Monash University demographer Bob Birrell, who has campaigned against linking diplomas with visas, has warned of a backlash from Indian students who feel they have been duped by the Australian government now that visas are harder to get.

'It's unlikely they are going to leave Australia without a fight,' he said.

Andrew Smith, from the Australian Council for Private Training and Education, said the government should honour the implicit contract it had with students.

'They came here for an education,' Smith said. 'We set up an expectation that there could be a permanent residency outcome. That should be delivered.'

To try to head off a confrontation, Education Minister Julia Gillard invited foreign students to discuss their concerns in Canberra in September.

'It is important that international students have an opportunity to discuss issues affecting their experience in Australia and to put forward ideas on how to address their concerns,' Gillard said in a statement.