Following a huge increase in the number of foreign students seeking to enrol in Australian education institutions, the federal government last week adopted tighter visa regulations.

During the past year, Australian immigration officials issued almost 130,000 visas to foreign students - a 20 per cent jump from the previous 12 months. But vice-chancellors have called for an easing of restrictions to enable their institutions to enrol more fee-paying students from China and countries where demand is rising. University leaders claimed that America allowed up to 50 times as many Chinese to enrol in its universities and colleges as Australia.

Under the new rules, however, mainland China is no longer listed separately from other countries. Each country is placed in a series of levels (one to five) according to how well their students complied with Australia's visa requirements in the past.

More than 110,000 foreign students are estimated to be enrolled in Australian universities, including 13,000 from Hong Kong and 6,000 from mainland China. Hong Kong and Taiwan are ranked as separate countries from the People's Republic.

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More than half the foreign students are from Southeast Asia, with those from Malaysia and Singapore comprising almost a third of the total. Students from Northeast Asia - China, Japan, Korea and Taiwan, comprise about a quarter of foreigners.

Countries listed in levels one and two include Britain, the United States, Canada and most European nations. Students from these countries will have few difficulties obtaining a visa. A student from a level-five country would have little hope of gaining a visa - although the category does not yet have anyone listed. Burma, Cambodia, China, India, Indonesia, Iran, Jordan, Lebanon and Pakistan are in level four because of previous student visa violations. Students from these countries face stricter visa requirements, including proving they have sufficient funds to cover the entire cost of their courses.

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An immigration spokeswoman said the changes would make it easier for Chinese students to gain a visa. Visa decisions should rely less on the judgement of individual immigration officers because the new rules are more straightforward and transparent. Responding to vice-chancellors' criticisms, the spokeswoman said they were interested in the money they could make from fees and did not realise how much Australia spent tracking down students who had become illegal immigrants.

"We see both sides of the coin," she said. "The universities are not the ones facing the bill to find absconding students or mounting court cases that can run into hundreds of thousands of dollars for the taxpayer; all they see is cash in their hot little hands," she said.

She explained that a country could be in one level for higher education and a different one for technical and English-language colleges, and schools.

Higher education has also been divided into levels with undergraduate courses distinguished from masters and PhD degrees. A student from one country applying to enrol in a bachelor programme could face different visa conditions from someone from the same country wanting to undertake postgraduate studies.

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"The whole thing is based on the students' bona fides: will they conform to the visa conditions of not overstaying, of not working full-time and of attending the course at the times required," the spokeswoman said.