University income from foreign student fees collapses

Australia’s universities face a collapse in their income from foreign student fees, with AU$20 billion (US$15.5 billion) of the value of the international education sector expected to disappear by the end of 2022.

Higher education institutions are already facing financial upheaval as the flood of foreign students enrolling in Australian courses dries up.

A report released on Monday predicts that Australia’s continuing border closures that prevent foreign students enrolling will slash the value of Australia’s international education sector: collapsing from AU$40.3 billion in 2019 to AU$20.5 billion by the end of 2022.

The report, based on new modelling by Dr Peter Hurley from Victoria University’s Mitchell Institute in Melbourne, has uncovered the impact of a third academic year with no foreign students arriving in Australia.

The Stuck in Transit: International student update report uses the latest data to examine the effect of a third academic year with no international student arrivals.

And, for the first time, Hurley also examines the impact on online learning by students living in countries around the globe.

He notes that the value of online learning for Australian universities had shot to AU$3.3 billion in 2020, although this rise was largely caused by existing students stuck abroad and transitioning to online learning, not new students.

“The number of new students enrolling online was actually quite low,” Hurley says.

“By November 2020, only 17,000 new students had enrolled from overseas, just 3.3% of total enrolments. This is well short of the 120,000 new students who would normally enrol every six months.”

Hurley says that although current overseas students studying online helped stem the losses experienced by education institutions in 2020, the trend is “strongly down from this point onwards”.

“While most of the economy is recovering, Australia’s third largest export sector is yet to hit bottom,” he says.

“Currently about 260,000 fewer international students are living in Australia than before the pandemic, a 45% reduction. This is greater than the entire population of Australia’s Northern Territory!”

Hurley notes that most of the AU$20 billion loss of economic value is in the form of goods and services spent by foreign students in Australia’s broader economy.

Collectively, the students spend about 36% of their total on accommodation and another 36% on hospitality and retail, he says.

“But, as students finish their courses and leave the country, the pain will worsen – with new students unable to enrol and commence their studies.

“Missed intakes disrupt the pipeline of international students who usually study for two to three years,” Hurley says. “This means low enrolments today will continue to impact for several years.”

Border policy impact

He argues that the most important factor in any recovery is the rate at which international students can enter Australia again. The fate of the nation’s international education sector now rests on Australia’s border policy.

“Currently 150,000 foreign students are stuck outside Australia. Even if the country allocated half of its current quarantine programme to international student arrivals, it would still take a year just to bring those students into Australia,” Hurley says.