Virus threatens major source of universities’ income

The spread of the coronavirus across Australia is threatening one of the nation’s largest sources of income: the fees and living expenses paid by foreign students.

More than 565,000 international students are enrolled in Australian universities, colleges and schools this year, while the money outlaid by them, or their parents, was expected to contribute as much as AU$50 billion (US$31 billion) to the national economy.

But the federal government has now told all temporary visa holders, including foreign students, that they should “go home as quickly as possible” to avoid the worst effects of the virus.

Acting Immigration Minister Alan Tudge said the coronavirus pandemic was causing rising unemployment and a sharp economic downturn.

The government’s expectation had always been that temporary visa holders would be able to support themselves and not rely on government support while in Australia, Tudge said.

“Those who are unable to support themselves over the next six months are strongly encouraged to return home,” he said.

“For these individuals it’s time to go, and they should make arrangements as quickly as possible.”

Recognising the worth of foreign students to the national economy, however, led Tudge to announce that students would be able to stay to work and earn more money for an additional 20 hours a week, doubling the present limit of 20 hours per week.

Fee cuts and refunds

With this year’s first term of study having begun, foreign students have called on universities to offer fee reductions as well as refunds to those who had already paid the full amount.

They also urged the universities to arrange for welfare support for those in need during the crisis.

The Council of International Students Australia, the peak body representing international students, called for “welfare packages” that included financial support for its members.

Education officer Domi Dana Johnson said international students were among the biggest contributors to the Australian economy and their contributions should be taken into account in providing support.

As well as lowering the cost of education to students, Johnson said courses should be moved to an online model.

Government considers ‘fee relief’

In response, Tudge said the federal government was discussing fee reductions with the universities.

“The government will undertake further engagement with the international education sector that already provides some financial support for international students facing hardship,” he said.

“For example, we understand there are some education providers that are offering fee discounts to international students.”

Research by population expert Dr Bob Birrell, however, indicates that large numbers of foreign students do not have the money to meet their living costs and course fees unless they work part-time while studying.

“We know that since the government softened the rules on student entry to Australia, large numbers cannot now access enough money to provide for themselves,” Birrell says.

Most growth from India

His research has shown that in recent years most of the growth in student enrolments has come from the Indian sub-continent, particularly India and Nepal.

These students are concentrated in the lower fee-charging universities and not the elite Group of Eight where Chinese students tend to enrol. Instead, Indian sub-continent students make up a large share of enrolments in the fast-growing vocational education sector which, in the main, does not provide degree level courses.

Universities relying on this source of students face serious enrolment issues because some will have to return home, as the government has indicated.

Birrell says it is also unlikely they will be able to attract new students while the employment opportunities these students have hitherto relied on to finance their studies are not available.

“In the past students relied on casual jobs while studying, but those jobs have now disappeared, leaving the students high and dry,” Birrell says.

He says the government’s attitude is that it has no obligation to the students and if they cannot support themselves, “they should go home”.

“The issue is not a priority for the government which has left the problem to the universities to solve. But, unless the government steps in, significant numbers of foreign students will be forced to drop out and leave the country.”

Group of Eight most affected

Students concentrated in the Group of Eight top universities have been most affected, Birrell says.

At the same time, he notes that the number of students enrolling from China had started to plateau, whereas numbers from India were continuing to increase.

Indian students, however, tend to avoid the more costly Group of Eight universities and opt instead for the less expensive institutions where the fees are half those of that price, Birrell notes.

“The students from super rich Chinese households can afford the Group of Eight universities’ AU$40,000 a year tuition fees plus another AU$40,000 in living expenses for their offspring,” he says.

It is these students that the Group of Eight universities are increasingly focused on: the high fee-paying students from China, which now supplies 40% of all their commencing students.

This situation is in strong contrast to the United States where the top universities have nothing like the high proportion of Chinese students enrolled, Birrell says.

“But the danger for the Group of Eight universities in an uncertain geopolitical climate, and with their heavy reliance on the Chinese, is that the government in China could turn off that lucrative tap at any time.”