In recent years, Australia's higher education sector has become a magnet for international students, bringing in billions in revenue and enriching campuses with diverse perspectives. However, a disturbing trend has emerged: nearly 15,000 international undergraduates dropped out of Australian universities within their first year in 2023 alone, representing a national first-year attrition rate of 17.4%—nearly double the 9.7% seen in 2018. This surge points to systematic exploitation of the student visa system, often dubbed a 'visa rort,' where enrollment serves as a gateway to work rights rather than genuine study.

The Menzies Research Centre's report highlights how non-genuine students target lower-cost or regional universities, enroll onshore for easier visa approval, and then abandon courses to access bridging visas with unrestricted work hours. This backdoor immigration pathway distorts migration statistics, strains housing, and undermines university integrity.

The Alarming Rise in Dropout Rates

International student attrition has skyrocketed post-pandemic. Department of Education data shows the overall rate for commencing international undergraduates climbed from 12.6% in 2022 to an all-time high of 17.4% in 2023, equating to 14,873 dropouts across 38 public universities. At elite institutions like the University of Melbourne or Sydney, rates remain low (around 4%), but regional and outer-metropolitan unis bear the brunt.

Financial pressures play a role—tuition, living costs, and wages lure students to full-time work—but the pattern suggests deliberate gaming. Bridging visa applications for new student visas exploded from 13,000 in 2023 to over 107,000 in 2025, many tied to course switches.

Universities Hit Hardest: A Breakdown

Eleven public universities saw over 30% first-year dropout rates in 2023, with CQUniversity leading at 57.2% (616 dropouts), followed by the University of New England (45.5%), Flinders University (44.3%), and others like Federation University (36.1%) and Charles Darwin University (36.5%). Twenty-three unis lost 20% or more of their commencing cohort.

• CQUniversity: 57.2% attrition, up from 33.7% in 2018.
• Flinders University: 44.3%.
• University of New England: 45.5%.
• Australian Catholic University: 34.4% (878 dropouts).
• La Trobe University: 33.5% (712 dropouts).

These institutions often operate low-fee capital-city campuses, attracting high-risk intakes via aggressive agent recruitment.

Source: Department of Education data via Menzies Research Centre.

How the Visa Rort Operates: Step-by-Step

The scheme exploits visa processing loopholes:

1. Offshore Enrollment: Apply for high-credibility public uni student visa (Subclass 500), often via agents promising easy onshore approval.
2. Onshore Commencement: Arrive, pay first semester fees ($10k-$20k), attend minimally.
3. Dropout & Bridging Visa: Withdraw, get Bridging Visa A (010) with unlimited work rights during new visa processing (197 days median).
4. Course Hop to VET: Enroll cheap VET (e.g., cookery), apply new Subclass 500. Appeal refusals to Administrative Review Tribunal (64 weeks more work rights).
5. Repeat or Asylum: Accumulate qualifications for post-study work visa (up to 4 years). If denied, seek protection visa (low success, but extends stay).

Cost: Under $20k for 4-5 years work access. Agents earn commissions; unis get upfront revenue.

Universities' Role and Financial Incentives

Universities rely on intl fees: $15.3b in 2023, 24.3% of undergrad credit-hours. Regional unis expand via city campuses (e.g., CQUni Sydney), recruiting via agents despite high-risk profiles. Upfront payments cushion revenue loss from dropouts.

Nico Louw (MRC): "Universities expose foreign student phantoms and course-hoppers." Critics argue lax oversight prioritizes dollars over duty of care.

Link to higher ed jobs amid sector pressures.

Genuine Students Caught in the Crossfire

Exploitation harms real students: inflated housing costs, crowded classes, diluted reputation. Many dropouts face debt, deportation risks, exploitation by dodgy agents/VET providers. Top nationalities: India, China, Nepal, Vietnam.

Govt data: Onshore intl students rose 17.7% to 481,851 in 2024.

Government Crackdown: Caps and Reforms

Response: 2025 cap 270k commencements, easing to 295k in 2026. Visa refusals >25%, agent commission ban for transfers (Jan 2026), higher 'genuineness' tests. Home Affairs: Bridging visa surges signal abuse.

Future: Risk-based caps, provider risk ratings. Unis push back on revenue hits.

Economic and Social Ripples

Intl ed: $48b export. But rorts mask net migration (inflated by 100k+), exacerbate housing crisis. Unis face $500m+ revenue shortfalls, job cuts.

Solutions: Tighter onshore visa rules, agent audits, uni accountability for recruitment.

Stakeholder Perspectives and Case Studies

CQUni: High Sydney campus attrition, defended as 'pathway provider'. Agents: Offshore cartels coach hopping.

Experts: Universities Australia calls for balanced reform; migration lobby warns overreach.

Photo by Eriksson Luo on Unsplash

Path Forward: Protecting Genuine Education

Strengthen Genuine Student (GS) test, limit course changes, fund student support. Genuine students: Research providers, avoid high-risk paths. Explore higher ed career advice.

Outlook: Reforms stabilize sector, prioritize quality over quantity. Australia remains top destination for committed scholars.

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