Australia Eyes First-Ever ESOS Act Recruitment Suspension
Table of Content
Key Highlights
- Australia’s Assistant Minister for International Education Julian Hill said on 30th October 2026 that he was actively considering using Section 97 of the ESOS Act for the first time.
- A Section 97 suspension certificate bars a provider from recruiting international students for six months, and further suspensions can follow.
- New international student commencements at public universities are projected to fall by around 18% in 2026, wiping around A$2 billion from university revenues over three years.
- The Department of Home Affairs (DHA) is consulting on a replacement for Ministerial Direction 106 and tougher financial capacity rules until 23rd November 2026.
Hill Weighs Provider-Level Crackdown Under Section 97
Australia may implement a tough enforcement measure against education providers in an attempt to restore integrity to its international student visa system. On 30th October 2026, Assistant Minister for International Education Julian Hill told the Australian International Education Conference (AIEC) in Sydney that he was “actively considering” using Section 97 of the Education Services for Overseas Students (ESOS) Act for the first time.
This section allows the Immigration Minister to issue a suspension certificate where significant numbers of a provider’s students are using their visas for purposes other than study. While this power has existed for more than two decades, no minister has used it yet. Mr Hill listed this alongside measures already taken: a ban on commissions for onshore student transfers, and the first use of the government’s course cancellation powers.
The announcement comes amid growing concerns about Australia's student visa framework. Currently, the Australian Labor government is preparing to recalibrate its student visa crackdown after acknowledging that stricter requirements and rising refusal rates were discouraging genuine applicants. The government is attempting to address both sides of the issue i.e. tightening oversight of providers while making visa requirements clearer for prospective students.
Australia's recent intervention against the Graduate Diploma of Management (Learning) course was an early indication of its willingness to exercise stronger regulatory powers. The latest move adds another dimension to this approach, as DHA consults on proposed revisions to the Genuine Student requirement and financial capacity framework. The consultation remains open until 23rd November 2026, pointing to a wider review of both provider conduct and student visa assessment.
However, Mr Hill paired the warning with a concession. In the same speech at the AIEC, he cautioned against an “overcorrection” that could drive away the genuine students Australia wants and that high refusal rates for South Asian source countries were deterring some applicants.
How the Suspension Under Section 97 Works
Section 97 allows the Immigration Minister to issue a suspension certificate if, in the Minister’s opinion, a significant number of overseas or intending students linked to a provider are entering or staying in Australia for purposes not contemplated by their visas.
Here are some of the things the Minister may consider before arriving at a decision:
- Student visa applications refused because of fraudulent documents.
- Breaches of student visa conditions or students remaining in Australia unlawfully.
- The provider’s immigration outcomes score, a factor added to the Migration Regulations 1994 from 23rd March 2024.
Before a decision is reached, the provider receives a Notice of Intention to Consider Suspension and has at least seven days to respond. If issued, the suspension certificate lasts six months unless revoked early, and further suspensions can follow unless the provider alleviates the Minister’s concerns. Moreover, breaching a suspension certificate is an offence under Section 101 of the ESOS Act. A suspension decision is not open to merits review, although a provider may seek judicial review.
Unlike course-specific restrictions, this measure would bar the provider from recruiting any new international students during the suspension period. This could disrupt future enrolment pipelines, recruitment partnerships and revenue forecasts, particularly for institutions heavily dependent on overseas student intake.
A$2 Billion at Stake as Commencements Slide
The proposed enforcement action comes as Australia's international education sector faces a challenging recruitment environment. According to government data, 738,694 international students studied in Australia between January and August, down 8% year-on-year (YoY). Over the same period, international student enrolments reached 866,252, declining 9% YoY, while commencements fell 12% YoY to 327,270. However, this decline was spread unevenly. The Vocational Education and Training (VET) sector recorded a 19% decline in enrolments, compared with a decline of less than 1% in higher education.
Besides declining enrolments, the slowdown is creating significant financial pressures for Australian universities. Mr Hill said that new overseas student commencements for public universities were projected to end this year down by around 18% on last year, wiping around A$2 billion over the next three years from university revenues. He attributed the decline partly to policy and integrity changes, alongside shifts in student preferences, competition from other destinations and cost of living pressures. He also said he would have preferred universities to put forward more students who meet visa requirements.
These developments highlight a policy dilemma for Australia. While stronger compliance measures are intended to protect the student visa system, falling student demand and uncertainty around visa approvals could affect the country's competitiveness as a study destination. International education is Australia's fifth-largest export sector and supports around 250,000 jobs, making the balance between regulatory oversight and student recruitment particularly important.
DHA Opens Consultation on Genuine Student Test
Alongside the enforcement signal, the government opened a consultation on how it assesses student visas. The DHA discussion paper, released on 30th October 2026, covered two areas:
- A replacement for Ministerial Direction 106, which guides how decision-makers assess the Genuine Student requirement.
- Stronger financial capacity rules, with three of the four options would require applicants to hold funds in an Australian account in their own name before applying.
Submissions on these proposed changes can be made by universities, education agents and other stakeholders until 23rd November 2026. Mr Hill also said decision-makers had been told to give the highest priority to complete, straightforward applications from students who must apply offshore to finish their studies. DHA is targeting processing these cases within five business days.
What the First Suspension Would Mean
The government wants clearer rules for genuine students and heavier consequences for providers whose cohorts misuse visas. The current proposal puts the spotlight on the government’s willingness to move beyond course-level restrictions and hold providers accountable at an institutional level. The first issuance of a Section 97 certificate would set a significant precedent showing that institution-wide sanctions are now a live option rather than a theoretical one. Providers with weak immigration outcome scores, and the agents who recruit for them, would face the most immediate risk.
(Writing by Kritika Bhatia, Editing by Shivani Singh)