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Visa hike expected in May as Australian sector share prices fall

International education stakeholders across Australia are concerned that the government will hike visa fees for international students in its May budget, marking another blow to student mobility after a string of recent measures.
April 17 2024
5 Min Read

International education stakeholders across Australia are concerned that the government will hike visa fees for international students in its May budget, marking another blow to student mobility after a string of recent measures.

Numerous reports suggest that Canberra will raise international student visa fees from the current $710 next month.

A Department of Home Affairs spokesperson confirmed to The PIE that “any changes to student visa application fees would be a decision for government”, but could not detail if authorities had plans to hike fees.

“Australia’s student visa program is an integral part of the international education sector. The primary focus of the program is to achieve quality education outcomes for international students,” they said.

The Migration Strategy, released on December 11, includes measures to improve the quality and integrity of Australia’s international education, they added.

“These changes will support students to receive a quality education, reduce the risk of exploitation and ensure Australia continues to welcome genuine students.”

Non-aligned think tank, the Grattan Institute, first proposed raising the fee to $2,500 per visa in a bid to fund more for Commonwealth Rent Assistance for Australian citizens.

The Melbourne-based organisation argues that, while landlords and the economy are boosted by international students, local young people lose out as a result of rising rents rise due to limited supply.

The influential think tank has previously called for the duration of post-study work visas to be cut. It has also urged government to raise the English language requirement for temporary graduate visa-holders, which authorities have now done.

Stakeholders have repeated that international students are not the cause of housing shortages – with high interest rates hitting supply issues in the construction industry – but acknowledge that they have accelerated supply issues.

On April 12, the Australian Financial Review reported that the fee will likely not be as high as the $2,500 put forward by the Grattan Institute, with IEAA’s Phil Honeywood saying any rise above the Consumer Prices Index would make Australia “globally uncompetitive”.

“As the fee is non-refundable, it will be hugely inequitable for the large numbers of students who are having their visas rejected,” Honeywood told AFR.

The UK has already introduced health surcharge and visa fee rises to fund public sector pay rises – which saw Downing Street accused of treating overseas students as “cash cows”.

In October of last year, fees for UK student visas increased by 35% to £490 (AU$950), making it the most expensive visa application fees among popular study destinations.

Sources The PIE spoke to said that beyond the rumours there is no detailed information, especially around how much the fees would rise by.

“It’s baffling that the Australian government would penalise overseas students”

However, they said that any major increase in fees would deter students – and limit education providers to a handful of student source markets.

ITECA chief executive, Troy Williams, a rise in application fees would be “consistent with the Australian government’s clear policy intent to reduce the size of the international education sector”.

“[Overseas students] add greatly to the nation’s cultural diversity and enrich our society, so it’s baffling that the Australian government would penalise overseas students wanting to take-up study in Australia,” Williams said.

Figures released this week by English Australia for January show that visa grant rates for VET or ELICOS & VET students have plummeted to 85.2% – which the peak body highlighted as the “lowest since records began by a significant margin”.

For those visas for ELICOS students made offshore, the average grant rate has fallen to the “devastatingly low 57%”, it added.

Colombia, Peru, Turkey and China all saw grant rates plummet or decline in January, the body highlighted.

English Australia said that the government continues to “choke the sector of incoming students” with its current visa processing approach.

Since December, students applying for institutions across the country have been facing unexpected visa rejections.

NextEd, which operates a group of eight private tertiary education businesses and a global international student recruitment agency, has seen its share price drop by 81.76% in the last year. Similarly, IDP Education has seen a fall of 41.73% in the past 12 months.

Analysis compiled by StudyMove has found that no countries have seen any improvements in visa grant rates.

For both VET and higher education, the number of India and Pakistan visa lodged and grant rates have both declined in the latest statistics.

While China and Bangladesh have both recorded increases in visas lodged for higher education students, both market have seen a slight decline in grant rates. Photo: StudyMove

“It’s clear there has been a significant reduction in student visas granted, affecting all sectors and markets. But it is more evident that these effects are impacting quite significantly more ELICOS and VET,” Keri Ramirez from StudyMove said.

“Unfortunately this is something that is just starting,” he added. “It will be interesting how the sector, which has shown to be resilient in the past, adjusts.”

One source working in the ELICOS sector told The PIE that non student visa markets will be “crucial”.

The combination of increased English requirements and increased visa fees will likely slow markets in Latin America, but will “hopefully not kill it, provided visa grants come through”, they added.

However, a pricing war is “inevitable” in the ELICOS and VET markets due to the current climate, they suggested.

“Unfortunately this is something that is just starting”

Williams urged Canberra to align its international education strategy with its December migration strategy.

“The former encourages international students to take-up study in Australia and the latter seems to say that these students should stay home, there is a real inconsistency here.”

There are also fears that a cap, similar to that which was introduced this year in Canada, could be brought in by Australia’s government after figures in February showed more than 700,000 international students were enrolled in institutions across the country.

Honeywood, who previously confirmed that there would be no cap on international student numbers in Australia last year, said that a limit on numbers will not be included in May’s budget.

However, it could be part of future discussions, he told AFR.

Measures that will deter students from coming to Australia, such as raising visa application fees, will threaten “the livelihood of many thousands of working Australians dedicated to delivering high-quality skills training and higher education outcomes for international students”, Williams concluded.

UPDATE: (April 19, 8:30 GMT) comments from the DHA have been added to this article.

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