Student Visas - Revisited
I am covering some old ground in this week’s article as I have discussed Student Visas before, however with the new year upon us and big changes coming to our SMC program that bring certain NZ qualifications in to the spotlight, I thought it was worth revisiting.
Student Visas are a mixed bag - some applicants simply want to study here, secure a great education in another country and then take their skills back home. For some studying in NZ is financially more viable than studying at home or the opportunity to attend a good university here is far easier than trying to compete in their own education sector. For others however, Student Visas are a potential pathway to residence in New Zealand and for others, they are sold this dream, only for it to become a complete nightmare.
This post is really about that last group, the ones considering studying in New Zealand as a means to qualifying for Residence in the future. This has become a particularly topical item, with the Government announcing that from August 2026, a New Zealand Master’s will give you a direct pathway to Residence, once you secure an offer of skilled employment. This of course is provided you have an undergraduate degree as well.
For some, this is a great option, for others it is an option that is being sold to them, by over-eager agents and some less ethical advisers, without any real consideration of whether that applicant stands a realistic chance of securing that job offer.
The Student Visa market, is one that is populated by “agents”, many of which are not licensed advisers, who peddle courses, because they are being paid a commission for every student they place. That incentive scheme, has become an incredibly lucrative market place, with those operating ethically and many more who are not.
This week we take a look at how this industry operates, the issues a commission scheme can bring, things to watch out for and of course some thoughts (which we are never short of) of how this industry could be better regulated, given both the importance of the export education sector, but also the impacts, poor decisions can have on vulnerable migrants.
The Agent Problem
I already know that this article may not make me very popular with some advisers out there, and many of them I know very well. Hopefully they will appreciate the spirit and intent of this post. I will also caveat what follows by saying that there are some very good advisers, who are operating as agents and doing a fantastic job, however just because there are ethical operators within a system, doesn’t mean that system itself is a good idea. For those know me well enough or have read enough of my posts, they will know that I have a very firm belief that the agent commission scheme within the Student Visa market is a bad idea and needs to be either scrapped or completely overhauled. And this article explains why I think that way.
Agents Earn Commission
The biggest issue in the Student Visa market is the river of money flowing between Universities, Master agents and agents.
Now, with the disclaimers out of the way, I can tell you why I hold this particular view of agent and commission scheme and the reasoning is actually very simple.
When the choices that a migrant needs to make, can be in anyway way influenced by someone who has a personal financial interest in that decision - you have the potential for disaster. It may not end that way, but there is potential and believe me, we see how badly this can end up, when those financial interests (by agents) take centre stage. No process, that has the potential to influence a person’s future, in the way that immigration can, should ever have a financial incentive attached to it. Ever.
The big news for this year however is the planned roll out of changes to our Skilled Migrant Category (SMC), which will see two new pathways being introduced for those with technical or trade skills and those without a degree, but plenty of good work experience. So how does the agent system work?
Essentially course providers, which includes Universities, Polytechnics and many other private tertiary institutions, offer “agents” an incentive to drive their international student candidates towards their courses. While these commission values are not published, they can often run as high as 30% of the first year of fees. When you are looking at tens of thousands of dollars for some courses, these commissions can create a very lucrative market place.
Add to this, that “agents” who are meant to only promote courses of study are not required to hold a license, and yet many applicants will be asking questions as to where that Student Visa might take them, you have a recipe for disaster, and it happens all the time. We see plenty of Student Visa candidates who have been sold a course, as a means to a long-term Visa, that will sadly never happen because the applicant either is unemployable or has simply been given the wrong advice.
There are of course licensed advisers who also operate in this space, and some are really good, because they think about the long-term situation for the client, aren’t necessarily motivated by the biggest commission, however there are other licensed advisers, some of whom even work for the institutions doling out the cash, who have never processed applications, yet encouraging applicants to sign up for their courses. The conflicts of interest here are obvious and yet, very little is done to manage this. There are even complex networks of “master agents” who control “sub-agents”, with everyone clipping the ticket along the way, and quasi-institutions set up, to try and convince you they hold some form of ‘authority” or separate license to operate in this space - all of of it of course, completely worthless.
For some students, looking at securing an education here, they will have a clear direction on what they want to study and where, so an agent earning a commission is largely irrelevant. However there is a much bigger market of people, looking at the Student Visa as a vehicle to secure a longer-term stay and for them, it is easy to be persuaded or convinced in to a course that either doesn’t suit that overall purpose or renders them unemployable - all because the agent will earn a bigger commission. Remember with many of these agents (even the licensed ones), having no grounding in other visa categories, they simply lack the expertise to provide that longer-term level of guidance - however that doesn’t stop them from wanting to collect a nice commission cheque.
The simple fact is, that there is a massive network of unlicensed and unregulated people, selling courses, cashing cheques and ultimately ruining lives. For those that are licensed and acting as agents, there are some who do so ethically and very well, but plenty more who don’t. The sector needs cleaning up and it needs to happen quickly, because as we push to attract more candidates to study here, given it is a big export earner, the incentives to lure these applicants in, will only increase.
The Agent Solution
Agents were largely recruited by universities to compete in what is often a very fierce offshore market for students and their money. Ultimately tertiary institutions here, survive by selling their educational wares to foreign students who pay the full fee, without subsidy. It also creates significant earnings for other parts of the economy as these students come here and spend, and they also work in many parts of our service sector in part-time roles during term-time and then full time over the holidays.
Many countries, operate this sort of system, particularly New Zealand, Australia, the UK, Canada and even the US (although their sector has had its political challenges). It’s fiercely competitive and everyone is pushing to attract the same students who all have choices as to where they go. However this competition also creates a potential problem, which isn’t unique to New Zealand. At the moment we are seeing an endless numbers of international students, based in the UK, who have all completed a UK master’s degree program and who are working at McDonald’s or in the care sector or packing goods at Amazon. They cannot secure skilled jobs, because apart from the master’s they have very little work experience, and are competing with other local graduates.
Is Regulation Needed
I believe that regulation, minimum standards, a separate form of licensing and commission caps, among other things are all long overdue.
This is a great example of how the student visa “pitch” is often oversold to applicants desparate for any opportunity to find a new life abroad. Worse, are those who are sold lower level courses, and lead to believe that will give them a Work Visa or Residence pathway, until they discover it doesn’t.
Yet, despite all these issues, agents keep cashing in, Universities keep writing cheques and no one is being held accountable. You could of course contact one of these so called “associations” who claim to hold their agents or “counsellors” to a higher standard, and of course you will find out they have no authority to do anything other than close ranks around their members.
The challenge of course is that the agent market, plays a vital role in driving those students to New Zealand and so there are a lot of vested interests in keeping it alive. I don’t have a problem with that, necessarily, but if its going to stay, it needs some guard-rails - and I can suggest a few.
Tertiary providers working with agents should be mandated to only work with licensed advisers, acting as agents - meaning anyone wanting to be an agent, would have to become licensed to do so. Our licensing regime has no teeth to deal with unlicensed people offshore, so making licensing a part of the process would add some protections. Penalties for licensed agents doing the wrong thing would exist and INZ would be able to refuse applications prepared by or assisted by unlicensed individuals.
Alternatively, we can set up a separate licensing framework (administered by the IAA perhaps) to monitor and control these agents - sort of like a limited license to advise only on Student Visas. They would have to apply for the license, be vetted and be liable to lose it, if they don’t operate adequately or have complaints registered against them.
Regulate commissions and then make them publicly available. Tertiary providers should have caps set on what they can pay and this should apply to all institutions equally, removing the potential for agents to only refer to the highest fee payers. All tertiary providers should then be required to report on commissions paid annually publicly.
Agents would be mandated to disclose (fully) the agreements they have, the fees they earn and all conflicts of interest present in any consultations conducted with a potential student. They should also be required to offer more than one course provider, incentivising them to work with more providers, at capped fee levels, reduces bias based purely on financial reward.
Create one single authority for dealing with this market, or roll that into existing IAA powers rather than having it’s own participants set up associations and groups that claim to have some form of regulation but are nothing more than thinly disguised and often misleading marketing vehicles.
Set standards for how this service can be marketed and what can be disclosed or used as advertising.
Of course this will cost money, but when you consider that the export education sector is a multi-billion dollar industry and a 2024 report suggested that commissions over the previous five years from Universities alone were over $100 million, there is plenty of cash flowing around to fund a regulatory system.
In my perfect world, the idea of commissioned agents, selling courses, often to the highest bidder, would be entirely disbanded, but I am realistic and there is too much invested in, and at stake for, the institutions who live off this income and for our wider economy. However, I think it is time for some form of regulation to be rolled out that will hopefully clean this market up.
Alongside this, there are plenty of things the Government could do, via the visa system to make New Zealand’s education system more attractive to the right markets, including creating a better upfront screening process for applicants considering a longer-term stay, more education around using agents, a better structure for our post-study work visa pathways and a more transparent processing system.
Regulation on it’s own won’t create the right market place, but it will help to alleviate some of the problems that do exist, allow good licensed advisers to continue operating and earning an income from this source and then also keep the tertiary providers honest, in who they are marketing to. Most importantly however it will ensure that applicants are given the right information and not steered towards a particular course or program simply because the agent’s cut might be bigger.
Student Visas - The Real Deal
Student Visas are a vital part of our visa ecosystem and they fill a really important role in not only supporting our wider economy but also acting as a conduit to attracting and retaining some really great skilled migrant applicants. However for many it can be an expensive road to disaster, often costing a lot more than just the fees being paid. If you are considering the Student Visa pathway, either for education purposes or aiming towards a longer-term strategy for residence, we have a few pieces of advice to offer.
What You Can Do
If you are considering the Student Visa pathway, there are some simple things you can do, to protect yourself and your longer term plans.
Ask the right questions - if you are using an agent or a licensed adviser, and they are advising you on course options, ask them to disclose any commission arrangements. Knowing what they are being paid to suggest that course can be very helpful.
If you are being recommended a course or institution to study at, do your own homework. Read independent reviews, contact the institution directly and find out for yourself if it is the right move.
If you are dealing with an unlicensed agent or “counsellor” (a name they have fashioned for themselves), and have plans to stay here long-term, get independent visa advice from a licensed person. Don’t expect the unlicensed agent to know anything more than you do about your future visa options.
Be wary of claims that your agent or licensed adviser might make about belonging to an independent association or group. These have absolutely no standing and give you no added protection.
Weigh up whether coming to study here is more or less viable than seeking out employment, if ultimately your plan is to secure residence. In many cases the cost in time and money to find a job and secure a pathway to residence immediately is far cheaper and offers more certainty than studying your way towards that goal.
Above all approach the Student Visa and agent market with your eyes open and cautiously. Studying here is a great thing to do, whether it be purely education or as a potential longer-term pathway but understanding the process and particularly where that Student Visa might take you is not something an unlicensed agent will know (or can tell you) and many licensed agents in this space are completely inexperienced with.
Point number five is one we regularly consult clients on and often, the effort and time spent on securing a job outweighs the effort, time and cost spent on doing a qualification you probably don’t need simply to secure a Open Work Visa at the end. Yes having that Work Visa is helpful, but you still have to compete for jobs in the market and if you have the right skills, you may not need that Open Work Visa to achieve the same end goal.
It is this finer detail and weighing and balancing your options that an unlicensed agent would not be able to advise you on (they legally aren’t allowed to) and many licensed agents who specialise in Student Visas, simply don’t understand.
Get The Right Advice
For most people the pathway to residence includes securing a job offer and putting in the effort and hard work to secure that offer. There are no quick and easy fixes and despite many people selling the Student Visa pathway as your “fast-track” to Residence it very rarely is. Particularly when you consider that those very same people promoting that option are collecting a nice fat cheque for you enrolling in that course.
If I was to boil it down, that is really where the issue lies and as I mentioned at the start, any system that financially incentivises an adviser to steer a person down a particular path, where that path has significant consequences, needs to either be stopped or heavily regulated. I appreciate there will be plenty of advisers out there, less than impressed with my comments and of course they are entitled to be, yet I would also suggest that those who might protest the loudest about a more regulated, transparent and accountable system, might be doing so, for the wrong reasons.
Our team focuses on the big picture and because we have experience across all visa categories, do not receive a commission and nor do we have any agreements with course providers or “master agents” we can act independently and in the best interests of the clients - and ultimately, that is what it is all about.
For advice on your next move and the potential of studying here, with a view to a longer-term future in New Zealand, get in touch with the team at Turner Hopkins Immigration Specialists today.
Until next week!
