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At least you've considered a solution which is more than can be said of some of the other critics of present policy who contribute to this thread.
A western would standard education would in itself be a enough of a product for people smugglers to sell and would also encourage separation of families (children first, parents later).
There's no easy solutions to this and without a universal approach, a product remains available for people smugglers to pedal.
The final result is still offshore settlement with no ability to remain in Australia or for family reunion in Australia. If you don't want them setting foot in this country at all, then the children could be released and educated in the country where they are being processed.