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27 September 2006
Australia and New Zealand are the current world leaders in reforming their university programs from subsidizing foreign students to recruiting students who pay full fees. This is generating a surplus in the trade of educational services.
Australia has used a points test to select skilled migrants since 1979. Beginning in the late 1990s, the government made it easier for foreign students to apply for immigrant visas while still in Australia after graduation. Research showed that foreign student graduates, especially in engineering and accounting, did better in the Australian labour markets than foreigners selected under the point system offshore.
By 2004-2005, foreign student graduates of Australian universities comprised 20% of skilled migrants, with Chinese and Indians notably making up the largest segment. About two-thirds of Indian graduates and nearly 40% of Chinese graduates eligible for immigrant visas who applied were successful.
However, a year after graduation, foreign student graduates who became Australian immigrants had unemployment rates approximately twice the rate of comparable Australian graduates, 15% compared to 8%.
One contributing factor is likely that it takes up to six months after graduation to get an immigrant visa. This might cause employers to prefer Australians.
Another consideration was that, at the time, only one year of study in Australia was required to get an immigrant visa. This led to the creation of many one-year masters' courses that produced graduates who performed poorly in Australia, relative to more extensive programs and their graduates. But, since 2003, at least two years of study are now required for graduates to qualify for an immigrant visa.
In New Zealand, a 1990 law allowed public educational institutions to charge full fees to international students. In 1998, several immigration policy initiatives were passed, aimed at making New Zealand a more attractive destination for entrepreneurs, investors and students.
Foreign students, for instance, could receive points toward an immigration visa for graduating from a New Zealand institution, and could also work 15 hours a week while studying (changed to 20 hours per week from July 2005).
After graduation, foreign students may search for jobs for six months, receive a two-year work permit when they find a job, or secure an immigrant visa if they otherwise have accumulated sufficient points.
As a result, the number of Foreign Fee Paying (FFP) students in New Zealand rose rapidly, from about 28,000 in 1998-99 to a peak of 120,000 in 2003. Subsequently, it then fell to 102,000 in 2004. China, South Korea and Japan were the leading countries of origin, and accounted for more than 50% of the foreign students.
Some 221,000 foreign students received their first student visas between 1997 and 2005. 13% of them had become immigrants by 2005, including two-thirds of South African students, 44% of those from the United Kingdom, and 26% of the Indian students. A 2004 survey of 2,700 foreign students found that 42% planned to apply for immigrant visas, with Chinese being the largest category.
Related:• Australian job growth and economy strong and growing