Australia’s vice-chancellors are not usually given to wild alarmist cries but the imminent collapse of the export education market has caused consternation in their ranks. With the slump in the number of Indian student enrolments spreading to other nationalities, and especially to China, vice-chancellors have urged the federal government to take immediate action to protect an industry said to be worth $18 billion a year to the national economy.
News that the nation’s biggest university, Monash, was facing a $45 million drop in revenue next year “because of a 10 per cent fall in overseas student numbers” and with the prospect 300 jobs being slashed, has added to the sector’s sense of alarm.
In an email to staff, Monash vice-chancellor Professor Ed Byrne said fees from foreign students accounted for more than 20% of the university’s annual income, “so the drop will have a significant adverse impact upon the university’s budget”.
Students from India constitute the second biggest group of foreign fee-payers in Australian higher education but are still well behind those from China. In August, 77,000 mainland Chinese were on campus here compared with 21,100 Indians. Last year, universities enrolled 64,000 Chinese – a 20% rise on 2008 – while the 27,500 Indian enrolments represented a mere 0.7% increase except that now their numbers have started falling.
More than falling, Byrne says flatly that the Indian market “has dried up altogether” for Australian universities. He puts the blame on the widespread coverage in India of the spate of attacks on students in Melbourne and Sydney.
But far worse for Monash and other universities is the downturn in the China market. If that becomes a rout like India, some universities could face bankruptcy. Yet they have been warned for years their reliance on foreign student fee income could place many in financial danger.
Few suspected, though, the federal government would cut back on the market’s continued rapid expansion by restricting student visas and curbing skilled migration. Responding to widespread public concern about increasing migrant numbers before the election, the government announced changes to its skilled migration program in April and imposed strict new regulations on foreign students applying for permanent residency.
Tens of thousands of overseas students have used Australia’s education system to gain easy access to the workforce, with dodgy vocational education colleges springing up to offer dubious courses in cooking and hairdressing.
The government crackdown forced dozens of the colleges to shut and now universities have been caught up as well in what vice-chancellors are calling “collateral damage”. Once Indian students realised that studying for an Australian business or commerce degree –the most popular courses – no longer offered them automatic permanent residency, they began turning away in droves.
Byrne says the situation is different for students from China and other south-east Asian countries – Monash’s main markets. They not only face outlaying far more to study here than ever before because of the rising Australian dollar but must now also prove they can afford to meet the costs of three years living expenses in Australia and three years tuition fees as well.
“The view from our agents in south-east Asia is that this is the big factor [in the downturn in student visa applications], plus the fact that Canada, the UK and US are far more active in recruiting,” Byrne says.
*Tomorrow: tracking the downturn across the higher education sector.
Monash vc Byrne *may* be right in predicting that demand for enrolment in Australian from India ‘has dried up altogether’ but that wont affect Monash much since only 3% of its international students are from India.
19% of Monash’s international students are from the Peoples’ Republic of China. Even if Monash enrolled no new PRC student in 2011 that would not become a 19% fall in its international student enrolments since two-thirds of Monash’s students who are currently enrolled in level 1 and 2 would reenrol next year to complete their degree.
It’s not that the universities didn’t know that this wasn’t coming, and it’s not that breaking the virtually automatic link between permanent residency and education isn’t sound in principle. It’s that the government has forced universities to increasingly rely on international students because of the size and model of education funding. The political drive is to enrol increasing numbers of students but to pay decreasing amounts for this, forcing universities to rely on international students to subsidise the cost of education. This was always unhealthy and was recognised to be so, but the options to do otherwise are simply limited.
But the universities that are complaining most shrilly about the fall in international student enrolments don’t spend their surplus from international student fees on educating domestic students but on research, mostly in engineering and the experimental and clinical sciences.
Let’ just focus on the elephant in the room rather than self flagellating.
Let’s assume that at end of 2008, international student fees for Year 1 Mathematics at a reputable Australian University were A$20,000 per annum. That equated to $US14000 at the time.
Now let’s assume no fee increase in 2009 i.e. still A$20,000 at that same university. However, now the cost for the international student is US$18000 due to the rise in the A$. That is a massive 29% increase in fees, without accommodation costs.
And what about this year 2010! Let’s say the Year 1 Maths fees still do not rise and remain A$20,000. The cost now in US dollars is close to parity i.e. US$20,000. Assume again that accommodation is also going to jump by an equivalent if not greater amount.
Forget about quality of education, safety of foreign students or even antipathy over the cricket. The truth of the matter is that the collapse in foreign student numbers is the economic outcome of holding the line on the A$ against collapsing world fiat currencies. Are we crazy or what! Very few Indian parents would be willing to stump up another 20000 per annum for the pleasure of studying in Australia when they can access the US, Canada and UK systems for cheaper.
While we continue to hold our currency at this unsustainable level, we will see ever increasing numbers of students head off to the USA, UK, Canada and NZ.
Given the value of the international education industry to Australia, we need to immediately stop subsidizing the rest of the Anglo American Empire. As it is, almost all commodities we sell are being purchased in US dollars so we are losing out massively in A$ terms across the board due to our exchange rate. Good for travelers but bad for the country. China refuses to allow itself to be pushed around like this so why the heck would we!
Do the Maths!
@Richard: Yes, I was wondering when the Aussie dollar’s strength would get raised. Well done. As for the government closing a loophole, well, that happens. The VC’s trying to dump guilt on us for racism isn’t going to work.