AUSTRALIA: Facing a potentially catastrophic fall

Australia’s A$11 billion-a-year education export market, equal to US$9.6 billion, faces a potentially catastrophic decline as the flood of foreign students into the country becomes a trickle. Any collapse in the market would knock a hole in the national economy and leave many of the nation’s universities with a massive fall in revenues that could threaten their survival.

Foreign students now contribute $2.4 billion a year to university coffers. Yet the flow of new students arriving in Australia to undertake university courses has plummeted from double-digit increases in the early 2000s to low single-digit rises.

In the five years to 2007, the number of overseas students undertaking university award courses on campuses in Australia jumped by more than 50% to hit 175,000 for the first time. But over that period, annual enrolment growth fell successively from 17% to 12% to 8% and this year are down to less than 4%.

Last May, Central Queensland University (CQU) was forced to slash more than 200 administrative jobs following a 25% drop in the number of its foreign fee-paying students. CQU has the highest proportion of overseas students of any in Australia and relies heavily on their fees to maintain its ‘shop-front’ campuses in Brisbane, the Gold Coast, Sydney and Melbourne.

During first semester in 2006, overseas students comprised 53% of CQU’s nearly 21,000 enrolments but a year later this had dropped to less than 47% of the 17,650 enrolments.

Without an increasing flow of students from China and India, many other universities would be experiencing similar financial difficulties. This year, 36,500 students from mainland China are enrolled onshore with Australian universities and a further 18,500 are from India, making these the top two source countries.

Changes to Australia’s skilled migration programme are believed to have added to the drop in applications for study visas from foreign students. Large numbers come to Australia with the express purpose of obtaining permanent residency on graduation.

But under the changes that came into effect in September, students graduating from an Australian tertiary institution and who apply to stay on will face stricter tests of their English language competency and work skills.

The move to tighten eligibility for residency visas follows mounting complaints from academics and employers that foreign students are graduating from universities and vocational education colleges despite having poor English and lacking the skills needed to meet employer requirements.

The changes to the skilled migration scheme impose tighter requirements over the links between the courses students undertake, their work experience and nominated occupations. But students who do not meet the new requirements for residency can now apply for an 18-month ‘skilled-graduate’ visa to build on their skills and work experience.

They can use the time to work in their chosen field, improve their English language ability or undertake a ‘professional year’ of further study. Many students, even those who do not want to stay in Australia, are likely to seize the opportunity to earn money and repay loans they took out to cover their course costs as the temporary visa will allow them to work anywhere and at whatever they like.

Monash University sociologist Dr Bob Birrell was one of three academics commissioned by the former conservative federal government to investigate Australia’s skilled migration scheme. Many of his group’s recommendations were subsequently accepted and while Birrell strongly supported most of the changes, he warned that up to 30,000 students could apply for temporary visas.

If students did not undertake a professional year of training, he said they would be forced to work as casuals and this would put pressure on jobs and wages at the lower end of the labour market.

The increasing numbers of students from India and China was reflected both in the graduation rates and in the rising number of applications from overseas students for permanent residency, Birrell said. A major attraction for Indian students coming to Australia was clearly the prospect of being able to remain after graduating and work here.

While the vast majority of other Asian students are enrolled in undergraduate degrees, most Indian students were postgraduates undertaking masters degrees, usually as a means of obtaining permanent residency visas, he said. A significant proportion of this latter group had enrolled in courses such as accounting and engineering to boost their chances of staying on in Australia.