The International Student Scam in Australia: An Even Closer Look, By James Reed and Paul Walker

Australia's international education sector, often hailed as a supposed $51 billion export industry, is under scrutiny for its darker underbelly: a system that critics argue exploits vulnerable students, inflates economic benefits, and fuels a shadow economy of visa rorts and financial hardship. This post explores the so-called international student scam, detailing its mechanisms, impacts, and the systemic issues that perpetuate it, drawing on insights from recent analyses from the mighty Macrobusiness.com.au and public sentiment.

The Australian Bureau of Statistics (ABS) reported that education exports reached $51 billion in 2023-24, making it supposedly one of Australia's largest industries, surpassed only by commodities like iron ore and coal. This figure, derived from Tourism Research Australia's average spend estimates and total course fee expenditures, paints international students as economic powerhouses who bring foreign capital into the country. However, this narrative is misleading. The ABS classifies all international student spending, tuition, rent, and living costs, as exports, even when funded by wages earned within Australia. This accounting sleight-of-hand lie inflates the sector's economic value, ignoring the reality that many students are not wealthy foreigners but rather "working poor" who rely on local jobs to survive. This shows that we cannot mechanically trust the ABS, who have shown here a political bias to mass immigration over objective statistics. I detail why now, giving the other side of the story, from the perspective of the international students, making things even more damning to the present scam system.

In 2023, Australia saw a record net remittance outflow of $US8.6 billion, with international students contributing significantly to this figure by sending earnings back to their home countries. Far from injecting foreign capital, many students work low-wage, often exploitative jobs in sectors like hospitality, retail, or cleaning to cover tuition and living expenses. This challenges the idea of education as a pure export and highlights a system where students are both contributors to and victims of a precarious economic model.

Financial Hardship and Exploitation

International students, particularly from developing nations like India, Nepal, and Bangladesh, face acute financial pressures in Australia. High tuition fees, often three to four times those of domestic students, combined with soaring living costs and a rental crisis, push many into poverty. A 2024 report by The Sydney Morning Herald noted a 60% surge in demand for the University of Sydney's FoodHub, a student-run food welfare service, with 93% of its 57,000 users in 2024 being international students. Queues for free food and essentials stretch out the door, underscoring the scale of food insecurity.

The cost-of-living crisis exacerbates these struggles. Over a third of international students cannot afford fresh produce, relying on charities like Foodbank Australia, which has partnered with Allianz Partners to address this "hidden face of homelessness" among students. Erin Longbottom, a nurse unit manager at St Vincent's Hospital's homeless health service, reported that international students are increasingly visible in homeless populations, a trend often overlooked due to assumptions that they are wealthy. Sean Stimson from Redfern Legal Centre's International Student Legal Service highlighted a spike in homelessness over the past 18 months, driven by steep rent hikes. Disturbingly, some students, unable to meet rent increases, have been coerced into "sexual favours" by landlords, revealing a grim dimension of exploitation.

Surveys paint a stark picture: a high proportion of international students skip meals to pay rent, worry weekly about housing costs, and share bedrooms with non-partners to cut expenses. These conditions contradict the notion of a lucrative export industry, instead depicting a system where students are trapped in a cycle of poverty and dependence on charity.

The Visa Rort and "Ghost Colleges"

At the heart of the international student scam is a visa system exploited by unscrupulous operators. Critics argue that international education has become a backdoor for immigration, with students enrolling in low-cost, low-quality vocational colleges, often dubbed "ghost colleges," to secure work rights rather than pursue genuine education. These institutions, which offer minimal academic rigour, serve as visa mills, allowing students to work in Australia under the guise of studying. In 2023, the Australian government identified 17,000 concurrent enrolments, where students held multiple Confirmations of Enrolment (COEs) to "course hop" from reputable programs to cheaper colleges, prioritising work over study.

Social media platforms like YouTube and TikTok are rife with tutorials from international students on exploiting the system, such as accessing free food from charities. Indian students, in particular, have admitted to using ghost colleges to work until they secure residency, a practice described as "immigration by stealth." This is facilitated by lax visa regulations, which previously allowed unlimited work hours for student visa holders, encouraging enrolment in dubious courses for access to Australia's labour market. While the government has since tightened rules, such as limiting concurrent enrolments, the system remains vulnerable to abuse.

Scams Targeting Vulnerable Students

International students are prime targets for scams, further compounding their financial woes. Common frauds include:

Tuition Fee Scams: Fraudsters pose as university agents, offering discounted tuition fees. Students pay third parties, often with stolen credit cards, only to find payments reversed, leaving them with university debts. A 2015 case reported by The Age detailed a Monash University student, Luke Zhang, who lost $35,127 to such a scam, forcing him to survive on one meal a day.

Rental Scams: Students desperate for housing are tricked into paying for non-existent accommodations. A Nepalese student in Perth, for instance, arrived to find his pre-booked lodging was a scam, leaving him homeless.

Job and Money Mule Scams: Scammers offer "easy money" for transferring funds through students' bank accounts, a form of money laundering that can lead to criminal records. Others promise jobs requiring upfront payments or personal details, which are then used for identity theft.

These scams exploit students' financial desperation and unfamiliarity with Australian systems, particularly those with limited English proficiency or local support networks.

The international student crisis stems from deliberate policy choices. Universities, facing reduced government funding, rely heavily on international tuition fees, which account for up to 17% of their income or more. In Australia, this dependency has led to lowered academic standards and the proliferation of low-quality providers to maximise revenue. The government's failure to invest in student housing exacerbates the rental crisis, with vacancy rates in cities like Perth dropping to 0.5% and rents rising 12% annually. International students, ineligible for most welfare, face these pressures without a safety net, unlike domestic students who may access Youth Allowance or HECS loans.

Critics like Abul Rizvi, a former immigration official, argue that the sector prioritises revenue over academic integrity, with universities admitting students who struggle with basic English to boost fees. This is compounded by policies linking study to permanent residency, incentivising enrolment for migration rather than education. The result is a system that treats students as "cash cows," charging exorbitant fees while offering little support.

Public sentiment, as reflected on X, is increasingly critical. Users describe the international student industry as a "scam" that drives up rents, suppresses wages, and burdens local resources. The economic argument is contentious: while universities and the government tout education as a major export, critics like Leith van Onselen argue it's a net loss when factoring in remittances, charity reliance, and competition for low-wage jobs. The $51 billion figure is seen as a myth, with much of the spending derived from local earnings rather than foreign capital.

The international student scam in Australia is not just about fraudulent operators but a systemic failure that exploits vulnerable students while overstating economic benefits. To address this:

Raise Entry Standards: Implement minimum academic and English proficiency requirements to ensure genuine students are admitted.

Increase Housing Investment: Universities and governments must provide affordable on-campus accommodation to alleviate rental pressures.

Strengthen Visa Oversight: Crack down on ghost colleges and limit work rights to prioritise study over immigration rorts.

Enhance Support Systems: Offer financial aid and scam awareness programs tailored to international students' needs.

Give priority to local students, with the international students being no more than 5 percent of the student population.

Reform totally the higher education sector along lines detailed in past blog pieces, eliminating all anti-nationalist and Leftist disciplines, with priority to STEM and nation building.

Until these reforms are implemented, the international education sector risks remaining a predatory system that profits at the expense of students' well-being and Australia's social fabric.

https://www.macrobusiness.com.au/2025/06/international-students-driven-into-financial-despair/

International students driven into financial despair

The Australian Bureau of Statistics (ABS) valued education exports at $51 billion in 2023-24, suggesting a massive benefit to the Australian economy.

The ABS estimates this astonishing export figure using "an average spend estimate from Tourism Research Australia … supplemented by the addition of total expenditure on course fees".

The ABS incorrectly classifies all international student spending as exports, even if it is paid for with money earned in Australia.

According to World Bank data on migrant remittances, Australia's net remittance outflows were $US8.6 billion in 2023. Students would account for a considerable portion of the remittances leaving Australia.

In reality, international students cover a significant percentage of their tuition fees and living costs by working in Australia.

In recent years, there have been numerous stories of 'desperate' international students using food banks.

For example, The SMH reported that "demand for the University of Sydney's student-run food welfare service, FoodHub, which offers free food and essential items such as toiletries, rose 60% in the past year, with international students making up 93% of the 57,000 students who used the service in 2024".

Queues for Sydney University's food bank stretch outside the door. Almost all were international students.

Allianz Partners has also partnered with Foodbank Australia "to help alleviate the burden of financial hardship and food insecurity among international students studying in Australia".

"The current cost of living crisis has meant that more than a third of international students in Australia can't afford fresh fruit and veggies in their weekly shop", the media release read.

"The rising cost of living has led international students to rely on charitable organisations to meet their most basic needs, emphasising the need for further support", Miranda Fennell, Executive Head of Health and International Student Wellbeing Spokesperson, said.

A report in The SMH revealed how large numbers of international students are living in poverty and homelessness.

Nurse unit manager at St Vincent's Hospital's homeless health service Erin Longbottom said international students were becoming the hidden face of homelessness.

"No one is talking about it," she said…

Sean Stimson, a senior solicitor at the Redfern Legal Centre's International Student Legal Service, said there had been a spike in homelessness over the past 18 months as international students faced steep rent hikes…

"We're aware of students who are clients of ours who can't meet the increase in rent and are asked to participate in sexual favours", he said.

The article features an interactive graphic showing the degree by which international students are struggling.

A high proportion of students surveyed often go without necessities like food so they can pay for accommodation:

A high share of international students worry about paying rent each week.

A significant share of international students share their bedrooms with someone that isn't their partner.

How can we claim that international education is a giant $51 billion export industry when so many are the working poor, often rely on charities, and must work jobs in Australia to pay their bills?

When international students become a drain on charitable services, it shows that their economic value to Australia has been significantly overstated."