Migrants applying to stay in Britain after studying at university will be subject to compulsory English exams.
Thanks to a new Graduate Route scheme, foreign students can stay and work in Britain for two years after their studies.
However, they are often paid less than the minimum wage, reports The Sun.
However, Foreign Secretary David Cameron has written to the Prime Minister proposing a number of measures to dilute the situation.
Universities and colleges with high dropout rates will face the loss of the ability to recruit foreign students.
While agencies attempting to lure foreign students away from their studies will also be targeted by the Home Office, reports The Sun.
However, the Home Office plans do not include the stricter restrictions on top universities.
Government sources told the newspaper they wanted the “best and brightest” students to stay in Britain.
However, they said a loophole has created a large number of graduates with poor language skills.
The new plan will anger Tory MPs who wanted tougher measures against students.
New figures from the Office for National Statistics (ONS) on Thursday are expected to show extremely high immigration rates.
However, the Home Office is expected to say these figures come before the latest immigration policy.
It includes a ban on caregivers taking dependents and an increase in the salary threshold for skilled workers to £38,000.