Australian universities are taking a multibillion-dollar gamble with their “high-risk, high-reward” punt on the international student market.
And if they don’t wean themselves off their dependence on the massive revenue generated by those students, taxpayers may be left holding the bill, an explosive report on our university sector has argued.
The figures in the report by the Centre for Independent Studies (CIS) are an astonishing insight into Australia’s revenue over-dependence on international students and their dangerously high exposure to the Chinese market.
It also argues our universities are straying from their main mission of teaching Australian students, in pursuit of becoming “cash-cow” offshore campuses for Asia and south-east Asia.
Analysing data from seven leading universities [the universities of Melbourne, Sydney, New South Wales (UNSW), Adelaide and Brisbane, and Australian National University (ANU) and the University of Technology Sydney (UTS)], CIS found the seven were more dependent on fee-paying Chinese students than “just about any other universities in the English-speaking world”.
Among the report’s findings were:
- International student enrolments was 876,399 in December 2018 – or about 3.6 per cent of Australia’s population
- The total number of international higher education students has nearly doubled since 2007 (452,127) and more than trebled since 2002 (274,747)
- International students accounted for 26.7 per cent of all university students in 2017
- Chinese student course fees account for between 13 and 23 per cent of all revenue at the seven focus universities
- On a per capita basis, Australia has the highest number of international students worldwide with 1559 per 100,000 people, compared with the US (304), UK (653) and Canada (517)
- All five universities for which data was available draw more than 40 per cent of their business students from overseas. For Melbourne and Sydney, the figure is 66.9 per cent and in Sydney’s masters business programs, the figure is 87.2 per cent.
Report author Salvatore Babones, who is also an associate professor at the University of Sydney, said the financial risks of over-reliance on international students – and particularly on China – were significant.
The University of Sydney, for example, generated more than $500 million in revenue from Chinese student course fees, or about 23 per cent of total revenue.
Professor Babones said any political, economic, immigration or currency changes could prove “catastrophic” for the universities.
“A 25 per cent fall in Chinese student enrolment would likely hit annual revenues [at 2017 levels] by more than $100 million at each of Sydney, UNSW, and [probably] Melbourne,” he wrote.
“Across the seven focus universities as a whole, the revenue decline would be in the order of half a billion dollars. A 50 per cent fall – which is plausible if the Chinese government were to impose strict currency controls – would yield a billion-dollar revenue hit.”
Professor Babones said it was clear universities must reduce that risk by “dialling it [student numbers] down before an accident happens”, and learn to live with less.
Many universities had been too intent on “splashing big money on top researchers and bigger and better facilities” to boost their international rankings to build profile and, in turn, attract more foreign students.
While the focus on attracting international students was unhealthy, it had not restricted university access for domestic students, he noted.
“But Australian students no longer seem to be the focus of what we do … we [universities] are gearing up to be international education providers, like the NYU campus in Abu Dhabi or Duke University in Kunshan [China] and are increasingly straying from our core mission of teaching domestic students,” he said.
In a statement, the University of Sydney said “given China’s population, location within our region and ongoing strong growth in demand for high-quality international education, we anticipate continuing to attract Chinese students”.
The university also said it was trying to diversify its foreign student base, particularly from India and south-east Asia, and had seen an increase in students from the US, UK and Canada.
A two-line statement from the University of Melbourne read: “The University of Melbourne selects students from around the world based on academic merit, including Chinese citizens who have studied in many countries. Enrolments from international students continue to rise as the University of Melbourne is seen as a destination of choice.”