Revoking Ministerial Direction 107 won’t be a silver bullet…

As a former public servant and former regulator I have been baffled in recent months by the insistence from university leaders that Ministerial Direction 107 (MD107) must be revoked, in the belief that it is responsible for the decline in international students this year outside of the Group of Eight universities.

The reason for my bafflement is that MD107 is focussed solely on the priority given to processing student visa applications.

In a nutshell it authorises faster processing of applications from students wanting to study at low immigration-risk education providers.

In doing so it draws on existing policy – the Simplified Student Visa Framework:

So revoking MD107 will not alter existing government policy (the SSVF) which rates providers and students based on their perceived immigration risk. MD107 also does not set the criteria that officials must use in determining whether or not to approve a student visa application.

MD107 was introduced in December 2023 (shortly after the release of the Migration Strategy) to deal with a visa processing workload issue within the Department of Home Affairs. Put simply there were not enough immigration officials to process student visa applications in a timely manner, and this was intended as a way of giving a higher priority to applications for study at low immigration-risk institutions.

Subsequently, in March 2024, Ministerial Direction 106 was introduced. It reflects the intention of the Migration Strategy whereby the Genuine Temporary Entrant test for student visa applicants was replaced with a new Genuine Student test.

It is MD106 that requires officials to determine “whether an applicant satisfies the genuine student criterion… for Subclass 500 (student) visa applications.”

These are the factors from MD106 that officials must consider in deciding whether or not to grant a student visa:

I had thought when the Genuine Student test was introduced that it would be VET providers who would be the most impacted. I (wrongly) assumed that the value of an Australian degree in terms of graduates’ future careers in almost any country in the world (better pay, better jobs, more opportunities for promotion) would be understood by Immigration officials.

I have not seen the visa rejection letters issued to prospective university students but it would appear that the way the new Genuine Student test is being interpreted is a key factor behind the high rates of visa refusals for students from higher immigration-risk countries. These are typically countries with a smaller middle class and thus their families are typically less able to afford the cost of degrees at the most highly ranked Australian universities – and hence these students have higher rates of applications for institutions which have higher immigration-risk ratings.

And then of course on top of that there are also issues for institutions with a higher immigration-risk – their student visa applications are processed less quickly.

Evidence given in the recent Senate Committee hearings into the changes to the ESOS Act shows that:

Low immigration-risk (evidence level/assessment level 1) institutions like Holmes Institute have experienced higher rates of visa application rejections this year (even though their visa applications are being processed promptly)

Evidence level/assessment level 2 institutions like Charles Sturt University
have experienced significant delays in visa processing and
higher rates of visa application rejections this year

If MD107 is revoked and no new visa processing officials are hired by the Department of Home Affairs, then we can expect to see visa applications to study with low immigration-risk providers will be slowed down and there may be some improved timeliness in the processing of visas to study with other providers, but it will not change decision making on approving or rejecting student visa applications. Those powers sit in MD106.

So why did providers experience an increase in student visa application rejections in late 2023 around the time MD107 was enacted and before MD106 was introduced?

In fact we first started to see anomalous visa rejections emerge in late November before either MD was introduced – providers and agents shared visa rejection letters for students with the kind of characteristics and background who would ordinarily have had their visa application approved.

I would suggest it could be a case of well-intentioned officials using the powers they then had (the Genuine Temporary Entrant test) but knowing where government policy was headed – to start to change their thinking about what evidence was and was not acceptable in a visa application for students from higher immigration risk countries.

What it was not was officials following the directions in MD107 to reject more visa applications – because all MD107 tells them is which order to process visa applications in.

The sector needs to be looking much more closely at MD106 and how it is being interpreted. Otherwise we are likely to see institutions accepting international student caps in return for slightly faster visa processing but with ongoing high rates of visa rejections for students from higher immigration risk countries…