Amid Spike in Foreign Student Applications, Iceland Seeks Tougher Immigration Rules

The Government of Iceland, led by Minister of Justice Þorbjörg Gunnlaugsdóttir, has introduced a draft bill proposing significant amendments to student residence permit rules, citing an eightfold increase in applications from certain non-EEA countries and concerns over misuse of the system.

The changes are intended to abolish Iceland's current "special rules" and harmonize its immigration framework with other Nordic countries, which generally have stricter requirements. The Minister stated the current student permit rules are among the "main weaknesses in immigration matters" in Iceland. Applications to the Directorate of Immigration for residence permits and citizenship almost doubled from 2020 to 2024.

Up to 55% more student permits have been granted in Iceland than in other Nordic countries since 2020, per capita. Applications for student permits have also increased significantly between 2024 and 2025, especially from certain countries outside the EEA. There are indications that student permits are being used as a way into the country without studying at an Icelandic university being the real purpose.

The bill includes, among other things, the following changes regarding student residence permits:

• Increased academic achievement requirements - Students will be required to demonstrate satisfactory academic achievement each time their residence permit is renewed. This is in line with practices in other Nordic countries. The bill also makes necessary changes to the arrangements for students to participate in employment during their studies.
• Stricter requirements after graduation - The length of a residence permit after graduation will be shortened to one year instead of three, and the condition for a residence permit is that the person concerned has completed a BA or a Master's or Doctoral degree. To prevent unreasonable applications for a study permit, a requirement will be made that students have completed at least a bachelor's degree. According to current law, a two-year study stay can provide the possibility of a total of four years of work permit with minor restrictions.
• Right to family reunification limited - Students' right to family reunification will be limited and aligned with the implementation in the Nordic countries. Permission for family reunification with parents over the age of 67 will be abolished, but none of the other Nordic countries define students' parents as immediate relatives.

The bill also proposes a significant administrative change to increase oversight and efficiency. The issuance of temporary work and residence permits will be streamlined under the Directorate of Immigration (Útlendingastofnun), which has previously been handled by the Directorate of Labour. The move aims to simplify the system for applicants and employers, improve oversight, and increase the ability for supervision and enforcement.