A report by the department says fraud is a significant problem among mainland students applying for Australian visas.

The report names a dozen mainland provinces it says constitute the highest risk for fraudulent student applications.

They include Xinjiang, Fujian, Neimenggu, Hainan, Tianjin and Guangxi. In Beijing, 27 per cent of student visa applications in the past 12 months were rejected because of false documentation.

In a majority of cases, the students were represented by an agent.

The department says there was anecdotal evidence that some agents also provided immigration advice and assistance in contravention of the Migration Act.

Accusations levelled against agents include charging unreasonably high fees, lodging applications supported by false academic records, financial statements and employment histories, and obtaining visas to bring non-genuine students into Australia to work in brothels.

Australian immigration officials in Hong Kong, Hanoi and Phnom Penh say they receive many complaints about agents charging excessive fees.

The report says more than 3,000 unregistered education agents operating offshore now lodge applications on behalf of prospective students.

A review of the student visa system two years ago called for foreign agents to be registered but this has not yet occurred.

Although tough new regulations to control unscrupulous agents came into effect in July, these apply only to those working in Australia.

A key role of education agents is to identify prospective students for Australian schools, English language colleges, universities and technical colleges.

Some 1,200 Australian education institutions are registered with the Immigration Department and they offer courses to 300,000 foreigners. Most employ agents to recruit students.

The report says there could be as many as 10,000 agents worldwide, including possibly 2,000 on the mainland. Yet fewer than 300 of the latter are registered with the Ministry of Education in Beijing.

The biggest proportion of Australian visas issued are to mainland students, followed by those from Korea, Japan, Indonesia, Hong Kong and Malaysia.

Among proposals to control agent behaviour, the report says the current registration scheme for Australian agents could be extended to include those offshore.

But as criminal penalities could not be applied, it calls for a range of administrative sanctions such as banning agents from lodging applications.

In a first stage, the report proposes a monitoring scheme in which education institutions would be told of any concerns regarding their agents.

It says the institutions could then 'dissociate themselves from the particular agent if the concern is found to be valid'.

'The biggest advantage to registered agents would be the ability to advertise the fact, giving them legitimacy in providing advice,' the report states.

'It is expected that the costs of registration would be small in comparison with the increased profit resulting from registration.'