A Brisbane-based international college is suing the Federal Government over changes to migration laws that it says are making business impossible.

International education is Australia's third largest export industry worth an estimated $18 billion a year, but Kelly Colleges says the Immigration Department is causing serious damage to the sector.

However, other experts say the changes are simply an attempt by the Government to clean up the sector.

Kelly Colleges has been running for 35 years, teaching English and business to students from 17 different countries.

Managing director Natasha Mayrseidl says she has seen a dramatic drop in business in the past year.

"I've travelled overseas. I've spoken to the parents of children in China, Korea, Japan, Europe. They're not choosing Australia," she said.

"It's not because of the immediate theory about violence against students. It's not the things that people think. It's because the visa is so difficult to obtain."

Ms Mayrseidl blames the Immigration Department.

"What is hurting the international education sector is the Department of Immigration and the assessment level changes they've been implementing in the last six or seven months," she said.

"They've been making a lot of decisions on the 11th hour. They haven't consulted appropriately with industry.

"It leaves people like myself to find out, for example, last Thursday over something that will majorly impact my business and it's going to begin from January. So there's no lead time. There's a lack of understanding of our sector."

Legal action

Kelly Colleges is this week starting legal action against the Government over changes announced last week to a part of the Migration Regulations Act called Instrument 10-69.

This change affects how different courses are classified under different classes of student visas.

Ms Mayrseidl says the changes mean students attending smaller schools like Kelly Colleges now have to jump through more immigration and visa hoops.

"International students, when they come to Australia, they're assessed on different levels according to where they come from but also according to what course they're studying in," she said.

"Instrument 10-69 has basically discriminated against smaller education providers and given the larger education providers a benefit."

But Dennis Murray, executive director of the International Education Association of Australia, says that is not correct.

"My understanding is that it was actually a reversion to something that previously existed and the Immigration Department inadvertently gazetted or made a rule change that was contrary to something that was already in place," he said.

"They've simply corrected that."

Better regulation

Mr Murray says the Government is simply trying to clean up the sector.

"The Government's attempts to get improvements for international education are working in a number of ways, including through changes to the visa rules," Mr Murray said.

"But some of the changes have had unforseen consequences which are affecting the sector and are of some concern.

"But these concerns have been taken up with the Government and we've got a commitment to consult the sector more effectively over the critical changes and the challenges the sector is currently facing."

Laurie Berg, an immigration law lecturer at the University of Technology, Sydney, agrees.

"These reforms, started, I think, under the Rudd government and continued under the Gillard Government, are designed to ensure international students in Australia receive a quality education," he said.

"They also remove the incentives for students to take a course in which they have no intention of working just to stay in Australia long term.

"The idea is there are benefits both in terms of the standard of education that's offered to international students and providing more coherent regulation of the sector."

'Knee-jerk reaction'

But Ms Mayrseidl says she knows of many colleges affected by the changes and will press ahead with the legal action.

"I'm asking the Government to sit down and speak with people like me who own businesses and who know the students better than anyone else and who know what the industry actually needs, instead of making knee-jerk reaction changes to the industry and damaging businesses like mine," she said.

"I've got 50 employees working for me who depend on me to pay their mortgages, their children's tuition fees.

"It's unconscionable what they're doing, so I'm actually going to claim damages for what they've done."

In a statement, a spokeswoman for Immigration Minister Chris Bowen said key bodies were consulted before new migration legislation changes were made.

She says these changes will only affect a small proportion of students, adding the department is not in a position to comment on legal matters.