(AUSTRALIA) — Australia pushed student visa refusal rates for South Asian applicants to some of the highest levels on record in early 2026, with nearly half or more of applicants from several major markets rejected as demand from the region kept rising.

Department of Home Affairs figures for February 2026 showed refusal rates of 60.2% to 65% for Nepal, 47.2% to 51% for Bangladesh, 40% for India, 38% for Sri Lanka and 36% for Bhutan. In March, the pressure intensified for two of the region’s biggest cohorts: India’s grant rate fell to 49%, equal to a 51% refusal rate, while Nepal’s grant rate dropped to 27%, equal to a 73% refusal rate.

Those figures place South Asian applicants far above the national average for refusals and far above the rates faced by Chinese applicants. Chinese student visa applicants recorded refusal rates of only 3% to 3.5%.

Across all markets, Australia’s overall student visa refusal rate hit 32.5% in February, the highest monthly rate in 21 years. In March, the overall grant rate fell to 59%, the worst monthly grant rate on record.

The rise in refusals follows a rule change that hit Indian applicants at the start of the year. Australia moved India from Evidence Level 2 to Level 3 under the Simplified Student Visa Framework in January 2026, requiring more extensive financial documentation and stronger proof of genuine study intent.

That shift carries practical consequences for a large share of the regional market. A student visa application from India now faces tighter scrutiny on money, documents and the stated reasons for study, at the same time that refusal rates have climbed across South Asia.

The Department of Home Affairs identified financial capacity as one of the “key refusal drivers” for South Asian applications. Staff examined whether applicants had “genuine access to funds,” with particular attention on applicants carrying “large loans with limited capacity for repayments.”

Financial evidence has therefore moved to the center of decision-making for many South Asian applicants. The test is not limited to whether funds appear on paper; officials are also examining whether those funds are accessible and whether repayment claims stand up against the size of the borrowing.

Even with refusal rates climbing, application numbers from the region continued to rise. Indian applications increased 36% year-on-year, Bangladesh applications rose 51%, and Nepal applications jumped 91%.

That combination, rising demand and steeper refusal rates, points to a sharper divide between interest in Australian study and the government’s threshold for approval. South Asian applicants remain a large and active part of the market, but the bar on evidence has clearly risen for several countries.

Country-level figures show how uneven that pressure has become. In February 2026, India’s 40% refusal rate already stood high for a market of its size, yet Nepal and Bangladesh were worse, at 60.2% to 65% and 47.2% to 51%. Sri Lanka and Bhutan also posted elevated rates at 38% and 36%, putting every South Asian market listed well above the refusal level recorded for Chinese applicants.

March sharpened that trend rather than reversing it. India moved from a 40% refusal rate in February to a grant rate of 49% in March, while Nepal’s grant rate sank to 27%, leaving nearly three out of four applicants refused that month.

The gap between South Asian applicants and Chinese applicants also stands out because it appears inside the same national system and over the same period. A refusal range of 3% to 3.5% for Chinese applicants sits far from the rates recorded for Nepal, Bangladesh, India, Sri Lanka and Bhutan, suggesting that Australia’s visa settings and risk assessments are not falling evenly across source countries.

Policy changes explain part of that divide, at least for India. The move to Evidence Level 3 means applicants must present broader financial records and stronger proof that their intention is genuine study. That turns the application into a more document-heavy process and raises the cost of weak preparation, especially where funding depends on debt.

Officials’ language on refusal drivers shows why loans have become a flashpoint. The department’s reference to “genuine access to funds” and “large loans with limited capacity for repayments” indicates that the issue is not borrowing alone, but whether the borrowing appears credible against the applicant’s means and study plan.

Applicants preparing new cases face a narrower margin for error than they did before January 2026. Evidence on financial capacity and genuine study intent now carries added weight, particularly for Indian students under Level 3 and for other South Asian cohorts already posting high refusal rates.

Strong demand, however, has not disappeared. The year-on-year increases of 36% from India, 51% from Bangladesh and 91% from Nepal show that interest in Australian education remains strong even as refusal rates rise.

That leaves policymakers with two facts moving in opposite directions. More people are applying from South Asia, but a large share are not getting through, and in some markets the refusal rate now sits above half.

Clearer guidance on financial requirements and on how officials assess genuine study intent would carry particular weight in that setting. Until then, refusal rates, documentation rules and evidence settings are likely to remain the defining numbers for South Asian applicants weighing an Australian student visa.