‘Great news': Migration agents celebrate Labor's student surge as ‘new scam' exposed
On Monday, the Albanese government announced it was increasing the 2026 national planning level by 25,000 to 295,000 international student places in order to provide 'stability and certainty for the international education sector', with a focus on increasing numbers from Southeast Asia.
The announcement was roundly hailed as 'great news' by migration agents on TikTok.
'If you are planning to study in Australia, this news is for you,' one said. 'Stay informed, stay ready. Things look very positive for international students moving forward.'
Another said the announcement 'clearly shows that Australia remains committed to valuing international students and is focused on creating new opportunities for them'.
'This is the right time to apply for a student visa to Australia,' a third declared.
'The new scam'
Salvatore Babones, Associate Professor Sociology and Criminology at the University of Sydney and author of the 2021 book Australia's Universities: Can They Reform?, has long been a vocal critic of the international student sector.
Reacting to the latest increase, Prof Babones agreed with the characterisation of the sector as a 'racket'.
He said there was an 'emerging phenomenon' of increasing dropout rates as international students 'recognise you can get in on a university visa and switch'.
'This is the new scam,' he said.
'We have many universities, mostly regional, that have dropout rates of [more than] 50 per cent after the first year.'
The most recent figures from the Education Department for 2022 showed Central Queensland University had an attrition rate of 67 per cent within the first year, while Victoria's Federation University had a 48 per cent attrition rate.
Earlier this year, Queensland University of Technology (QUT) revealed nearly half its foreign students — 46 per cent — dropped out in their first year.
'That makes it very clear that international students are not applying to these universities for the purpose of studying in Australia, they're applying for the purpose of getting into the country, after which they can apply for a different visa,' Prof Babones said.
'They can easily get a bridging visa and then get a visa to study at a cooking school or a language school, and then you can stay in Australia almost indefinitely.'
Griffith University, where more than one in four international students dropped out last year, told The Australian in April that the low retention rates for cohorts from Kenya, Pakistan and parts of India reflected 'the evolving international student landscape and the flexibility students have under current regulations, which sees visa holders able to transfer to other institutions after six months study'.
A 2023 report from the Australian government's Centre for Population revealed fewer than half of international students had left the country a decade after arriving.
Of the 103,000 students arrivals in 2006-07, only 44 per cent had completed their studies and returned offshore by 2016-17, while 39 per cent gained permanent residency and another 17 per cent remained in the country on various temporary visas.
Prof Babones said Australia's annual permanent migration intake, currently set at 185,000 places, was 'large but not extreme', although it's among the highest in the world on a per capita basis.
'The real problem is the succession of temporary visas, which has created a class of guest workers in Australia,' he said.
Hanson explodes
Ms Hanson, in a statement on Thursday, said Labor's move was a 'betrayal' of Australians during a housing crisis and claimed the 'international student racket' stole more than $10.5 billion a year from the economy.
'It was just another Labor lie, with this abysmal government now increasing foreign student numbers while Australian families go homeless and Australian tertiary students drop out in record numbers,' the Senator said.
'Foreign student numbers are already out of control and beyond Australia's capacity to sustain. Net foreign student arrivals in the first quarter of 2025 were just shy of 200,000 — up 15 per cent from the same period last year. February 2025 set a new all-time record for net monthly foreign student arrivals.'
Ms Hanson said those people were 'occupying dwellings that should be homes for Australians, and buying real estate with foreign money that should be solely in Australian hands'. 'It's a backdoor to more out-of-control immigration as they're allowed to bring family members here,' she said.
'Many of these people are taking jobs that should be held by Australians — often for under-the-table cash, which is then sent home.'
According to the Institute of Public Affairs (IPA), a conservative think tank, foreign students earned $15.4 billion in Australia through part-time work in 2023, with more than $10.5 billion of it being sent back overseas.
'This puts a huge dent in the claim this 'industry' is worth almost $50 billion a year to the national economy — it isn't,' Ms Hanson said.
'Any foreign student found not to be paying tax should have their visa cancelled, and should be thrown on the next flight back to their home. Foreign students should not be able to run businesses or be issued with ABNs. They are here to be educated and then to go back home, not enriched and accommodated at the expense of the Australian people.'
She added, 'Australian universities are supposed to be not-for-profit institutions. This status enables them to avoid paying tax on the upfront fees foreign students pay them, and to which they have become addicted like meth junkies. Australian taxpayers are being ripped off by the 'international student' racket.'
Students earn $13.4 billion
International education is described as a $50 billion export by the Australian Bureau of Statistics (ABS).
All spending by international students in Australia on tuition fees and other goods and services is recorded as an 'education export' in the ABS' Balance of Payments (BOP) data, although that figure is often attacked by critics of the sector as it does not take into account money earned by students working in Australia.
The Reserve Bank (RBA) estimates international students earned $13.4 billion in 2023-24, but notes this figure does not capture 'funds a student may receive from or send overseas ' as transactions between nonresidents are not captured in the BOP.
'This could mean student earnings are underestimated in the BOP … survey evidence [shows] that temporary migrants are much more likely to be paid below-minimum wages, meaning cash-in-hand work may be prevalent,' the RBA noted in a July research bulletin.
The RBA said international students make an 'important contribution to the labour market'.
'A greater share of international students work in accommodation and food, as well as retail, compared with the share of the total labour force,' the report said.
According to the RBA's estimates, 23.4 per cent of international students worked in the accommodation and food sector, compared with 6.6 per cent of the total labour force.
'Further, an increasing share of students are now working in health care, consistent with strong labour demand in this sector,' it said.
'This contribution was important in helping businesses in these sectors facing labour shortages in the tight labour market that emerged post-pandemic.'
Prof Babones said the overwhelming majority of international students worked in low-skill occupations, and their earnings were likely significantly underestimated as gig economy jobs like UberEats were not captured in the data.
Digital service platforms only became legally required to report income earned by users to the Australian Taxation Office (ATO) last July under the Sharing Economy Reporting Regime (SERR).
'We just don't have any data on how many are working in the gig economy,' he said.
'It makes us friends'
Announcing the increased caps on Monday, Labor noted the 2026 level was still 8 per cent below the immediate post-Covid peak.
The new number means all active international education providers will receive at least their current allocation next year.
Public universities will be able to apply to increase their allocations if they can demonstrate both increased engagement with Southeast Asia, and provision of student accommodation.
The top five source countries, accounting for 57 per cent of all international students, are currently China (23 per cent), India (17 per cent), Nepal (8 per cent), Vietnam (5 per cent) and the Philippines (4 per cent).
'International education is an incredibly important export industry for Australia but we need to manage its growth so it's sustainable,' Education Minister Jason Clare said on Monday.
'International education doesn't just make us money, it makes us friends. This is about making sure international education grows in a way that supports students, universities and the national interest. The new planning level gives the sector certainty to continue delivering a high-quality educational experience to international students, while addressing national priorities.'
Home Affairs Minister Tony Burke said the government was 'supporting a strong international education sector, while maintaining the integrity of the migration system'.
'We are making sure student visa processing supports genuine education outcomes and our strategic priorities — including increasing provision of student accommodation,' he said.
'This is about backing providers who do the right things and giving them the certainty they need to grow sustainably.'
Assistant Minister Julian Hill hailed international education as 'a great Australian success story'.
'Australians can rightly be proud of this now over $50 billion export sector, which supports over 250,000 Australian jobs,' he said.
'It's the biggest export we don't dig or drill out of the ground. This government remains committed to sensibly managing the size and shape of the onshore student market and supporting sustainable growth, especially to welcome more students from Southeast Asia and where accompanied by new housing. We want students to see Australia as a premium destination where they can access high-quality education and a great student experience.'
Ministerial Direction 111, previously used by Labor as a 'soft-cap' on student visa processing after legislation was blocked by the Coalition and the Greens, and will be replaced with an updated ministerial direction to reflect 2026 arrangements.
'Strategically important cohorts', including Pacific and Timor-Leste students and Australian government scholarship holders, will continue to receive high-priority student visa processing in 2026.
50 per cent in private rentals
Around 50 per cent of international students rent in the private market, according the 2023 QILT Student Experience Survey, compared with around one-third of the broader population.
'As a back-of-the-envelope exercise, if we assume that 50 per cent of international students rent, an additional 100,000 students would increase private rental demand by 50,000 individuals,' the RBA said.
'Models of the housing market used by the RBA suggest that a 50,000 increase in population would raise private rents by around 0.5 per cent compared with a baseline projection. The marginal effect of an additional renter may be greater in periods where the rental market is tight and vacancy rates are low, such as occurred post-pandemic.'
But the RBA said the rise in international student numbers was 'likely to have accounted for only a small share of the rise in rents since the onset of the pandemic, with much of the rise in advertised rents occurring before borders were reopened'.
'With time, higher demand for housing due to a greater number of international students in Australia could spur more dwelling investment, in the way it would for an expansion of the population more broadly,' it said.
'However, capacity constraints, high costs in the construction sector and low levels of building approvals relative to the population may mean the housing supply response could be slower to materialise compared with in the past.'
The RBA noted higher international student numbers had seen an increase in building approvals for purpose-built student accommodation in recent years.
'Industry projections are for continued rapid growth in this area in the years ahead,' it said.
Several studies have found international students were not to blame for Australia's rental crisis, including one from researchers at the University of South Australia earlier this year, and another last year by the Student Accommodation Council — part of the national Property Council lobby group.
However property research firms including CoreLogic and PropTrack have previously correlated overseas migration with rising rents.
It comes as the latest Home Affairs Department visa data for Q2 2025 shows there were 821,251 people in the country on either a student or a graduate visa.
'This figure was only 3505 fewer than the all-time peak in Q2 2024 and up a whopping 165,702 on the pre-pandemic peak of 655,549,' MacroBusiness chief economist Leith van Onselen wrote on Wednesday.
'The latest data … indicates that the Albanese government's 'crackdown' on the international education sector has had minimal impact.'
'Clearly in the national interest'
The university sector welcomed the announcement on Monday.
'Universities have called for growth in this critically important sector, and the government has honoured this,' Universities Australia chief executive Luke Sheehy said in a statement.
'This is a sensible approach and will provide the stability and certainty universities desperately need. International students contribute $52 billion to Australia's economy and are a vital part of our communities, filling skills gaps in our cities and regions and strengthening our cultural fabric. They also directly support universities, covering domestic funding gaps and ensuring our sector can continue to deliver the pipeline of skilled workers and undertake the R&D our country needs.'
Mr Sheehy said universities 'welcome the opportunity for universities to grow their international student intake by aligning with key national priorities, including deeper engagement with Southeast Asia and the provision of safe, secure student accommodation that benefits both domestic and international students'.
'We'll continue to work constructively with the government to strengthen the integrity of the sector, including the design of a new ministerial direction, to ensure our prized international education sector continues to deliver in the national interest.'
The Group of Eight (Go8), comprising the country's top research universities, said it supported efforts to 'improve the quality and integrity of Australia's international education sector'.
'A strong international education sector brings multiple benefits to Australia and is clearly in the national interest,' Go8 chief executive Vicki Thomson said.
'A national planning level that provides stability and certainty for the sector is vital to ensure Australia can continue to attract high quality international students to provide much needed talent in areas such as engineering and STEM.'
Ms Thomson said international students 'not only provide the high-level skills needed by Australian industry, they underpin our strategic partnerships and build our soft diplomacy capacity around the globe and importantly in the ASEAN region'.
'Go8 universities already enrol more than one third of all ASEAN students studying in Australia,' she said.
'In the current geopolitical environment, it has never been more important to strengthen our links with partners around the world but especially within Southeast Asia. A strong international education sector is also critical to our capacity to generate the research that drives Australia's innovation and productivity.'
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