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Australia: International students dollar woes

EducationWorld July 2020 | International News

The abrupt halt to international travel is more painful for Australian universities than their counterparts in other English-speaking countries, because they lean more heavily on revenue from foreign students. More than 440,000 such students enrolled in Australian institutes of higher education in 2019. At the last count, they took up roughly 30 percent of capacity. Almost 40 percent of them came from a single country, China.

Foreign students are lucrative. In 2018, they brought in almost A$9 billion (Rs.46,784 crore) in revenue — just over a quarter of all university funding, and far more per head than local students bring in through fees and government subsidies. The boom turned education into Australia’s fourth-biggest export, behind coal, iron ore and natural gas. It funded world-class research centres, shiny new learning facilities and vast collections of art. Vice chancellors’ pay packets swelled (in big universities they rake in well over Rs.5.2 crore equivalent). Campuses bulged to sizes, as an academic at La Trobe University puts it, “matched only by the epic institutions in India and China”.

For years, this has been the subject of heated political debate. Australian universities say they were forced to woo foreign students because the government does not give them enough money to cover their rising costs. Comments Michael Spence, vice chancellor of the University of Sydney: “The education of domestic students doesn’t break even.” If Australia is “more dependent on foreign student fees than comparable systems around the world, that’s a decision successive governments have made,” he argues.

Some in the current conservative coalition government retort that universities have brought the crisis on themselves. They “bet big on the international-student dollar” and “have become badly over-exposed”, James Paterson, a senator, recently declared. Vice chancellors have “privatised profits” from foreign students, “building Taj Mahals to themselves”, a conservative commentator complains.

Even some of those employed by universities are critical. “It wasn’t a Ponzi scheme,” says the academic at La Trobe, “but it’s in that ballpark.” Universities Australia, which represents the industry, is not sure exactly how many foreign students it has lost. The University of Sydney has fallen 17 percent short of its enrolment target for 2020, according to Spence, and now faces a budget shortfall of A$470 million (Rs.2,444 crore). Across the industry, revenue could fall by A$3-4.6 billion, according to Universities Australia, putting 21,000 jobs at risk, many of them in research.

So far, the government has been disinclined to help. It says it will still fund the places of domestic students, even if they drop out rather than embrace online learning. But it has excluded universities from its A$60 billion (Rs.313,340 crore) wage-subsidy scheme JobKeeper. Dan Tehan, the education minister, has called for “a greater focus on domestic students”.

Few seem to think universities will fail. Smaller, regional institutions are in greatest danger, but since they are an important source of jobs, state and federal governments might be persuaded to prop them up. They will, however, have to shrink to survive. Universities will be “smaller in staffing and smaller in revenue”, says John Dewar, La Trobe’s vice chancellor. There could be “a massive change in the types of courses they offer”, predicts another academic. That seems to be just what the government wants.

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