Sydney  - Australia's wine industry is a victim of its own success, with export volume up and earnings down as the nation goes gangbusters producing cheap plonk.

It's similar with higher education, where enrolments are rising yet the extra growth is at the cheaper end of the market.

Foreign students are still drawn by the excellence of the country's 38 universities but the pull is also to the visas available to those attending private colleges and completing easy vocational courses like cookery.

Many worry about the sustainability of a sector that has enrolled almost half a million foreign students and which is the third largest export earner after coal and iron ore.

Among the worriers is Canberra-based academic Clive Hamilton, who predicts youngsters will start going to the United States and other rival providers "because the universities have been exploiting their reputations that have been built up over the decades and allowing standards to be eroded."

The greatest concern is not about the top of the market but about the private colleges offering vocational courses that come with a promise of a pathway to a new life in Australia. The crass commercialism in one part of the sector is bound to tarnish the reputation of the whole.

Since 2001 the government has allowed foreign students to apply for permanent residency if they complete certain vocational courses in skills it lists as being in short supply domestically. Previously, there was no preferential treatment for those studying in Australia and the rule was that all students had to return home before applying for permanent residency.

Canny operators spotted a marvelous marketing opportunity and began touting courses that were certain to deliver a visa.

"Regrettably the cheap and dirty route to residency has been encouraged and promoted by some offshore education agents and institutions," said Glenn Withers, head of lobby group Universities Australia.

But it's not sharp operators that he should be blaming but the government that cleared for them that "cheap and dirty route to residency." Those dubbed visa vultures are creatures of Canberra's own making.

Last year, when the global economic downturn hit and the government responded by cutting the migrant intake, tens of thousands of foreign students looked set to miss out on residency.

There was an outcry among those who had paid up-front for courses that would now not deliver a visa. The response was a review of the international student sector and help for those stranded on vocational courses that would lead them nowhere.

The government also declared that it wanted to break the link between diplomas and visas.

"We want to make it very clear that the education pathway is very different from the migration pathway," said Graham Cook, chairman of a taskforce into the international student sector.

All 1,300 private colleges will have to apply for re-accreditation. "They cannot offer entry into Australia under the guise of providing education," Cook said.

The government wants to clean up the sector rather than remake it.

Foreign students will still be allowed to be in paid employment for up to 20 hours a week. There will still be a provision that, in totting up the points for a permanent residency visa, a qualification earned in Australia will count for more than one earned abroad. And there will still be areas of study that are more likely to lead to a visa than others.

The government doesn't want to get too tough on foreign students because they deliver 15 billion Australian dollars (12 billion US dollars) in annual revenues.

There are 3 million foreign students enrolled around the world and countries are competing for them.

"Consumers are becoming increasingly knowledgeable about the global options they have got and in this context relative costs are going to come into play," said Melbourne University academic Lesleyanne Hawthorne. "The level of future competition for students will be unprecedented."

Professor Hawthorne also highlighted the link between accepting foreign students and filling skills shortages, noting that fertility rates in the rich world were low and countries other than Australia were keen for their foreign students to stay on and become citizens. (dpa)