Ministers want to cut the number of overseas students entering Britain by tens of thousands.
More than 362,000 were allowed to study here in the year to June, an increase of 35 per cent on the previous year.
Figures show that one in five foreign students is still in Britain five years after arrival, leading to concerns that student visas are being exploited as an easy migration route.
Home Office research shows half the foreign students who arrive each year are not studying degrees, but a range of lesser qualifications such as A-levels and even GCSEs.
Damian Green, the Immigration Minister, will today outline plans as part of an overhaul of migration policy.
Despite ruling out a cap on total foreign student numbers, Mr Green is expected to say the system will be tightened. Options could include limiting visas to those studying degree courses or to certain institutions.
Tens of thousands of foreign students have entered "lower tier" colleges, where it is easier to gain places.
Mr Green said it was "transparently clear" that the immigration system did not work. He said: "I want a student visa system which encourages the entry of good students to highly trusted institutions, but which scrutinises much more closely or cuts out entirely those who are less beneficial to this country."
Mr Green said that every other immigration route, including giving visas to foreign wives or husbands, must be reviewed and tightened.
David Cameron has promised to bring net migration, the balance between those leaving and those arriving, down to the "tens of thousands".
Figures last week showed it rose by a fifth last year to 196,000. The main driver was a sharp increase in the number of foreign students, to more than 360,000.
Research for the Home Office shows that in 2004, around 186,000 students were granted visas and 21 per cent of them were still here in 2009, meaning they had been able to switch to other routes such as work permits or marriage, paving the way for them to settle here permanently.
And that is only those known to immigration officials. Tens of thousands more may have simply overstayed their visa and disappeared.
Earlier this year, it was estimated that more than one in 10 foreign students was arriving in Britain through bogus or suspect colleges.
--By Tom Whitehead,06 Sep 2010