When courses finish they will have to leave the country before reapplying to return for a job. Ministers say the new rules, which will apply to all those from outside the European Union, will stop colleges being used as a 'back door to a British work visa'.
Official figures show that 121,000 non-EU students entered the UK in the 12 months to June last year, but only 51,000 left – a net influx of 70,000.
The government estimates that the number of foreign students coming to the UK will rise by more than 6 per cent a year up to 2020. Home Secretary Theresa May has taken action against 870 bogus colleges, banning them from taking foreign students.
But the Conservatives have vowed to go further, without the Lib Dems in power to force the rules to be watered down.
They want to stop student visas being used as an easy way to enter the UK before getting a job and claiming benefits.
Under the new rules, non-EU students will be denied the right to work while in the UK and will not be able to apply for a visa extension when their course finishes.
Students will have to leave the country before applying to return under a work visa. The length of stay is also expected to be cut to two years when the plans are unveiled this week.
Immigration Minister James Brokenshire said it was 'part of our plan to control immigration for the benefit of Britain'.
'Immigration offenders want to sell illegal access to the UK jobs market and there are plenty of people willing to buy.
'Hard-working taxpayers who are helping to pay for publicly funded colleges expect them to be providing topclass education, not a back door to a British work visa.'
Business Secretary Sajid Javid signaled on Friday that the government would stop the education system being abused by immigrants.
He said: 'What we need to make sure – and we do have this – is that our immigration system allows those from abroad that want to come to Britain to study in our world-class universities, our fantastic colleges to come here,' he told the Today programme.
'But we've also got to have a system that doesn't allow any abuse when people are using the right to study as a way to achieve settlement in Britain.
'So we've got to break the link and make sure it's focused on people who want to study and then, once they've had their studies and completed that, then they leave.'
But universities have warned that any clampdown could damage the sector and business leaders are also wary of the move, warning it could rob Britain of vital skills.
Seamus Nevin, head of employment and skills at the Institute of Directors, said: 'The Business Secretary's proposals to eject foreign students after graduation are misguided and would damage the British education system, our economy and global influence.
'Britain already makes it difficult and artificially expensive for international students to enter and stay, and now these proposals would eject them ignominiously when their studies are finished.
'Restricting talented workers from staying on in the UK would damage business and lead to a loss of important skills.
'Shutting the door to highly-trained international graduates at a time when our economy needs them most would be hugely damaging for UK businesses.
'In the interests our education sector, our businesses, and our international standing, the Business Secretary should reconsider this proposal.'
-UK Daily Mail