Experts Warn of Growing Exploitation in Australia's Student Visa System
Concerns are mounting over the integrity of Australia's immigration framework, as experts highlight a troubling trend of international students allegedly using academic courses as a covert entry point into the country's labour market. A report published on Thursday by the Menzies Research Centre, a think tank aligned with the Liberal Party, has brought this issue to the forefront, detailing what it describes as widespread 'visa-hopping' practices.
Surge in Dropout Rates and Bridging Visas
According to data from the Department of Education, the first-year dropout rate for international undergraduate students reached 17.4 per cent in 2023. This figure represents a significant increase from the pre-pandemic era, when the dropout rate stood at just 9.7 per cent in 2018. The report suggests that this rise is not merely coincidental but indicative of a systemic problem.
MRC Chief Economist Nico Louw emphasised the severity of the situation in comments to the Daily Mail, stating, 'This is a backdoor into the Australian labour market and it's been left open.' He further explained that non-genuine students are learning to exploit the visa system, leading to tens of thousands of dropouts who remain in the country to work, thereby placing additional strain on housing and public services.
Alarming Statistics from Australian Universities
The report provides a detailed breakdown of dropout rates across various institutions, painting a concerning picture of academic attrition among international students. In 2023, eight Australian universities recorded first-year dropout rates exceeding 20 per cent. Five institutions saw rates above 25 per cent, while ten universities reported rates surpassing 33 per cent.
Most strikingly, Central Queensland University experienced the highest attrition rate at 57.2 per cent, meaning that more than half of its international students dropped out during their first year of study. These figures underscore the scale of the issue and raise questions about the motivations behind student enrolments.
Impact on the Labour Market and Social Services
University of Sydney Associate Professor Salvatore Babones, one of the authors of the report, highlighted the broader economic implications of this trend. He noted that international students now constitute approximately 10 per cent of Australia's entire labour force, describing this as a 'massive influx of unskilled labour.' This influx, he argues, makes it increasingly difficult for Australians, particularly those with low skills and no formal degrees, to secure employment in sectors such as supermarkets and care homes.
Babones pointed out that this dynamic has contributed to many low-skilled Australians remaining on JobSeeker benefits or transitioning to the Disability Support Pension. He advocated for a straightforward solution: requiring international students who drop out of university courses to leave the country and reapply from offshore if they wish to switch to vocational training. 'That's only fair,' he remarked, 'since hundreds of thousands of other students who honestly apply to study cooking and hospitality don't get the rapid approvals that university applicants get.'
Administrative Challenges and Visa Processing Delays
The report also sheds light on the administrative burden created by these practices. Currently, there are 42,000 student visa cancellation and refusal appeals pending before the Administrative Review Tribunal. Student visa refusals and cancellations account for more than one-third of the ART's caseload, leading to significant delays. During these protracted appeal processes, applicants continue to hold work rights, further exacerbating the situation.
Additionally, the number of individuals on bridging visas while applying for student visas has seen a dramatic increase, surging from 13,000 in 2023 to over 107,000 in 2025. This sharp rise highlights the growing reliance on transitional visa arrangements as a means to extend stay and work permissions in Australia.
Calls for Systemic Reform
In light of these findings, the report calls for urgent reforms to ensure that the student visa system serves its intended purpose. Babones concluded, 'The university visa should not be a backdoor into Australia's labour market. It should be for people who genuinely want to study at universities.' The recommendations put forward aim to restore integrity to the system, ensuring that it benefits both genuine students and the Australian economy without undermining local employment opportunities.
