Overseas students may present Australian university graduates with greater competition for jobs under a plan proposed by the Federal Government.
The immigration minister, Amanda Vanstone, has released an independent study of the skilled-migration system.
The study will form the basis for changes set to begin later this year.
The study has found skilled migrants are highly successful in finding jobs but several reforms are needed.
It recommends overseas students be given temporary entry visas allowing them to stay in Australia for two years with full work rights after they finish their studies.
But they must undertake more intensive English studies, a professional year of vocational studies or a year's full-time work experience to get permanent status.