Educli  ·  Fortnightly  ·  Budget Special

Inside International Education

Issue 11  ·  May 2026  ·  By Jan Karel Bejcek

In this issue

• The migration “blowout” that isn’t an arrivals story
• What NOM actually measures, and what it doesn’t
• Grant volumes are collapsing while NOM rises
• The onshore priority shift that quietly rewires the program
• The WHM ballot — biggest structural change to working holidays in fifty years
• The Passenger Movement Charge and what it tells us
• The price of asking: $6.18 billion in visa fees

This issue is a single argument across seven sections.

The argument is that the migration story dominating headlines this week is the wrong story. The numbers being called a “blowout” describe something other than what the political conversation suggests. And the parts of the Budget that will actually reshape the sector are not the parts being covered.

This is the unpacking.

01

The departures story

The migration “blowout” isn’t what you think it is.

Tuesday’s Budget confirmed net overseas migration will hit 295,000 in 2025-26 — 35,000 higher than Treasury forecast a year ago. The papers are calling it a blowout. The opposition is calling it hopeless.

Read the Budget paper itself and the explanation is one sentence long.

“Migrants on temporary visas are departing Australia at lower rates than in the past.”

Not arriving in greater numbers. Departing in smaller numbers.

The offshore student visa grant rate fell from 84.3% to 60% in twelve months. India dropped from 68% to 46%. Nepal from 85.5% to 27.7%. Sri Lanka from 87.9% to 47.7%. Bangladesh from 90.8% to 50.5%.

Those are not the numbers of a country waving migrants in.

What’s holding NOM elevated is the stock already here. 2.6 million temporary visa holders as of March 2026. A 485 cohort that swelled through 2022-23 and is now ageing through the system. Bridging visa accumulation as people transition between products. New Zealand arrivals tracking strong.

The arrivals tap is being turned hard. The departures tap isn’t opening.

That distinction matters because the policy response is different. Tightening grants squeezes the front door. It does nothing to people who are already inside the house and choosing to stay.

The next phase of migration policy will have to address the stock, not just the flow.

02

What NOM actually measures

A quick clarification, because the Budget coverage is muddling two different things.

Net overseas migration is not the same as the number of migrants Australia lets in each year.

NOM is a residency-based measure. It counts anyone — citizen or not — who has been in Australia for 12 of the last 16 months, minus anyone who’s been out of the country for 12 of the last 16 months.

That definition has consequences.

A returning Australian citizen counts as NOM. A New Zealander on the trans-Tasman arrangement counts. A student who arrived two years ago and is now on a 485 counts. A working holiday maker who extends past the 12-month threshold counts.

NOM is not a visa grant figure. It is not the permanent migration cap. It is not the number of people Home Affairs let into the country last year. It is a population-accounting measure that captures the cumulative effect of every visa category, every citizenship return, every long-stay decision happening simultaneously.

Three things follow from that.

First, you cannot move NOM by changing one visa subclass. You move it by changing the system.

Second, NOM moves with departures as much as arrivals. If 100,000 fewer people leave, NOM rises by 100,000 — even if not a single extra visa was granted.

Third, the political conversation about “cutting migration to 225,000” is a conversation about a derived statistical artefact, not a policy lever. The actual levers are visa caps, grant rates, and the conditions that determine whether temporary holders stay or go.

When someone tells you migration is up, ask which number they mean.

03

Grant volumes are down

A reminder for anyone reading the “migration blowout” coverage this week.

Grant volumes are down. Across the board.

The 485 application fee doubled to $4,600. The training visa was tightened. The student visa fee moved from $710 to $2,000 in eighteen months. Evidence Levels were reclassified upward for high-volume markets in January.

Every front-door lever the Department has, it has pulled.

And yet net overseas migration is forecast to come in 35,000 above last year’s projection.

The conclusion isn’t that policy isn’t working. The conclusion is that NOM responds to a different set of variables than the ones the Department is pulling. Grant tightening compresses arrivals. NOM is shaped by arrivals minus departures, and departures aren’t shifting.

If you’re an education provider, the headline matters less than the local data. New offshore enrolments from South Asia are not the same conversation as they were two years ago. Conversion rates are different. Diversification matters more. And the cohort that was always going to be hardest to win is now harder still.

The “blowout” is happening in the demographic accounting. The squeeze is happening in your pipeline.

Those are not the same story.

04

The onshore priority shift

The most consequential migration change in Tuesday’s Budget wasn’t a number. It was a sentence.

That’s 70% of the entire permanent program allocated to people who are physically onshore. Only 55,110 places — across skill and family streams combined — will be available to applicants outside the country.

This is a structural shift. For most of the modern migration program, offshore skilled applicants competed on equal footing with onshore transitions. From 2026-27, the program is being explicitly built around people who are already here.

For international education, that changes the value proposition.

A student visa is no longer just a study product. It is increasingly the qualifying step for a permanent migration application. The pathway looks like this: study, graduate, transition to 485, accumulate skilled work, apply onshore for permanent residency from a prioritised position in the queue.

Three implications worth thinking through.

For providers, the students who succeed in this system are the ones who can complete the full pathway. Course selection, post-study work eligibility, skilled occupation alignment, English level — these now matter more at the point of enrolment, not less. A course that doesn’t lead anywhere is a much harder sell when the prize at the end is onshore priority.

For agents, counselling that ends at the student visa grant is incomplete. The product you’re now selling is a five-to-seven-year pathway, and the questions clients ask should reflect that.

For offshore applicants, the gate has narrowed. 55,110 places against millions of potential applicants worldwide. The points test is also being “optimised to select better educated, higher-skilled and younger migrants.” Older, mid-skilled offshore applicants will find Australia harder to enter from outside than at any point in recent memory.

The system is now organised around a simple proposition: come as a temporary, prove your value, transition onshore. International education sits at the front of that funnel.

05

The WHM ballot

Budget 2026 quietly committed Australia to a working holiday maker ballot system. The announcement got two lines of coverage. It deserves more.

The Working Holiday Maker program will be reformed to “better control numbers, reduce barriers to work, provide a fairer allocation of WHM visas, and support Australia’s national interests.” The mechanism is “expanding the use of ballots in the WHM program.”

For context: WHM holders are at record levels. Demand from key source countries far exceeds the bilateral caps. The current system rewards speed of lodgement and bureaucratic familiarity. A ballot replaces that with randomised allocation against a fixed cap.

Canada has run this model for years. The International Experience Canada program opens for a defined window, applicants enter a pool, and the government draws successful candidates at random. It is transparent, capped, and removes the queue-gaming behaviour that distorts demand-led systems.

The implications for education providers and agents working WHM-adjacent products are significant.

Working holiday makers are not international students, but the two cohorts intersect constantly. ELICOS providers see WHM holders enrolling on short courses. Vocational providers see them transitioning into student visas after their first or second WHM year. Migration agents see them as candidates for 482, 491, and onshore points-tested pathways.

A ballot system changes the demand certainty for all of that.

Three questions worth holding.

How is the ballot triggered? By nationality, by global cap, or both? The detail will determine which agent pipelines are most exposed.

What happens to the gap between demand and allocation? If a ballot caps Indian or Filipino WHM at 5,000 places against 50,000 applicants, the unsuccessful 45,000 don’t disappear. They redirect to other visa products — which has flow-on effects for student visa demand, integrity pressures, and refusal rates.

What’s the implementation timeline? The Budget signalled the direction. The instrument hasn’t yet been drafted.

The WHM program has operated on essentially the same logic since 1975. A ballot is the biggest structural change in fifty years.

It is worth watching.

06

The Passenger Movement Charge

A small item in the Budget that almost nobody noticed.

The Passenger Movement Charge will rise from $70 to $80 per departing passenger from 1 January 2027.

For most readers, that’s a $10 line item on a flight booking. For the international education and migration sector, it is worth understanding what the PMC actually is.

The PMC is a tax payable by every passenger departing Australia by air or sea. It applies to citizens, permanent residents, temporary visa holders, and tourists. Children under 12 and transit passengers are exempt. The rate is flat — same charge on a $200 budget fare and a $20,000 first-class ticket.

It was introduced in 1978 as a $10 departure tax to recover the cost of passenger processing at airports. It is now the second-highest departure tax in the OECD, behind only the UK’s long-haul Air Passenger Duty. For flights under 3,200km, it is the highest in the OECD.

The 2027 increase is forecast to raise an additional $755 million over five years.

Two observations worth making.

First, the PMC is now formally untethered from its original purpose. The 1978 charge was cost recovery for passenger processing. The 2027 rate is a general revenue instrument. The same drift has happened to visa application charges — the student visa charge moved from $710 to $2,000 in eighteen months, with MYEFO forecasting $185 million in additional revenue from that change alone.

Second, the people most affected by a flat $80 departure tax are not first-class travellers. They are students returning home for holidays, migrant workers visiting family, working holiday makers transiting between regional jobs, and international graduates flying out for the last time on a 485. A flat charge is a regressive charge.

Australia now collects an extraordinary amount of revenue from people moving across its borders. And the PMC is the smallest piece of it.

07

The price of asking

Buried in Tuesday’s Budget papers is a forecast that visa application charge revenue will hit $6.18 billion in 2026-27. The year before, it was $4.66 billion.

Stack the recent fee history.

Student visa: $710 in early 2024. $1,600 by July 2024. $2,000 from July 2025. MYEFO forecast the student visa increase alone would generate $185 million in additional revenue.

485 Temporary Graduate: $2,300 doubled to $4,600 on 1 March 2026. Dependants doubled too.

Passenger Movement Charge: $70 rising to $80 from 1 January 2027. Worth $755 million over five years.

The visa system delivered roughly $1.3 to $1.4 billion in fee revenue across just four categories in 2024-25 — student visas, visitor visas, 485s, and tribunal reviews. The full program revenue is materially higher once you add 482, 186, partner, working holiday maker, citizenship, and bridging visas. Home Affairs received over 9.48 million temporary and permanent visa applications in 2024-25. Every one of them carried a non-refundable fee.

Now look at what’s being spent.

$85.2 million over four years for DEWR to run faster skills assessments. $27 million over two years for migrant worker education on workplace protections. $19.8 million over four years for enhanced scrutiny of student visa applications. The skilled trades licensing reform package. The integrity enforcement uplift. The data-matching pilots.

These are not bad programs. The trades pathway in particular has merit. But notice the direction of travel.

The Budget describes its migration package as “boosting productivity by better selecting migrants and recognising their skills.” What the numbers describe is something different. The system is collecting more money from fewer applicants, refusing a larger share of them, taking longer to decide them, and reinvesting a portion of the revenue in new compliance and assessment functions rather than in faster, cheaper decisions.

A student who applies offshore from India today pays $2,000 and faces a 46% chance of being granted. That is the price of asking — paid in full whether the answer is yes or no.

A 485 applicant pays $4,600. A partner visa applicant pays $9,365. A 482 employer sponsor pays the SAF levy on top of the application fee on top of the nomination fee. A passenger leaving the country from January 2027 pays $80 on the way out.

None of this revenue is hypothecated to faster processing. None of it is refunded on refusal. Almost none of it is being deployed to cut the regulatory burden on the providers, agents, and businesses who feed applicants into the system.

The honest description of the current migration system is this: it taxes movement. It taxes applications. It taxes refusals. It taxes departures. And it uses the proceeds to fund more of the apparatus that produces the taxes.

There is a phrase for systems that work this way. It isn’t “cost recovery.”

What’s your read?

The Budget said the quiet part out loud.

The system is being tightened, not loosened. The pathway has narrowed, not widened. The compliance bar has risen, not fallen. And the bill for asking is going up.

The practices that adapt fastest will be the ones that already understood this was the direction.

What are you seeing on the ground?

Inside International Education is published fortnightly by Jan Karel Bejcek. MARN 0965239. Founder, Educli.

Read the back catalogue at educli.com/resources.

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