination of these to meet the requirement. Direct reliance on recognised finance without first transferring funds into an Australian account could be permitted only in limited circumstances.
At AIEC, Hill pointed to New Zealand’s system, in which students deposit funds for tuition and living costs, as a comparable model that could be considered as a longer-term Australian initiative if the government deemed it in the national interest.
All four models would require financial evidence at the point of visa lodgement, independently of provider Evidence Level settings. They would also require verification of the source, ownership, accessibility and sustainability of funds.
While the government will not compromise on integrity… the rate of refusals is now impacting key markets and actively deterring the very students we most want to come to study in Australia, as they are terrified of a visa refusal that hurts their chances of studying elsewhere
Julian Hill, Australian education minister
Prospective earnings from work in Australia would not be accepted as a substitute for essential tuition and living costs.
The department is also weighing an interim measure for primary applicants from countries classified as Evidence Level 3 while it develops longer-term financial rules. Those students could be asked to submit evidence of their finances when applying, regardless of their provider.
Their deposits would generally need to show six months of transaction history, while financial support would normally need to come from the student, their spouse, parents or another approved supporter.
The proposal would favour secured or government-backed loans and recognised education-finance products, while generally excluding unsecured personal loans or loans that have not been paid out.
It would not raise the amount students must currently show, instead, the focus would be on proving that funds are genuine, accessible and sustainable.
The consultation also proposes changes to MD106, including different considerations for students beginning a new course and those continuing or returning to study, with decision-makers looking at the credibility of a proposed course and evidence of previous study and progression.
It could reduce reliance on formulaic Genuine Student statements and treat completed study through a credible transnational education pathway as a positive factor where applicants can demonstrate genuine progression and good outcomes.
At AIEC, Hill said the government wanted rules that more closely reflected how visa applications were assessed in practice.
“Even if this means raising the financial standards and a smaller pool of prospective students, I want grant rates to improve and greater certainty for everyone,” he said.
The consultation arrives weeks after the government’s latest student visa integrity reforms took effect, restricting most students and graduate visa holders from adding family members to their visas while tightening onshore application, course-transfer and study-progression rules.
Even if this means raising the financial standards and a smaller pool of prospective students, I want grant rates to improve and greater certainty for everyone
Julian Hill, Australian education minister
Hill defended those measures as necessary to curb visa hopping and the growth of “permanently temporary” migrants, while acknowledging transitional impacts across the sector.
For students who need to apply from offshore to complete their studies, he said the department had instructed decision-makers to give complete and straightforward applications the highest priority, with a target processing time of five days.
Education groups have warned that the cumulative effect of higher visa costs, tighter settings and refusal rates risks making Australia appear unaffordable or inaccessible to genuine students.
Writing on LinkedIn after the consultation was released, Renée Leon, vice-chancellor of Charles Sturt University and a board member of Universities Australia, said Department of Home Affairs data showed offshore higher education student visa grants had fallen by more than 40% year on year.
“Students need more clarity about whether they will meet visa requirements before they spend $2,500 to apply for a visa,” Leon said, while supporting the government’s aim of strengthening integrity.
Her comments echo wider warnings from the sector, including the Independent Tertiary Education Council Australia (ITECA), that integrity action must distinguish between non-genuine operators and students, and a system that restricts access to education and Australia’s longer-term skills pipeline.
For Hill, however, clearer and more verifiable rules are intended to resolve, rather than deepen, that tension.
“The aim of all of this is to be as clear as possible to prospective students on the financial capacity requirements and ensure the published rules remain aligned with the department’s internal processing approach,” he said.
