Coronavirus crisis may spell the end of an era for international education

Before the turn of the millennium, international education mainly meant student exchange.

It was an opportunity to spend a semester abroad, take in the sights, make new friends and maybe even learn something along the way. A few international colleges in European tourist hotspots, such as London and Rome, made a business of it.

But in recent times it has become big business, worth US$105 billion (£89 billion) a year, according one estimate.

The coronavirus pandemic has the potential to cut that number substantially. It was bad enough in February when the virus was limited to China, who sent a record 928,000 tertiary education students abroad in 2017, according to data from the United Nations Educational, Scientific and Cultural Organization.

Now that the virus has gone global, its effects on international education could become much more widespread.

Until now, the number of Chinese students studying abroad only ever moved in one direction: up. As a result, China transformed international education from a cottage industry focused on lifestyle tourism into a big business supporting an entire ecosystem of recruitment agents, admissions coaches and test preparation centres.

Many prestigious research universities have come to depend on Chinese student tuition for a substantial portion of their total revenues. At the University of Sydney, probably the most China-dependent university outside of China, roughly one quarter of total revenue is derived from fee-paying Chinese students.

The coronavirus pandemic has had a huge impact on international education, especially in the southern hemisphere. Most universities have cancelled all study abroad and indeed are in the process of cancelling all study on campus, with many putting all classes online.

Universities in Australia and New Zealand suffered an even more severe blow than their northern hemisphere counterparts. That is because virus-induced travel restrictions took effect in February when most antipodean Chinese students were at home celebrating the Lunar New Year holidays. In contrast, most northern hemisphere universities had already started their spring semesters.

Australia’s China-dependent universities have been hit especially hard, but 10 years of extraordinary revenue growth from Chinese students have put them in a strong financial position to weather the storm.

Assuming that the international education market bounces back in a few months, China-dependent universities in Australia and New Zealand will take a one-time loss in the first semester of 2020 but otherwise move forward with their business models intact.

But there’s no guarantee that the pandemic will be over by June. With the coronavirus now apparently under control in China but spreading rapidly in Europe, North America and Australia, we may soon see China imposing travel restrictions on the countries that only weeks ago were imposing restrictions on China.

For China’s ruling Communist Party, that would represent not only a sensible public health provision, but a major propaganda victory.

It would also help them meet their long-term goal of bringing students home. China has already issued security warnings to its students in Australia and the United States, to little effect. China’s international students are savvy enough not to fall for this kind of overt propaganda.

But a health warning, backed up by real evidence of elevated coronavirus risk overseas, could be much more effective. Of course, an enforced statewide travel ban would stop outbound student flows entirely.

The financial impact of such a ban on universities in the prime English-speaking study abroad destinations would be immense. For some of Australia’s most China-dependent universities, it would be catastrophic. But for China, it would give a welcome boost to its own universities at a time of economic uncertainty while helping the country further shore up its restrictive currency regime. What is more, China faces a long-term decline in the size of its university-age student cohorts due to the historical legacy of its now-defunct one-child policy. In the coming decade, it will either have to bring its international students home or start closing its own universities.

Whether or not China decides to call its international students home in response to the global coronavirus pandemic, it faces strong incentives to scale back its outbound student flows. The coronavirus provides the perfect cover for a change of course.

Many Western universities hope to develop the India market as an alternative, but India is still much too poor to make up for any major declines in Chinese student numbers. If China does pull back, 2020 will mark the end of an era in international education.

Even if it doesn’t, the coronavirus will nonetheless have revealed the perils of making a business model out of what should always have remained an enrichment activity.

Salvatore Babones is an adjunct scholar at the Centre for Independent Studies, an associate professor at the University of Sydney, and author of the Analysis & Policy Observatory paper Australia’s Export Exposure to China’s Coronavirus Epidemic.