I have never seen or heard of this. Can you explain where you got this information? I know multiple people who got student visas with less than $500 in their account.
My bad, I should've been more specific. Most medical schools in Oz let you do what's called Streamlined Visa Processing (depends on the school). Those schools that do participate in that, usually, you have to show that you can pay for at least 1 year of tuition. However, 2 years of tuition applies for certain people applying from specific countries.
For your friends who had 500 dollars in their bank, I believe they were funded by other means (loans, etc). You would need to show proof that you have at least a year's worth of tuition, along with travel money, and money to cover living costs (which they specify a value, depending on the information you enter about your origins, etc on that page. For me it said 18,000 AUD).
This is where I got the information from, while individual universities also have some information on their websites (enter your info first though and scroll wayyy down to Financial Requirements):
http://www.border.gov.au/Trav/Visa-1/573-
"The department must be satisfied that an applicant, once in Australia, will have genuine access to the funds they claim to possess to cover the travel, tuition and living costs for themselves and their family members.
You must have enough money to pay for travel, tuition and living expenses for yourself, your partner and your dependent children for the duration of your stay in Australia.
You must:
- show proof that you can meet these financial requirements for the first 12 months of your stay in Australia.
Note: If you have completed 75 percent of your course and are applying for a subsequent student visa, you do not need to show your savings history.
- declare on your application that you can meet these financial requirements for the remainder of your stay in Australia."
Now, I'm not an immigrations officer or anything so I may be incorrect somewhere. But this is what I've found online.