Auditor General of Canada Flags 98% Student Direct Stream Approvals at IRCC

(CANADA) — Auditor General Karen Hogan said Canada approved 98% of Indian student visa applications under the Student Direct Stream in 2024 despite internal fraud warnings, as her March 23, 2026 audit faulted Immigration, Refugees and Citizenship Canada for failing to act on risk information already in its possession.

Hogan’s report on the international student program found approval rates for Indian students in the fast-track Student Direct Stream, or SDS, rose from 61% in 2022 to 98% in 2024, even though internal warnings in August 2023 said the program “was being targeted by non-genuine students.”

“What is concerning for me is that the department isn’t acting on the information that it has. Their own risk process identified these 800 cases, and then no action was taken. This is a serious concern because there was no alert on these individuals’ immigration files,” Hogan said on March 23, 2026.

Her findings add pressure on Immigration, Refugees and Citizenship Canada at a time when Canada has tightened scrutiny of international students, ended the Student Direct Stream in late 2024 and raised financial proof requirements for new applicants.

The audit, tabled March 23, 2026 by the Auditor General of Canada, said 800 study permits issued between 2018 and 2023 were later found to have used fraudulent documents or “ghost” institutions. Of those 800 individuals, 92% were subsequently approved for or were awaiting decisions on further immigration status, including Permanent Residency, because the department did not flag their files.

That gap sat alongside a wider enforcement strain. Over 153,000 students were flagged for potential non-compliance in 2023–2024, including concerns such as not attending classes, but the department had funding to investigate only 4,000 cases.

India’s Exception in the Risk Pattern

The audit described India as an exception to the department’s usual risk pattern. Countries seen as carrying a high risk of fraudulent applications generally recorded low approval rates, but Indian applicants in the Student Direct Stream moved in the opposite direction as approvals climbed sharply.

That contrast now carries policy and political weight because the Student Direct Stream was once promoted as a faster route for students from selected countries, including India. By 2024, however, the same program drew internal warnings about fraud while approval rates for Indian applicants hit their highest level.

Immigration Minister Lena Diab acknowledged the report and said reforms were already under way. “We thank the Auditor General for her report. The early audit cannot offer a complete picture of these reforms. It can inform, though, what we do as a go-forward basis. We will be streamlining anyone that is flagged and we will be information sharing with CBSA [Canada Border Services Agency],” Diab said on March 23, 2026.

Her remarks pointed to a response centered on screening and information sharing with the Canada Border Services Agency. The audit itself focused on a narrower problem: officials had already identified risks in some files and still did not act.

Impact on Indian Students and New Rules

The report’s timing matters for Indian students, who made up a large share of applicants under the Student Direct Stream before Canada shut it down in late 2024. The government discontinued SDS as it sought to address integrity gaps and “diversify” the student pool.

After that shift, refusal rates rose sharply. By August 2025, the rejection rate for Indian study permits in Canada had climbed to 74%, up from 32% in 2023.

That reversal has changed the experience for applicants who once relied on fast decisions through SDS. Genuine students now face processing times that have increased from 30 to 54+ days, along with higher proof of funds requirements set at CAD 20,635 for the 2026 intake.

Those changes landed as the department continued to grapple with people already in Canada whose status had lapsed. The audit found 39,500 people whose study permits expired in 2024 had no status to remain in Canada, while only about 40% were confirmed to have actually left the country.

For policymakers, that combination of fraud findings, limited enforcement capacity and rising out-of-status numbers has reshaped the debate around student visas. For applicants, it has meant a system that now moves more slowly and demands more money upfront.

Broader North American Enforcement Pressure

The Canadian findings also sit within a wider North American pattern of tougher Immigration controls for students and other temporary entrants. During the same period, U.S. data showed a 41% rejection rate for Indian F-1 visa applications in FY 2024.

Separate U.S. enforcement action this month highlighted visa fraud in another context. On March 13, 2026, the U.S. Department of Justice announced charges against 11 Indian nationals in Massachusetts in a scheme involving staged armed robberies tied to immigration applications.

“Eleven Indian nationals have been charged in connection with a conspiracy to carry out staged armed robberies. for the purpose of allowing store clerks to falsely claim they were crime victims on immigration applications [U-Visas],” the U.S. Attorney’s Office, District of Massachusetts, said in a Justice Department press release.

That U.S. case did not concern Canada’s student system or F-1 visa adjudications directly, but it added to official attention on document integrity and fraud involving immigration benefits. In Canada, the Auditor General’s report centered not on a lack of warning signs but on a failure to use them.

Audit Findings and Enforcement Limits

Hogan’s audit said internal risk processes had already identified the 800 fraudulent cases. Yet those alerts did not follow the applicants through later stages of the immigration system, leaving many able to secure or seek additional status.

The consequences reach beyond enforcement statistics. When files carrying fraud indicators move forward without flags, refusal rates can later spike across the broader pool as officials react with tighter screening. That leaves legitimate applicants from India facing more questions, longer waits and a steeper financial threshold than they faced when the Student Direct Stream was still in place.

Immigration, Refugees and Citizenship Canada has also had to manage volume as confidence in oversight came under strain. More than 153,000 possible non-compliance cases in 2023–2024 far exceeded the 4,000 investigations the department could fund, exposing the gap between the number of cases identified and the number it could actually pursue.

Those numbers help explain why the Auditor General of Canada framed the issue as one of integrity and follow-through rather than isolated fraud. Her criticism was aimed at departmental decisions after risks had already been detected.

The audit’s findings may also sharpen scrutiny of how Canada balances speed and integrity in student processing. The Student Direct Stream had offered faster handling for applicants who met set criteria, and its high approval rates for India became one of its defining features before the program’s cancellation.

In practice, the end of SDS has produced a system with fewer shortcuts and more checks. August 2025 refusal rates showed how abruptly the climate changed for Indian applicants once that fast-track route disappeared and officials tightened review.

The effect on colleges, universities and students is bound up with timing as much as policy. A processing increase from 30 to 54+ days can affect admission plans, housing decisions and travel schedules, while CAD 20,635 in financial proof for the 2026 intake raises the cost of even applying with confidence.

Canada’s approach now stands in sharper contrast with the period when SDS approvals for Indian students rose despite fraud concerns inside the department. The audit suggests that what once looked like efficiency also masked weak controls.

Diab said the government would move flagged cases through a more streamlined process and share information with CBSA. That response points to closer coordination between screening and enforcement, though Hogan’s report will keep attention on how quickly those changes take hold.

For Indian students weighing Canada against the United States, the comparison has become harder. Canada’s August 2025 rejection rate for Indian study permits stood at 74%, while U.S. figures showed a 41% rejection rate for Indian F-1 visa applications in FY 2024.

The issue is no longer confined to the rise and fall of the Student Direct Stream. It now touches the credibility of Canada’s international student system, the department’s ability to track compliance and the cost borne by genuine applicants when controls tighten after years of weak follow-through.

Hogan’s warning captured that central point. “What is concerning for me is that the department isn’t acting on the information that it has,” she said.