OFFSHORE visa applications from overseas students have plunged over a third in another blow to Australia's $18b export education industry.

Student visa applications from offshore have plummeted 36 per cent compared to the same time last year, Senate estimates heard last week.

Combined offshore and onshore applications were down 19 per cent overall, Immigration department acting first assistant secretary, Kruno Kukoc told Estimates.

Onshore student visa applications increased 20 per cent, holding up the combined overall application rate, he said.

"(This) indicates that many students onshore are actually changing courses or enrolling in other courses," he said.

Universities Australia international spokeswoman, Jennie Lang, told the HES the downturn in offshore visa applications "was higher than expected."

Australia had been impacted by a confluence of developments akin to a `perfect storm', Ms Lang said.

But cut-backs in funding to UK universities, and the haemorrhaging of staff and programs from some top US state universities meant Australia was still the best education destination, she said.

A spokesman for IDP - the country's largest education agency -yesterday said "it hadn't seen a drop off on that scale, but the situation is still very serious.

"Our view is that we may well see a student intake in semester one next year nearly 20 per cent below this years," the spokesman said.

Mr Kukoc told Estimates that Australia's skilled migration program had been "abused and exploited" by canny operators who had linked education to permanent residency.

But the assumption by students and operators that a student visa was an easy pathway to residency had now been "largely stopped," he said.

Offshore agents who had been marketing Australian educational products with a residency angle "were getting the message" that the student visa program was for educational outcomes, he said.

Overseas students who gained a solid Australian education would be able to follow a certain career path and get a skilled labour market outcome "whether in Australia or overseas in another country", he said.

Tertiary education minister, Chris Evans, told Estimates that Australia had a good reputation for quality in higher education and some very good quality vocational education providers.

But "a lot of bottom feeders" had undercut the higher education market with the "destructive promise" that a vocational course and permanent residency would lead to a higher education course without the same fees and charges, Senator Evans said.

Austrade chief executive, Peter Grey, told Estimates that Austrade was working with the industry to develop a new revised strategy for "the pointy end overseas" that supported the education export industry.