This article analyses some ways in which racialising discourses around refugees interact with the spatial and social dynamics of marketised schooling. It identifies conflicting discourses that contribute to the polarisation of school social composition and resourcing in the Australian state of Victoria. Media narratives around "ethnic" gangs contribute to wider discourses surrounding working-class neighbourhoods and schools as dangerous and violent "hotspots." At the same time, some elite private schools discursively produce themselves as providing a ladder of opportunity for talented and deserving refugee youth, offering volunteer tutoring and scholarships. These discourses work together to legitimate the funding of socially exclusive sites at twice the rate of the schools that cater to virtually all refugee-background students. The article draws on critical discourse analysis, based on media reporting on refugees, and interviews with parents selecting a secondary school for their children. The findings have implications for the management of school choice as a policy framework, suggesting that its exclusionary effects are heightened in the context of intense media and political attention to refugees as racialised subjects.