What happened
Australia's Department of Home Affairs released a consultation paper on 30 October 2026 seeking views on two parts of the Student visa (subclass 500) assessment: Ministerial Direction 106, which guides how the Genuine Student requirement is assessed, and the financial capacity framework for applicants. Written submissions close at 12:00 pm AEDT on Monday 23 November 2026.
The department states on the consultation page that no decisions have been made on the proposals. Feedback will inform advice to Government, which will then decide whether reforms proceed and, if so, their scope, sequencing and detailed design. As of publication, no new rule is in force and no commencement date has been announced.
The trigger is persistently high offshore refusal rates. At the Australian International Education Conference (AIEC) 2026 in Sydney, Assistant Minister for International Education Julian Hill said the government would not compromise on integrity, but that Navitas data and market feedback show refusal rates are now affecting key source markets and deterring the students Australia most wants — because they fear a refusal will damage their chances of studying elsewhere.
Hill rejected the idea that rising refusals were driven by migration targets, calling them questions of application integrity, and pointing to files where the family could not fund the course without eventually securing a migration outcome. He said Home Affairs and Education officials have been rewriting financial standards for South Asia alongside a technical reference group of sector representatives, with a new legislative instrument and a draft direction intended to replace MD106.
The consultation comes weeks after the previous round of student visa integrity reforms took effect, which restricted most student and graduate visa holders from adding family members and tightened onshore application, course-transfer and study-progression rules. For students who must apply from offshore to finish their studies, the department says decision-makers have been told to prioritise complete and straightforward applications, with a five-day target processing time.
Four proposed models for proving funds
The paper's central idea is to move the money test from documents to location. The first three long-term models would end with applicants keeping their study money in their own eligible Australian account before they lodge.
| Model | Amount to be shown | Holding period | Access arrangements |
|---|---|---|---|
| Model one | 50% of total tuition and prescribed living costs for the whole course or package | At least one month | Released on a prescribed schedule |
| Model two | The same 50% amount | Three months | No mandatory restriction on access |
| Model three | 100% of first-year tuition and prescribed living costs | Three months | Managed disbursement possible for defined cohorts |
| Model four | Approved loans, scholarships, own funds or a combination | No single standard | Generally still moved into an Australian account; direct reliance on offshore finance only in limited cases |
All models carry three common conditions: financial evidence at the point of lodgement, independent of a provider's Evidence Level setting; verification of the source, ownership, accessibility and sustainability of the funds; and no credit for expected earnings from work in Australia.
Notably, the department says the change would not raise the amount students must currently show. The point is proof that money is genuine, reachable and durable. For many families the threshold stays the same while the evidence becomes harder: where the money sits, how long it has been there and whether it can actually be drawn down all become separate tests.
An interim step for higher-risk nationalities
Before any long-term framework lands, the department is considering an interim measure for primary applicants from countries classified as Evidence Level 3: financial evidence at application, regardless of the provider they attend.
Under the proposal, deposits would generally need six months of transaction history, and support would normally have to come from the student, a spouse, parents or another approved supporter. Secured or government-backed loans and recognised education-finance products would be favoured, while unsecured personal loans or loans not yet paid out would generally be excluded. This step also leaves the amount unchanged.
One caveat: evidence levels are set by Home Affairs from the historical compliance record of nationalities and providers, and the lists are revised periodically. Which countries currently sit at Evidence Level 3 should be checked against the latest official publication rather than assumed from past experience.
How the Genuine Student test would change
The direction of travel on MD106 is away from formulaic Genuine Student statements and back toward verifiable facts. The paper floats different considerations for students starting a new course and for those continuing or returning to study, scrutiny of the credibility of the proposed course and of prior study and progression, treating completed study through a credible transnational education pathway as a positive factor where progression and outcomes are demonstrated, and clearer reasons when a visa is refused.
The practical consequence: a well-written study plan will not repair a gap between the chosen course and the applicant's academic history, work background and career goal. A change of field, a study gap or a previous refusal is not fatal on its own — but unexplained, each becomes decisive.
What to do now
Hill's stated aim at AIEC was blunt: even if it means raising financial standards and shrinking the pool of prospective students, he wants grant rates to improve and certainty for everyone. The policy direction is fewer, better-qualified applicants rather than more, looser ones. For families targeting a 2027 or 2028 intake, the useful work is to build a funding structure that would survive any version of the rules.
In practice: concentrate the money in one account held by the student or a parent; keep salary records, tax filings, property sale contracts and fixed-deposit receipts that show where it came from; avoid large round-sum deposits in the weeks before lodging; if borrowing, prefer a secured or government-backed education loan over unsecured consumer credit; and do not size the budget on the assumption of part-time earnings.
Current practice versus the proposals
| Element | Today | Proposed direction |
|---|---|---|
| Where the money sits | Bank evidence, an approved loan or income proof; accounts onshore or offshore | The first three models require funds in an eligible Australian account in the applicant's name |
| How long it is held | Point-in-time balance plus statements | A one-month or three-month minimum becomes a hard condition |
| What is assessed | Whether the amount covers tuition, living costs and travel | Added checks on source, ownership, accessibility and sustainability |
| Role of evidence levels | Evidence level shapes how much documentation is required | Financial evidence at lodgement, regardless of the provider's evidence level |
| Part-time earnings | Not a primary form of evidence | Explicitly excluded as a substitute for tuition and living costs |
The table shows the technical logic: the old test asked whether money existed; the new one asks whether it can be verified, accessed and sustained. For applicants whose funds have sat in a family account with a clear paper trail, the added burden is modest. For files built on short-term borrowing, third-party deposits or verbal sponsorship, the impact would be substantial.
Note that MD106 and the financial capacity framework run on separate tracks. The paper keeps financial capacity apart from the genuine student assessment, so adequate funds do not shelter a weak course rationale, and a strong study plan cannot cure deficient financial evidence.
Three practical effects for Chinese applicants
First, funding must start earlier. If a three-month holding period becomes the rule, money needs to be in place three months before lodgement, not after an offer arrives — hardest for families relying on a property sale or a maturing investment.
Second, simplify the account structure. Parental support remains an accepted source, but the relationship and the origin of the funds must be provable. Money split across relatives' accounts, or routed through a company account, adds explanation costs that officers will weigh.
Third, room to manoeuvre onshore keeps narrowing. The previous round already restricted onshore lodgement and course transfers, and this consultation proposes no easing. Students already in Australia who plan to change providers or extend should plan against the rules in force, not against options sketched in a discussion paper.
- Question
Is this already a new rule?
- AIAIG answersNo. The department states on the consultation page that no decisions have been made. The paper sets out options for comment from applicants, providers and the sector; whether reforms proceed, how and when is a decision for Government. Current rules continue to apply until a new legislative instrument or ministerial direction is published.
- Question
Are students who already hold a visa affected?
- AIAIG answersGenerally not. The consultation concerns the assessment framework for visa applications, meaning new lodgements. Students already in Australia who do not need a new visa keep their existing conditions. If you plan to transfer providers, extend or reapply, the rules in force apply — and the previous integrity round already tightened onshore applications and course transfers.
- Question
Can the money stay in a parent's name?
- AIAIG answersUnder the proposal, yes, with clearer conditions. The interim measure says support would normally need to come from the student, a spouse, parents or another approved supporter. Parental funding therefore remains acceptable, but the relationship, the origin of the funds and the student's real access to them must be demonstrable — not simply a balance certificate.
- Question
Which countries are at Evidence Level 3?
- AIAIG answersEvidence levels are assigned by Home Affairs from the compliance history of nationalities and providers and are revised periodically. The interim measure applies only to primary applicants from countries classified at that level. Check the department's official pages for the current position rather than relying on past experience or agent advice, because a reclassification directly changes the documents required.
- Question
Has the amount gone up?
- AIAIG answersNo. The paper states the change would not raise the amount students must currently show; the focus is proving funds are genuine, accessible and sustainable. At the same amount, scrutiny shifts to source, ownership, holding period and practical access. What needs replanning is the timing and account structure, not the headline figure.
- Question
What should be prepared now?
- AIAIG answersThree practical steps: concentrate the funds in one account held by the student or a parent, with documents showing where the money came from; avoid large round-sum deposits in the weeks before lodging; and if borrowing, prefer a secured or government-backed education loan over unsecured consumer credit. Do not size the budget on part-time earnings — the paper explicitly excludes them.
AIAIG View
The most important thing about this paper is not whether families must hold more money, but that verification itself is being rebuilt as a compliance process rather than a document submission. The following is judgement based on public documents, not official guidance; confirm details against official announcements.
First, families targeting a 2027 intake who are still shortlisting should put "when the money lands" at the top of the timeline, not the bottom. If a three-month holding period becomes the rule, funds must sit still three months before lodgement — which pulls the sourcing decision, currency conversion and cross-border transfer forward by a quarter.
Second, do not treat a consultation paper as settled fact when making irreversible decisions. No decisions have been made, and Government may adopt part of the package or phase it in. Students holding conditional offers with deposit deadlines should prepare two funding plans — one under current rules, one assuming a three-month hold — and should not let deposit timing rest on an assumption.
Third, simpler is safer. A single account, clean salary and tax records, traceable proceeds from a property sale or an investment redemption: that is the lowest-cost route to compliance. Moving money between relatives' accounts to hit a number is close to guaranteed to trigger an explanation requirement under the new framework.
Fourth, if the Evidence Level 3 interim measure proceeds, the most exposed applicants are in South Asia rather than mainland China. Chinese applicants should still read the signal: the genuine student assessment is shifting from statements to factual consistency, and the fit between course and background is becoming a leading cause of refusal.
Fifth, students planning to extend their time in Australia through provider transfers or onshore renewals should replan against current rules. The previous round tightened both routes and this consultation proposes no relief. Betting on unpublished reform is the riskiest position available right now.
Sources
Last updated Nov 2, 2026