Experts have warned that Australia’s visa system is increasingly being exploited by international students who use university degrees as a “backdoor” into the labour market.

A report released on Thursday by the Liberal-aligned Menzies Research Centre (MRC) claims that large numbers of international students are engaging in “visa-hopping,” enrolling in degree programmes primarily to gain access to work opportunities through student or bridging visas.

According to Department of Education data, the national first-year dropout rate for international undergraduate students rose to 17.4 per cent in 2023, compared to 9.7 per cent in 2018 before the COVID-19 pandemic.

The MRC report also revealed a sharp rise in the number of people on bridging visas while applying for student visas, increasing from 13,000 in 2023 to more than 107,000 in 2025. MRC Chief Economist Nico Louw said this had effectively left a “backdoor” open to the Australian labour market.

Louw warned that international student dropout rates were surging as non-genuine students learned how to exploit the system, adding that tens of thousands of dropouts were remaining in the country to work, placing additional pressure on housing and public services.

He noted that eight Australian universities recorded first-year international student dropout rates above 20 per cent in 2023, with five universities exceeding 25 per cent and ten surpassing 33 per cent. Central Queensland University recorded the highest attrition rate at 57.2 per cent, meaning more than half of its international students dropped out in their first year.

The MRC further stated that around 42,000 student visa cancellation and refusal appeals are currently before the Administrative Review Tribunal (ART). Student visa cases now account for more than one-third of the tribunal’s workload, resulting in lengthy delays during which applicants continue to hold work rights.

University of Sydney Associate Professor Salvatore Babones, a co-author of the report, said many international students were effectively paying tuition fees in order to work. He claimed that international students now make up roughly 10 per cent of Australia’s labour force, making it more difficult for low-skilled Australians to find employment.

Babones argued that jobs traditionally held by less-educated Australians, such as positions in supermarkets and care homes, are increasingly being filled by international students, contributing to higher reliance on JobSeeker payments or the Disability Support Pension.

He proposed that international students who drop out of university courses should be required to leave Australia and reapply from offshore if they wish to switch to vocational studies. He said this would be fairer to students who apply honestly for vocational courses but face stricter visa approval processes.

“The university visa should not be a backdoor into Australia’s labour market,” Babones said, stressing that it should be reserved for those who genuinely intend to pursue university education.