Australian student visa fee hike proposal triggers debate

The Grattan Institute, an Australian public policy think tank, suggested late last month a hike in student visa application charges, raising the fee from AU$750 to AU$2,500 (US$497-1,656), which applicants must pay regardless of whether or not they secure a visa.

According to the institute, since the pandemic, Australia's international student numbers have soared to over 650,000, doubling the figures from 2012 and tripling the ratio of foreign students to locals in Canada and the U.K.

The surge has spiked demand for housing, pushing rent up by about 1% for every 100,000 newcomers due to the scarce supply. While higher rents paid by these students boost national income, as Australians own most of the rented properties, it also widens the wealth gap. Wealthier, older homeowners benefit, whereas younger, poorer renters face increased financial strain, it said.

The Grattan Institute's analysts said the government should raise student visa fees to "discourage students intending to complete cheaper, low-value courses from coming to Australia" rather than apply a levy to international student fee revenues. Raising student visa application fees would raise some AU$1 billion a year, which could fund support for vulnerable renters, according to the institute.

They claim that the visa fee hike would not discourage talented students from choosing to study at one of Australia’s top universities as they "already pay upwards of AU$150,000 for a bachelors' degree."

Abul Rizvi, an Independent Australia columnist and a former Deputy Secretary of the Australian Department of Immigration, said the fee increase could discourage the government from pursuing policies aimed at attracting top-tier students.

Rizvi wrote in an article on the news site that Grattan's claim of a surge in student visa numbers and its impact on rent prices is also questionable, as the current figures are barely above pre-pandemic levels and unlikely to affect suburban rent prices significantly.

Additionally, the potential revenue from increased fees may be overestimated, given that the government is already reducing application numbers through higher refusal rates, he said.

He said raising fees could deter the most talented students, who have other options besides Australia, and this could result in Australia attracting students who are less likely to succeed in their studies or secure skilled employment and permanent residency in the country.

He cemented his argument by saying that the Grattan report itself highlights the folly of such a move when it stated: "Getting the best international students to stay here permanently is even more valuable. International graduates account for one-third of our permanent skilled migrant intake."

The government should avoid the temptation to raise student visa fees as Grattan suggests, according to Rizvi. Instead, it should refine its approach to international education, focusing on attracting the brightest students and encouraging study in fields with long-term skills shortages, he suggested.

Geeta Pillai of BNNBreaking said international students are vital for Australia's economy and campus diversity, but they may be also be deterred by proposed university fee hikes.

With Australia's visa fees already higher than those in the U.S., Canada, and the U.K., this increase could drive prospective students to more affordable destinations, impacting Australia's ability to attract essential skilled talent, she said.

By comparison, the current student visa application fees for the U.S. are US$185, for Canada C$235 (US$174.50) and for the U.K., £490 (US$627).

The Student Accommodation Council in Australia urged the government to rule out taxing international students further, saying that the "short-term thought-bubble" ignores the reality of the nation’s housing supply deficit, The PIE News reported.

"Australia needs to be a magnet for global capital and the best and brightest from around the world," the PIE report quoted Property Council Group executive for policy and advocacy Matthew Kandelaars as saying.

Kandelaars emphasized the importance of providing accommodation over imposing taxes on students. He highlighted that purpose-built student housing, which accommodates nearly 80,000 individuals annually, alleviates the broader residential rental market by decreasing demand and improving affordability.

"Instead of imposing taxes on students who contribute significantly to our community, the government should work with industry to expand the supply of this housing category as a priority," he said.

Meanwhile, federal MP for Bruce and co-chair of the Parliamentary Friends of International Education in Australia, Julian Hill, said during the Australian International Education Conference in Adelaide last October that "it is ridiculous to blame international students for the country's housing crisis."

Australia since late last year has adopted new policies that affect the enrollment of international students, including increase in financial proof and stricter assessment.

Official data of the Australian government showed that the approval rate for student visa applications was consistently above 90% between 2006 and 2022, but dropped to 86% for the 2021-2022 school year and then fell to the record level of 81.5% for 2023-2024.

ICEF Monitor, an international education information site, said in a new report that predictions based on these approval rates suggest that Australia might see about 90,000 fewer student visa holders this school year compared to last school year.

According to the Australian Department of Education, as of last October, the country hosted about 768,000 international students, with the largest groups from China, India, and Nepal.

Vietnam ranks sixth with over 31,000 students studying in Australia.