Chapter 1Introduction
Purpose of the bill
1.1The Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (bill) seeks to amend the Education Services for Overseas Students Act 2000 (ESOS Act) to address the integrity issues in the international education sector identified in the Rapid Review into the Exploitation of Australia's Visa System (the Nixon Review) and the Review of the Migration System (theMigration Review) as well as in response to feedback from the sector.
1.2In his second reading speech, the Hon Jason Clare MP, Minister for Education (Minister Clare), highlighted the importance of the measures in the bill to strengthen the international education sector, giving education providers certainty and setting up the sector for future success.
Context of the bill
The international education sector
1.3The international education sector is one of Australia's top export revenue earners, with international students contributing $30 billion to the Australian economy per annum. International students are also a significant part of Australia's migration system, being the largest component of the temporary migration program after New Zealand citizens. In his second reading speech, Minster Clare noted that in the last decade, Australia has provided education to more than three million people from across the globe.
1.4International students in Australia study with a range of education providers across higher education, Vocational Education and Training (VET), English Language Intensive Courses for Overseas Students (ELICOS), Foundation Program (tertiary preparatory program) and schools.
1.5As of December 2023, there were 1477 international education providers in Australia, including 67 public providers, of which 42 operated in the higher education sector. The number of international student enrolments in Australia, as at May year–to–date, has more than tripled since 2005, growing from 260 000 enrolments in 2005 to 810 000 in 2024. The growth in enrolments has been driven largely by the higher education and VET sectors.
1.6During the COVID-19 pandemic, the number of international student enrolments dropped significantly, with enrolment numbers not expected to return to pre-pandemic levels until the end of 2025. However, in his second reading speech, Minister Clare noted that enrolment numbers had already returned to pre-pandemic levels.
1.7In a joint media release on 27 August 2024, Minister Clare, the Hon Tony Burke MP, Minister for Home Affairs (Minister Burke), and Senator the Hon Murray Watt, Acting Minister for Skills and Training (Minister Watt) announced that subject to the passing of this bill, the government will set a National Planning Level for international student commencements for the 2025 calendar year of 270 000 across the higher education and VET sector. This will be divided into 145 000 for publicly funded universities, 30 000 for other universities and for non–university higher education providers, and 95 000 for the VET sector.
1.8The Migration Review, the Nixon Review and the Joint Standing Committee on Foreign Affairs and Trade's inquiry into Australia's tourism and international education sectors, have found that the return of international students has seen a re-emergence of collusive and unscrupulous practices between education providers, their agents and non–genuine students who are exploiting weaknesses in the international education regulatory framework.
The Education Services for Overseas Students Framework
1.9The Australian Government (the government) regulates the international education sector through the ESOS Act and its associated instruments, which together constitute the ESOS Framework. The ESOS Framework safeguards and enhances Australia's reputation for quality education, provides tuition protection and supports the integrity of the student visa program.
1.10Under the ESOS Act, it is a requirement for all education providers to be registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) if they deliver education to students in Australia on a student visa.
1.11The ESOS Framework also supports the integrity of the student visa system by ensuring that education providers collect and report information relating to student visas.
ESOS agencies
1.12The agencies responsible for regulating the international education sector are referred to as ESOS agencies and are accountable to the Minister for Education. A provider's ESOS agency depends on which sector they are from:
the Tertiary Education Quality and Standards Agency (TEQSA) regulates the higher education sector and manages higher education providers;
the Australian Skills Quality Authority (ASQA) is the national VET regulator, and manages VET and standalone ELICOS providers; and
the Department of Education manages schools.
Education agents
1.13Education agents provide advice and assistance to international students to choose between potential countries, institutions and courses when they are looking to pursue education overseas. While it is not a requirement for international students to utilise an education agent in Australia, most international students choose to use one. Indeed, the 2022 Quality Indicators for Learning and Teaching (QILT) survey found that 86 per cent of international students reported using an education agent to help with their visa application or enrolment in an Australian education provider.
1.14While ESOS agencies regulate the international education sector, they do not directly regulate education agents. Instead, ESOS agencies monitor education providers to ensure compliance with the ESOS Framework. Under Standard 4 of the National Code of Practice for Providers of Education and Training to Overseas Students 2018, registered providers must ensure that their education agents act 'ethically, honestly and in the best interest of overseas students'. Providers are also required to take action where an agent has not complied with their responsibilities.
1.15Education providers also have other responsibilities in relation to their relationship with education agents, including:
having a written agreement with each education agent;
not accepting students where it suspects the education agent of engaging in dishonest recruitment practices; and
taking immediate corrective action where it believes or becomes aware of an education agent that has not complied with their responsibilities under relevant ESOS and migration legislation.
Rapid Review into the Exploitation of Australia's Visa System
1.16In January 2023, the Hon Clare O'Neil MP, Minister for Home Affairs (Minister O'Neil) appointed former Chief Commissioner of Victoria Police, Ms Christine Nixon AO APM, to undertake a Rapid Review into the Exploitation of Australia's Visa System. Ms Nixon consulted with Commonwealth, state and territory governments and agencies and presented a final report on 31 March 2023. The report made 34 recommendations, including seven relating to the international education sector.
1.17The bill seeks to address the issues identified in the Nixon Review by specifically responding to Recommendation 13 of the final report, which relates to regulating onshore and offshore education agents. According to the Explanatory Memorandum (EM), these measures would increase data sharing activities about education agents and education agent commissions, as well as impose further measures to deter collusive and unscrupulous practices between education providers and education agents.
Review of the Migration System and the Migration Strategy
1.18On 2 September 2022, Minister O'Neil appointed Dr Martin Parkinson AC PSM, Professor Joanna Howe, and Mr John Azarias to lead a comprehensive review of Australia's migration system (the Parkinson Review). The Parkinson Review received 482 written submissions and in February 2023, the reviewers conducted targeted round table consultations with stakeholders from governments, unions, industry, business, academia, migrant communities and like-minded international partners. The final report was presented to the government on 21 March 2023.
1.19While primarily focused on visa settings, the report touched on concerns relevant to the international education sector, including that:
The migration system creates incentives for non-genuine students and unscrupulous profit-seeking education providers; and
Some institutions have a profit motive to enrol greater volumes of international students at the expense of quality applicants or learning outcomes. At its worst this includes institutions who use the system to sell student visas as a way of accessing Australia's labour market.
1.20Following the release of the Parkinson Review, the government released its Migration Strategy: Getting migration working for the nation. For Workers. For Businesses. For all Australians (Migration Strategy) in December 2023. TheMigration Strategy noted that the government had already begun delivering measures to support the integrity of the international education sector, including:
strengthening the fit and proper tests that apply to VET providers in the ESOS Act; and
committing to making education providers more accountable for their agents by increasing provider reporting requirements.
1.21The bill seeks to further strengthen the measures in the Migration Strategy to increase the integrity and quality of the international education sector.
Ministerial Direction 107
1.22In December 2023, subsequent to the release of the Migration Strategy, the Department of Home Affairs implemented risk–based visa processing of Student Guardian and Subclass 500 (Student) visa applications under Ministerial Direction 107 – Order for considering and disposing of Student Guardian visa applications and offshore Subclass 500 (Student) visa applications (Ministerial Direction 107). Ministerial Direction 107 specifies the order of priorities for considering and disposing of Student Guardian and offshore Subclass 500 (Student) visa applications which takes into account the government's policy intentions concerning the size and composition of Net Overseas Migration (NOM).
1.23Under Ministerial Direction 107, visas are prioritised according to provider level risk, as assessed by their evidence level (EL) under the Simplified Student Visa Framework (SSVF). Ministerial Direction 107 states that:
An Evidence Level 1 (EL1) rated institution benefits from having the most streamlined evidence requirements. For the purpose of processing offshore Subclass 500 (Student) visa applications, SSVF Evidence Levels and this Direction are intended to work together, with this Direction setting out the overall priorities for the processing of offshore Subclass 500 (Student) visa applications and Student Guardian visa applications, and the SSVF specifying a risk based approach to evidence requirements for Subclass 500 (Student) visa applications.
1.24Since the implementation of Ministerial Direction 107, visa grants for the higher education and VET sector have decreased, meaning fewer international students studying in Australia. In a joint media release, Minister Clare, Minister Burke, and Minister Watt announced that subject to the passage of this bill, Ministerial Direction 107 will be replaced with the bill's 'new system of managed growth and enhanced integrity measures'.
Joint Standing Committee on Foreign Affairs, Defence and Trade
1.25On 11 October 2022, Senator the Hon Don Farrell, the Minister for Trade, requested the Joint Standing Committee on Foreign Affairs, Defence and Trade, through its Trade Subcommittee, to conduct an inquiry into Australia's tourism and international education sectors.
1.26On 19 October 2023, the Trade Subcommittee tabled its interim report, titled Quality and Integrity – the Quest for Sustainable Growth: Interim Report into International Education. The report identified several quality and integrity issues in the international education sector and made several recommendations relevant to the bill. As noted by Minister Clare in his second reading speech, the measures in the bill have been informed by the findings of the interim report.
Draft International Education and Skills Strategic Framework
1.27On 11 May 2024, the government released its Draft International Education and Skills Strategic Framework (Draft Framework). The government has indicted that it will consult with the international education sector on all aspects of the draft with a final framework to be released towards the end of 2024.
1.28In a joint media release with Minister O'Neil and the Hon Brendan O'Connor MP, Minister for Skills and Training, Minister Clare noted that:
The draft International Education and Skills Strategic Framework will lay the groundwork for an international education sector that is more sustainable and provides the highest quality education and student experience for all students.
1.29The Draft Framework highlights some of the proposed amendments to the ESOSAct that are contained in the bill.
Key provisions of the bill
1.30The following section provides a summary of the key aspects of the bill, including the proposed measures relating to new ministerial powers to intervene in the international education sector and enhanced regulation to address unscrupulous behaviour and practices affecting the sector.
New ministerial powers
1.31Parts 3, 7 and 8 of the bill would amend the ESOS Act to include new ministerial powers to intervene in the international education sector, through the management of provider applications, setting enrolment limits and suspending and cancelling specified courses.
Management of provider applications
1.32Part 3 of Schedule 1 of the bill relates to the management of provider applications. The proposed provisions in Part 3 of the bill would enable the minister by legislative instrument to suspend ESOS agencies from processing applications for registration or adding new courses to registration.
1.33The bill would give the Minister powers to make determinations—via legislative instrument and with the agreement of the minister responsible for administering the National Vocational Education and Training Regulator Act 2011 (NVETR Act)—to specify up to a 12-month period where ESOS agencies are not required to, or must not, accept or process initial applications from new providers and for the registration of new courses by registered providers.
1.34Additionally, these legislative instruments would not be subject to disallowance to prevent uncertainty for ESOS agencies and providers. However, it is intended that the minister would only use this power in very limited circumstances when there are concerns relating to integrity and sustainability of the international education sector.
Enrolment limits
1.35Part 7 of Schedule 1 of the bill would amend the ESOS Act to enable the minister to make a legislative instrument specifying the total and course enrolment limits on the number of international students that may be enrolled. These limits could be imposed on a provider, or class of providers, and a course, or class of courses at a provider, over specified years. The minister would be able to set enrolment limits for a provider or set course enrolment limits either by legislative instrument or by written notice.
1.36In setting enrolment limits for VET providers, the minister would need to obtain agreement from the minister responsible for administering the NVETR Act.
1.37When setting total enrolment limits for a provider or class of providers, the minister would be able to specify a class of provider by reference to any matter, including, but not limited to, any of the following:
the kind of provider;
the kind of courses provided by the provider;
the location of courses provided by the provider; and
other circumstances applying in relation to the provider.
1.38Under the proposed changes, the minister may via legislative instrument:
set different limits according to classes of providers and/or years; and
exempt certain courses that may be specified by reference to any matter, including the location of a course, from counting towards a registered providers total enrolment limit.
1.39Whilst the minister has the option of enforcing enrolment limits by either legislative instrument or written notice, the minister could only exercise the written notice option under specific circumstances:
The Minister will only exercise this power where the Minister is satisfied that there is a need for a specific provider to have a different limit than the course enrolment limit that is specified in the instrument under subsection 26E(1). Factors that the Minister may consider include the location of the provider and/or course location, the number of other providers servicing the geographical location of the provider and the availability of student accommodation. The Minister may also give a notice to a provider under subsection 26C(1) if satisfied that the provider has demonstrated that they have developed, or otherwise made available, additional student accommodation to cater for an increase in student enrolments.
1.40The consideration given to the location of a provider reflects the different circumstances of major metropolitan universities and regional universities in respect of international student numbers.
1.41According to the EM, the bill is designed to give the minister flexibility in how they impose total enrolment limits. The EM notes that this flexibility is necessary so that the minister can appropriately respond to Australia's migration needs and for sustainable management of the international education sector.
Transitional arrangements
1.42To minimise the impact of enrolment limits on providers, the bill contains application and transitional provisions. For 2025, the minister would only be able to set limits in relation to the total number of new international student enrolments, thereby preventing the ability to set limits in relation to a combination of new and ongoing enrolments for a given year.
1.43When setting limits in relation to new and ongoing enrolments for 2026 and subsequent years, only students who were enrolled with the same provider as new overseas students for 2025 or later, would be able to be counted towards the combined number.
1.44Once total and/or course enrolment limits have been set by the minister, providers would have an obligation to ensure that they do not exceed these limits otherwise penalties would apply. If a provider exceeds their total enrolment limit, they will have their registration suspended for all courses, except those originally exempt from the limit. If a provider exceeds their course enrolment limit, the registration of that course would be suspended.
Review of the operations of Part 7
1.45On 13 August 2024, the House of Representatives agreed to an amendment to the bill as moved by Dr Monique Ryan MP. This amendment inserted a new Clause into the bill in relation to Part 7. This Clause requires the minister to cause a review to be undertaken by an independent expert of the operation of the amendments made by Part 7 of the bill. The review must be conducted in the first six months of 2026, and it must consider:
The impact on providers of the enrolment limits resulting from the amendments; and
The impact of those enrolment limits on net overseas migration to Australia and housing availability; and
The impact of those enrolment limits on the quality of education offered to international and local students.
1.46The independent expert must provide the minister with a written report of the review within six months of commencing the review, which the minister must table in both the House of Representatives and the Senate within 15 sitting days after the report is received.
Automatic cancellation of specified courses
1.47Part 8 of Schedule 1 of the bill amends the ESOS Act to give the minister the power to suspend and cancel one or more classes of courses. The minister would by legislative instrument be able to specify courses for suspension and cancellation if satisfied that:
there are or have been systemic issues in relation to the standard of delivery of the courses included in the class; or
the courses included in the class provide limited value to Australia's current, emerging and future skills and training needs and priorities; or
it is in the public interest to do so.
1.48Once the minister makes the legislative instrument, a course would receive automatic suspension if, 30 days after the instrument commences, one or more students are enrolled in, and have commenced the course. A provider with a course that is suspended must not recruit, enrol, or accept money from an international student for that course (other than the students already enrolled). If no students are enrolled in and have commenced the course 30 days after the instrument commences, the course is automatically cancelled.
Increased regulation
1.49Parts 1, 2, 4, 5 and 6 of the bill address integrity concerns raised in the Nixon Review, the Migration Review, Migration Strategy, and the interim report from Joint Standing Committee on Foreign Affairs, Defence and Trade.
Education agents
1.50Part 1 of Schedule 1 of the bill would amend the ESOS Act to update the definitions of 'education agent' and 'education agent commission'. Theproposed new definition of an education agent would be based on activity rather than the relationship to a provider, as many agents do not have formal agreements or relationships with specific providers.
1.51The activities that the proposed definition would be based on are recruiting, providing information, advice or assistance and otherwise dealing with international students. However, any permanent employees of a provider are excluded from the proposed definition.
1.52The proposed definition of 'education agent commission' would relate to any consideration or benefit, whether non-monetary or monetary, in connection with the activities conducted by an education agent.
1.53Defining 'education agent commission' in the ESOS Act would enable the minister to make complementary amendments to the National Code of Practice for Providers of Education and Training to Overseas Students 2018 to ban commissions from being paid by providers to education agents for onshore student transfers.
1.54Part 1 of the bill would also insert new consideration requirements for ESOS agencies when determining whether a provider is fit and proper. The bill would require ESOS agencies to consider whether:
a provider controls or owns an education agent, and their activities; and
an education agent, or an associate of the education agent, has any ownership or control of a provider.
1.55Part 2 of the bill would improve the transparency of education agents and their activities by allowing the Secretary or relevant ESOS agency to provide more extensive information to providers about education agents. The intention of these provisions is to assist providers to make better decisions about which agents to engage.
1.56The information that could be provided may relate to the number of provider-to-provider transfers or course–to–course transfers of accepted students, or to education agent commissions in connection with the recruitment of accepted students.
Provider registration requirements
1.57Parts 4, 5 and 6 of the bill relate to the proposed new requirements that prospective providers would need to meet to become a registered provider of education to international students.
1.58Part 4 of the bill would require providers to deliver one or more courses exclusively to domestic students for consecutive study periods totalling two years to be eligible to apply for registration under the ESOS Act. The course, or courses, could be delivered at multiple locations and normal study breaks that would occur during the consecutive years would count towards the two–year requirement.
1.59This provision would also provide exemptions to providers who only provide ELICOS or a Foundation Program (whose programs cannot be delivered to domestic students), and to Table A providers, who meet the eligibility criteria of the Tertiary Education Quality and Standards Agency Act 2011 to self–accredit courses.
1.60Part 5 of the bill would insert a new provision specifying that a provider's registration would be automatically cancelled if they had not provided a course at a location to an international student in a consecutive 12–month period (classified as the measurement period) on or after 1January 2024. Approved school education providers would be exempt from this new provision due to their smaller intake of international students, which means they may not enrol an international student every year.
1.61A provider would be able to apply for an extension to the measurement period from their ESOS agency, but it would need to be made at least 90 days before the measurement period was set to end. While an ESOS agency would be able to grant an extension more than once, the total period of all extensions granted must not exceed 12 months.
1.62Part 6 of the bill would introduce a new requirement for determining whether a provider is fit and proper. Under this provision, ESOS agencies and designated state authorities would need to consider whether a provider is under investigation for any offences under:
the ESOS Act;
Division 270 or 271 of the Criminal Code Act 1995; or
section 590 of the Corporations Act 2001.
1.63The minister would also be able to specify additional offences for consideration by way of a legislative instrument.
1.64The provision would apply to new applications, existing applications, and already registered providers, regardless of when the conduct constituting the offence that is under investigation happened.
Financial implications
1.65According to the EM, the measures relating to Parts 1 and 2 of the bill are estimated to have an impact of $3.8 million in 2023–24, with Parts 3 to 6 and 8 estimated to have an impact of $1.2 million in 2023–24, and Part 7 estimated to have an impact of $2.9 million in 2023–24.
Consideration by other parliamentary committees
1.66When examining a bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (ScrutinyCommittee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
1.67The Scrutiny Committee considered the bill in its Scrutiny Digest 7 of 2024. Ministerial responses were sought but had not been published at the time of writing.
1.68The Human Rights Committee had yet to consider the bill at the time of writing.
Conduct of the committee's inquiry
1.69The committee advertised the inquiry on its website and invited submissions by 13 June 2024. The committee subsequently set a new submission deadline of 1July 2024.
1.70The committee has accepted and published 196 submissions, which are listed at Appendix 1. Thepublic submissions are available on the committee's website, along with additional information and answers to questions taken on notice.
1.71The committee held four public hearings in total with two in Canberra on 6 August 2024 and 2 October 2024 and two in Sydney on 26 August 2024 and 6 September 2024. A list of witnesses who appeared at the hearings is available at Appendix 2.
1.72The evidence from the committee’s hearing on 2 October 2024 could not be fully incorporated in Chapter 2 of the committee’s report before the reporting date, however the Hansard of the hearing is attached at Appendix 3 to assist readers.
1.73The committee thanks those individuals and organisations who contributed to the committee's inquiry by preparing written submissions and giving evidence at the public hearings.