Amidst high visa refusal rates and falling commencements, Australian government opens consultation on reforms to Genuine Student test and financial requirements

Short on time? Here are the highlights:

Assistant Minister for International Education Julian Hill has announced the Australian government’s intention to revise processes for determining which prospective international students are genuine
The government will also strengthen financial requirements to discourage “visa hopping” and “permanent temporary migrants”
Sector stakeholders in Australia are invited to consult and provide feedback on proposed changes
The past year has seen unprecedented numbers of international students rejected for an Australian study visa
International commencements in public universities are down -18%
Mr Hill said this year’s downward trend will ultimately cost the university sector about AU$2 billion in revenues over the next three years

At the Australian International Education Conference (AIEC) in late October, Assistant Minister for International Education Julian Hill announced that the government is considering reforms to the way prospective international students’ visa applications are assessed, and rejigging the settings under which immigration officials determine those students’ financial readiness

In launching the consultation, the government is signalling its intent to update Ministerial Direction 106 (MD106), and to introduce “a revised financial capacity architecture that would provide stronger assurance that students have genuine, accessible, and sustainable funds for their studies.” It is asking for sector feedback on both counts, as documented in an official Consultation Paper called “Strengthening the Genuine Student requirement and financial capacity framework”.

In his speech at AIEC, Assistant Minister Hill said:

“Despite all the positives and the fact that many providers and students continue to do brilliantly, I acknowledge it’s been a difficult year for many. As changes to policy, integrity rules, migration reforms, are impacting providers and students during this period of transition

“Alongside global market shifts in consumer preference and competitor behaviour, as well as global inflationary pressures curbing growth in demand for outbound study as families across the world are more sensitive to prices and cost of living pressures.”

Mr Hill added: “New overseas student commencements for public universities are projected to end this year down by around -18% on last year, wiping around $2 billion over the next three years from university revenues, hurting domestic students, staff and research.”

Along with internal policies, competition, and affordability constraints, Mr Hill also connected falling commencements and financial turmoil for the sector with universities “frankly … not putting forward more students who meet visa requirements.”

This is an interesting assertion given that the government’s frequently changing visa rules, progressively higher visa fees, and vagueness about reasons for visa refusals have created considerable uncertainty and confusion for universities and other providers attempting to recruit genuine students

Mr Hill then referenced “IDP and Navitas data and market feedback [that] make clear that the rate of [visa] refusals is now impacting key markets and actively deterring the very students we most want to come to Australia, as they are terrified of a visa refusal that hurts their chances of studying elsewhere.”

To that we could add that some students are also likely to be terrified of a visa refusal that could cost them AU$2,500 because the application fee is non-refundable

In any case, the government is signalling its willingness to adjust visa processing to encourage more genuine students to apply to study in Australia, provided they have sufficient financial re to consult on reforms to the Genuine Student test and on rules for assessing prospective students’ means

The Consultation Paper says the feedback exercise is “to inform advice as to whether current settings provide sufficiently clear and predictable expectations for applicants and education providers.” Over the past year, many institutions, agents, and international students have gone on the record to say that they do not

Mr Hill emphasised that whatever changes ensue as a result of the consultation, “the Government will not compromise on integrity.” That prefaces the second part of the goal: to strengthen financial requirements to deter students from coming to Australia primarily to remain in the country long term

Here, the mission of strengthening integrity is both necessary and complicated. It is true that past immigration settings fostered a trend of “visa hopping,” and that too many students came to study in Australia with inadequate financial means, banking on the expectation that they could obtain money by working or by transferring to a lower-cost institution. Also reasonable is Mr Hill’s point that:

“[We want] to restore the norm that when you come to Australia for a temporary purpose … you do the thing you’re here for, and then you leave before your visa expires. When Australians visit another country, they don’t believe they have a right to hop from visa to visa for years or decades and game other nations’ appeals and court systems. Neither should guests in our country.”

The tricky part will be how to tune those financial requirements such that they are:

Fairer to genuine students across world regions;
Strong enough that they encourage students to primarily choose Australia to study rather than to work or immigrate;
Strong enough that they protect poorer prospective students who might otherwise apply with insufficient finances based on hope that they could make it up through work.

Balancing those three goals is challenging and would be for any government wanting to both welcome international students and narrow selection criteria to suit the domestic context and economy

The Consultative Paper sets out four financial requirement options for universities to respond to in their submissions. The first three options would require applicants to “hold the relevant funds in an Australian account in their own name. The options differ in the amount required, the length of time the funds must be held, and whether access to the funds would be managed.”

An important component of each of those options is that students would be required to set up an Australian account and deposit funds before applying for a visa that they might or might not be approved for, as shown in the following table from the Consultative Paper

Possible financial requirement models for Australian universities to consider. Source: The Australian government’s “Strengthening the Genuine Student requirement and financial capacity framework” consultation paper.

Along with the AU$2,500 visa application fee, the deposits for tuition and living costs would significantly increase the financial burden of simply applying for a student visa for Australia. In its consultation submission, the Association of Australian Education Representatives in India (AAERI) argues that the first two options are “impractical and should not be pursued,” and goes on to say:

“The requirement to transfer the money to Australia before visa lodgement creates [a] significant financial challenge. The arrangement would require students and their families to commit substantial financial resources well in advance of knowing whether the visa will be granted. This also exposes them to foreign exchange fluctuations, international transaction costs and the potential inconvenience of repatriating funds following a visa refusal.

“A further difficulty is that the 50% requirement is calculated against the full course or course package. For a student undertaking a longer program, the sum may substantially exceed the amount reasonably needed to establish first-year financial capacity.”

The fourth option is to “provide a controlled pathway for recognised education finance arrangements.” This option “could complement the Australian account models or operate as a limited alternative where it is not reasonable or practicable for an applicant to establish or fund an Australian account.”

For more on the government’s proposals for a new Ministerial Direction and strengthened financial requirements – and for submission guidelines – check out the Consultative Paper

For additional background, please see:

“Has Australia’s genuine student test gone too far?”
“Australia: Decline in international higher education commencements projected for 2026”

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