Do 84 percent of overseas students go home?

Aug 7, 2024
Melbourne, Australia People checking-in on flights in Melbourne airport

Much has been made by the International Education Industry of a 2013-14 Treasury estimate that 84 percent of overseas students go home. Apart from the accuracy of this estimate over ten years after the Knight Review recommendations were implemented, the Industry argues that because a large percentage of students go home, there is no need for the Government to manage student numbers or student policy. This reflects a misunderstanding of the policy problems the Government is trying to address.

Apparently, the 84 percent of students go home is based on the fact that for some period prior to 2013-14, around 16 percent of students were securing permanent residence and hence 84 percent were going home. That is nonsense.

The Industry seems to have assumed the Government thinks students securing permanent residence, particularly on the basis of the skills acquired in Australia, is a poor public policy outcome. On the contrary, that is a good public policy outcome, especially if the students are being sponsored for skilled migration by Australian employers. The key problem is if a large cohort of students get stuck in immigration limbo, unable to secure a skilled visa because they can’t get a skilled job but unwilling to go home.

How accurate is the 84 percent estimate?

Over the past decade, the student contribution to net migration (ie students arriving and staying long-term minus students who stayed long-term departing permanently) has grown significantly other than during covid (see Table 1).

Table 1: Overseas Students

Source: ABS Migration; data.gov/temporaryentrants

Students pre-covid

Following implementation of recommendations of the Knight Review in 2013 (that essentially introduced risk ratings by individual provider – a serious policy mistake), long-term student arrivals steadily increased from 73,270 in 2011-12 to 172,930 in 2018-19.

Over the same period, long-term student departures remained relatively flat, eventually rising to 60,220 in 2018-19. In other words, a falling portion of students were departing after completion of their courses.

That led to a steady rise in the student contribution to net migration from 25,700 in 2011-12 to 112,170 in 2018-19. The student contribution to net migration was closing the gap with the contribution of natural increase to population growth. The stock of students in Australia increased from 344,465 in 2011-12 to 612,865 in 2018-19.

The stock of temporary graduates in Australia increased from 27,977 in 2011-12 to 80,754 in 2018-19.

Students during covid and post-covid

With international borders closed during the Covid pandemic and Prime Minister Scott Morrison telling students to go home, long-term student arrivals virtually stopped while long-term student departures increased to a record 100,300. Net migration of students fell to negative 61,640 and the stock of students fell to 336,844 in March 2022.

But the stock of temporary graduates during the Covid pandemic continued to grow to around 100,000. Many temporary graduates would have secured onshore permanent residence visas during covid but just as many students completed their courses and secured temporary graduate visa (as well as the special covid visa).

With introduction of a range of policies to boost student numbers by the Coalition Government (eg unrestricted work rights, fee free applications) and a super strong labour market, long-term student arrivals boomed after international borders re-opened. These increased to 136,970 in 2021-22 and 279,870 in 2022-23. Long-term student departures predictably remained at very low levels during these two years and have only just started to increase in 2023-24.

The stock of students reached over 700,000 in early 2024. Throughout 2022 and 2023, offshore student applications repeatedly broke new records every month. The Labor Government took a long time to respond to this with a mixture of sensible changes as well as some degree of panic (eg massive increase in refusal rates using subjective criteria).

As a result of policy tightening, the stock of students fell back in the June quarter of 2024. But this will rise again in the September quarter of 2024.

The key is what is happening to temporary graduates as they most closely reflect the number of people potentially in immigration limbo. After continuing to grow during covid, temporary graduate numbers boomed afterwards and currently stand at over 216,000 (and still growing).

If the labour market remains strong and a reasonable portion of temporary graduates have completed high quality courses that Australian employers respect, we should see more of these temporary graduates securing a skilled migration visa, particularly an employer sponsored visa.

The problem will be if a growing number of temporary graduates struggle to secure a skilled job that gives them a pathway to permanent residence. Given ongoing skill shortages in Australia, that is likely to reflect either a lack of confidence amongst Australian employers of the quality of courses undertaken by overseas students or a lack of relevance to the needs of Australian employers.

That is the problem that both the Government and the Industry should be focusing on.

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