International students and permanent residence

A Grattan Institute report released last night calls for big changes to the criteria for gaining permanent residence. While recognising that migration and higher education links may have benefits for Australia, the report questions giving permanent migration preference to former international students through points for Australian and regional university degrees, the professional year, and use of skills shortage lists. Instead they recommend permanent residence priority for employer-sponsored people earning more than $80,000 a year.

Major changes to PR rules would make international students nervous. And whatever the general merits of Grattan’s proposal, after Job-ready Graduates and border closures now probably isn’t the time to inflict another big problem on the higher education sector.

But reading the Grattan report (which I saw in draft) highlighted to me that I did not know how many former international students eventually achieve PR. The work for this post was an only partially successful attempt to remedy this situation. I’m not a migration expert and I may have missed or misunderstood things, but FWIW my key findings are below.

Total numbers of former international students with permanent residence

Counting former international students with PR is not a straightforward exercise, since there are many direct and indirect routes to permanent residence. A 2018 Treasury paper based on detailed immigration data identified 5,500 routes from a temporary visa, of which student visas are the largest category, to a permanent visa.

Taking all of these routes into account, of the 1.6 million people who had arrived on a student visa between 2000-01 and 2013-14 the Treasury paper calculated that 16 per cent, or about a quarter of a million, had achieved PR.

This number, however, is not consistent with an earlier Productivity Commission analysis, which on my reading of the relevant chart gets us to 300,000 international student conversions to PR just counting arrivals between 2000-01 and 2005-06.

The ABS Characteristics of Recent Migrants survey estimates how many people who first arrived on a student visa in the last 10 years have achieved PR or citizenship (a further step on from PR). The 2013 and 2016 surveys show growing numbers of former international students with PR or citizenship. By 2019, however, the numbers had fallen back below the 2013 level.

All the ABS numbers in the chart are below what we might expect from the Treasury or Productivity Commission figures. Policy changes a decade ago made it harder to transition from a student visa to PR just by holding a qualification in an area of alleged skills shortage. So an underlying downward trend is quite possible. There are, however, important differences between the ABS numbers and earlier statistics.

The Treasury and Productivity Commission are each as at a date several years after the end of the period being examined. This is because it takes time for students to finish their courses, and quite possibly also further temporary visas, before getting PR. So although the ABS numbers have a ten year arrival window, realistically only those who began studying in the first six or seven years could be eligible for PR. The eventual number of PR grants for those who arrived over each ten year period will be higher than shown in the chart.

Another difference is that the ABS survey covers persons present in Australia, not anyone who received a PR visa in the time period (the Treasury and Productivity Commission figures). HILDA data suggests that degree-qualified immigrants are more likely to emigrate from Australia than graduates who were born here. It also seems likely that recent migrants spend more time out of Australia than non-migrants, for example visiting family and friends in their home country. If their dwelling is empty when the ABS calls that will increase sampling error (the recent migrant survey is a supplement to the labour force survey, of approximately 50,000 people in 26,000 dwellings).

Moving from a student visa to permanent residence

Although the ABS numbers undercount total eventual PR recipients for their ten year time periods, their trend is consistent with annual PR grant flow data. The chart below from the migration statistics report shows PR grants when the last visa held was a student visa. The decades prior to the 2013 and 2016 ABS numbers capture the peak period of 2010-11 to 2012-13 for direct transitions from a student visa to PR.

The chart also suggests that the chances of getting PR straight from a student visa must have gone down significantly. More international students are completing courses but fewer are granted PR in the short term.

To better understand these numbers I transcribed the detailed visa subclass figures reported in the Department of Home Affairs student and temporary graduate visa reports. My spreadsheet is here. The numbers don’t always match the migration statistics report. Some discrepancies are because I cannot match the unspecified ‘other’ visas to my categories of interest. But Home Affairs also puts provisional visas, with a clear but not I assume guaranteed path to PR, in the permanent category. While this makes sense for migration planning purposes, for this novice user of migration statistics it raises doubts about whether it leads to an over-count of eventual PR numbers.

For example, Home Affairs counts former international students as permanent if they move to the 820 partner visa. The Department’s website describes this as a temporary visa while eligibility for a permanent 801 visa is assessed. I presume an 801 is granted in most cases unless the applicant changes their mind or the relationship is deemed fraudulent. However, the family figures in the chart above could overstate the eventual actual PR grants flowing from that financial year’s decisions.

My skilled migration numbers are reasonably close to the migration statistics report for 2017-18 and 2018-19, but more than 2,000 out for 2019-20. They can be brought into line by adding in the 489 Skilled Regional Provisional visa. Its webpage says ‘if you are granted this visa, you might be able to apply for the Skilled Regional (Permanent) visa (subclass 887)’. The word ‘might’ makes this visa transition seem more than a formality, but perhaps that is a misreading on my part.

Another category of permanent visa given to former international students is the protection visa. The number awarded in 2019-20 was the lowest in more than a decade at 544. It peaked in 2014-15 at 1,285. Protection visas don’t seem to be included in the migration statistics report data in the chart above.

A further complication to keep in mind is that the annual numbers include primary and secondary applicants. The primary applicant is the former international student and the secondary applicants are usually partners and children. At the time of the original student visa grant secondary applicants look to be around 12-14 per cent of the total. I am not sure how that translates into subsequent PR grants or how many secondary applicants are themselves former international students.

The changing skilled visa paths used by international students

The migration statistics sub-categories show significant changes over time in the nature of skilled migration. For former international students, state and territory nomination has grown from about 10 per cent of all skilled permanent/permanent pathway a decade ago to around 30 per cent in recent years.

In 2019-20 the Global Talent visa exploded from a handful to 13 per cent of the skilled former international student total. To get a Global Talent visa, an applicant is supposed to have ‘an internationally recognised record of exceptional and outstanding achievement in one of the following areas – a profession, a sport, the arts, academia and research.’ Former international students scooped up more than 30 per cent of all the Global Talent visas in 2019-20. The half financial year to the end of 2020 suggests former internationals are still going strong in this category, approaching their 2019-20 total in just six months.

The Grattan report is critical of the Global Talent program, as exactly how successful visa applicants are chosen is less than transparent. A Grattan Freedom of Information request suggests that the IT industry is a big user of this visa. It seems unlikely that many newly graduated international students could demonstrate ‘outstanding achievement’, except maybe PhDs. Although most Global Talent visas go to people already in Australia, the criteria of ‘last visa held was a student visa’ could include people who studied in Australia years ago and are now returning.

Multiple-step moves to permanent residence

On the publicly-available data we cannot track all the many different visa paths international students might take to PR. Even though fewer former student visa holders get PR after a student visa than a decade ago, larger numbers transition to a new temporary visa. These can be part of two or more step processes for getting PR.

Excluding further student visas – an unreliable time series in my spreadsheet because Home Affairs has changed its method of counting them several times – the most popular temporary visa is the 485 temporary graduate visa. This lets graduates of Australian universities stay and work in Australia for two to four years after completion. Unlike other temporary visa categories this one is exclusively for former international students. The 485 visa program has grown significantly from 23,000 visas granted in 2013-14 to 63,000 visas in 2019-20.

There is data on transitions from 485s to other visas since 2016-17 (spreadsheet here). It has fewer unexplained ‘other’ visas compared to my former student visa holder data, but the same permanent/permanent pathway classification issues. As the chart below shows, the 485 is a more common visa preceding clear PR than the student visa. The combined total is about 20,000 PR visas in each of the last two financial years.

Former student visa holders are more likely to be on a PR pathway visa, but this is due to the 820 partner visa. More people come off student than 485 visas each year, so it is unsurprising that a higher number of recent students than 485s are in a relationship with someone who already has PR or citizenship. People with long-term relationships dating back to their student days would probably find the 820 visa more attractive than the 485, and so already headed down the romance rather than the skills path to PR. The spike in 485 pathway numbers in 2019-20 is driven by 489 visas.

In another relationship complication, the 485 applicants are much more likely than students to have secondary applicants. Of the 485 grants in 2019-20, 26 per cent were for secondary applicants.

Combing ex-student and ex-485 numbers

In total in 2019-20 I can identify 34,513 former international students and their secondary applicants who were granted PR or a visa that puts them on track to PR. Despite it being likely that some people on the pathway to PR don’t make it, and that secondary applicants inflate the number, I think the true total is likely to be higher due to former international students who gain PR from other than a student or 485 visa.

For example, since 2016-17 more than 42,000 non-485 temporary visas with work rights have been granted to former student and 485 visa holders. Some of them will be aiming for less direct routes to PR. Tens of thousands of former student or 485 visa holders each year get another student visa or go onto a visitor visa, and so at least stall their departure.

Recent developments

Whether the apparent upward trend from 2017-18 will be sustained is hard to say. Migration policy change and the huge disruptions to both temporary and permanent migration caused by the closed border policy make it hard to predict what will happen. 485 visa holders stuck outside Australia are not getting the working and dating opportunities that would help them get PR. Completing students studying from their home countries who might previously have applied for a 485 won’t, at least in the next year, as they will not be allowed to come to Australia.

For former international students who are in Australia, the migration planning levels for 2020-21 indicate reduced capacity in the skilled visa categories in which they have historically done well. Numbers have been increased for Global Talent and Business and Innovation and Investment Program visas (although a media article suggests the numbers will be reduced from previously announced planning levels). The Grattan report is not a fan of the innovation and investment visa either, on the grounds that in practice it brings in migrants are older, less educated and less proficient in English than the other skilled categories. In my spreadsheets only a small number of former international students have received this visa.

On the other hand, former international students adapt to policy changes, switching from independent to nominated visas as the policy wind changed direction, and doing surprisingly well in the Global Talent visa. And for 2020-21 the number of partner visas has nearly doubled. For some international students love is easier to find than a high-skill job.

4 thoughts on “International students and permanent residence

  1. Thanx very much for this. So what is your estimate of the proportion of international students who gain permanent residence? I gather it may be somewhat higher than Treasury’s 16%, but that would be way below popular impressions both within universities and outside that ‘most’ international students become permanent residents.

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  2. Trying to estimate the numerator was hard enough, but the denominator is even tougher since unique persons numbers are hard to come by. But for example if we took higher education + VET completions for the fours years to 2019 and averaged them to get some kind of cohort number for those seeking PR in 2019-20 we would get to about 18% transition to PR. While I have doubts about the Treasury number, the described methodology is the right one – take all unique persons who arrived on a student in a specified time period, and then use subsequent visa data to track outcomes. I would say minimum 5 years from the date of arrival before (degree + 485) or two years from the date of completion before the numbers are meaningful.

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  3. My ‘gut’ feel is that a figure of between 15 to 25 per cent gaining PR is about right. Two uncertainty factors: do the calculations take into account whether international students whose last visa was a student visa but returned home before applying for or gaining PR; and do those gaining PR actually stay in Australia in the longer term or return home (or go elsewhere) keeping the PR as a safety net.

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  4. My inference is the last visa held could be some time ago. For students I am not sure how they are doing so well in the Global Talent visa unless they have overseas experience. For 485s the fact that a small number are getting pathway PR based on an offshore visa (the 309) also suggests that some might have gone home in the interim. The number of people with PR will always be less than the number of persons with PR in the country on a specified day, but whether former internationals use PR for insurance reasons more than other PR holders I don’t know.

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