Australian universities are entering a “new era” where they can no longer rely on international education earnings to underwrite their solvency, according to former La Trobe University vice-chancellor John Dewar.
Professor Dewar, now a partner with advisory firm KordaMentha, told a visiting delegation of UK university administrators that a longstanding Australian practice of increasing overseas recruitment to cover rising costs was “being closed down”.
“Government is sort of revoking the license that universities have had, for two decades really, to just go out and recruit more international students,” he told the delegates, during a Sydney round table organised by edtech company TechnologyOne.
He said foreign student flows had enabled universities to keep their revenue ahead – albeit “sometimes only slightly ahead” – of costs, in a pattern that had prevailed since the mid-1990s but “came to an end” with the widespread deficits of 2022.
While that could have been a “one-off”, the government’s “almost unannounced change of approach” to visa approvals suggested otherwise.
“Vice-chancellors are telling me that the financial impact…is almost as bad as Covid, and in some cases, it’s worse. We’re dealing with another Covid. I’m…glad that I escaped the sector last year. I’m not sure I would have had the stomach to go through that whole process of managing a significant downturn in revenue.”
Professor Dewar said universities that had been “carrying serious deficits” would find that their anticipated returns to surplus were no longer on the cards. “They will start looking at their cash and saying, how long can we do this? I suspect they haven’t quite fully absorbed the revenue implications of the new regime because they don’t know yet.”
Federation University in regional Victoria is seeking redundancies from about 200 staff, or 15 per cent of its permanent workforce, after a post-Covid enrolment downturn was “exacerbated” by the “unexpected” change to student visa arrangements. In the UK, almost 60 universities have launched staff cutbacks as tightened immigration policy aggravates a funding crisis caused by rising costs, depressed domestic recruitment and a freeze on tuition fees.
Professor Dewar said the two sectors were experiencing changes that were “different in nature but similar in intent”, as their respective governments targeted international students to reduce migration.
“I’m not sure the politics will change,” he said. “It’s all expediency. It’s playing to the gallery. But it doesn’t feel to me like the gallery is going to want a different tune anytime soon.”
Sharon Harrison-Barker, secretary and registrar of the University of Hertfordshire, said the UK government was yet to “allow a university failure” but that could change.
“In the UK, now, the international students are paying for the education of home students,” she told the round table. “I can’t quite work out…how you maintain fees at £9,250 without the extra income coming from somewhere.”
Australian National University policy analyst Andrew Norton said the government’s apparent change of heart towards overseas students was likely to be sustained. He said that prior to the “distraction” of the Covid border closures, international education’s image had been tarnished by “endless issues” such as cheating, underpayment, work scams and overcrowded accommodation.
“This has been brewing for a long, long time,” Professor Norton said. “I think a correction was coming.”
He said Australia needed to set rules in its national interest, but also had an obligation “not to treat people badly” through the “total policy chaos” of baffling visa rejections and about-turns on work rights.
“The signals we’re sending are all over the place. Eventually, this will come back to bite us. We need clear, stable rules where if people don’t qualify, they know why…and are not ripped off in the process.”
