A New Year’s resolution worth sticking to for universities

One New Year’s resolution is usually enough, and often it doesn’t even make it through January, but, if there’s one resolution universities should commit to this year, it would be “to live within their means”. Although it would have been ideal for Santa Claus to secure adequate, sustainable government funding for higher education, this feat was beyond even his powers.

The reality is that governments are unlikely to increase funding for higher education, with demands on the public purse for job creation, K-12 education and health and social care increasing over time. Funding will undoubtedly decrease over time, making financial autonomy essential for universities. Although this situation isn’t ideal, it’s achievable – but only if universities aren’t restricted by international student caps.

In the United Kingdom, universities employ over half a million staff and educate 2.8 million students, while in Australia, they employ 130,000 staff and educate 1.5 million students. Even during the pandemic Australian universities made a record AU$5.3 billion (US$3.3 billion) surplus.

The University of Sydney recorded the highest revenue of AU$3.5 billion in 2021 with an AU$1 billion surplus and an operating margin up by almost 30%. International student fees accounted for the bulk of its total revenue, outpacing government funding.

Loss of confidence

Yet universities are facing caps on international student recruitment and these come as young people and society, particularly in the Global North, increasingly question the value of higher education. In the UK, taxpayer concerns are mounting as rising interest rates are projected to increase student loan costs by £11 billion (US$13.6 billion) annually.

In Australia, growing student debt and a strong jobs market have driven a 13% drop in bachelor degree enrolment since 2016, casting doubt on the government’s target for 55% degree attainment by 2050.

Similarly, in the United States, confidence in four-year degrees is at a record low, with only 22% of adults considering a degree worth the debt. This shift is pushing students toward alternative career paths.

Employers in developed economies are also moving away from requiring degrees and increasingly prioritise skills-based hiring. In the UK, the prime minister has pledged to refocus apprenticeship funding on younger people by shortening programmes and limiting funds for advanced university-level qualifications.

US Vice President Kamala Harris has suggested removing degree requirements for some federal roles, and President-elect Donald Trump has described universities as “bastions of liberal extremism”. If domestic enrolment continues to decline, universities will face significant financial challenges.

A perfect storm

For many institutions, international student fees are the main source of revenue outside of domestic tuition fees. Capping international student numbers when fewer young people are opting for university, and when governments prioritise spending in other areas, creates a perfect storm. This could push colleges and universities to the edge.

While university leaders’ salaries may draw criticism, these leaders are certainly earning their keep now. They must present a united front to governments to retain their autonomy to recruit internationally.

Unfortunately, it’s too late for universities in Australia, Canada and the Netherlands, where international student caps have already been implemented despite opposition from the sector. Advocates lacked the data and evidence needed to counter politically driven narratives.

Now the narrative for the global higher education sector must emphasise that universities are agents of change and drivers of global economic growth. Institutions in the Global North are essential to reducing inequalities, with most international graduates returning home to successful careers that drive economic growth and reduce the desire to migrate.

To live within their means and gain government support for internationalisation, universities need to demonstrate that international education is largely immigration-neutral. But how can higher education manage this, particularly if governments restrict international recruitment opportunities amid rising global student mobility?

Addressing anti-immigration sentiment

Holon IQ research indicates that today nearly five million students pursue education abroad, with that number projected to reach at least seven million by 2030. Annual spending is expected to exceed US$500 billion, with most growth from Asia, particularly China and India.

A focus on employability and establishing talent pipelines from the Global North to the Global South will be critical for universities to regain public trust amid rising anti-immigration sentiment among the domestic population.

The first step is for universities to understand the career outcomes and destinations of international graduates who typically return home either directly after their studies (common among Chinese students) or after a period of post-study work (often the path for Indian and South Asian students).

With several countries increasingly restricting permanent residency, like Canada’s recent reduction in permanent resident numbers from 500,000 in 2024 to 395,000 in 2025, this information becomes crucial.

Understanding where their international graduates go and the employers hiring them strengthens a university’s recruitment narrative for prospective international students. It also opens new revenue opportunities through recruitment services for overseas employers, continuing professional development and funding for applied research.

Moreover, this creates a valuable lobbying opportunity to highlight the role of universities in attracting direct investment from alumni working overseas who are interested in global market expansion.

Transnational education (TNE) also offers potential, though it may not be a significant revenue driver. In the UK, a world leader in TNE provision, there are probably less than 10 universities out of over 100 deriving significant revenues from TNE at the present time. Academic partnerships or campus provision in major source markets like China, India and ASEAN (Association of Southeast Asian Nations) countries provide valuable opportunities to engage industry directly.

Targeting employers who already hire university alumni would allow institutions to create lasting industry relationships, serving both current and future students.

Industry alignment

For higher education’s New Year’s resolution to endure, the sector must focus on the future, aligning closely with industry both domestically and internationally, and shift its view of government funding from essential to supplementary, a ‘nice to have’ or the ‘icing on the cake’.

Private higher education sectors thrive in many countries without government funding, and they manage to be research-intensive while producing highly employable graduates.

The future of universities, I would argue, lies in their own, very capable hands. By focusing on their social role and the significant value they bring through the students they educate and graduate, universities can navigate the challenges ahead and reinforce their social licence.

Louise Nicol is founder of alsocan and Asia Careers Group SDN BHD.

This article is a commentary. Commentary articles are the opinion of the author and do not necessarily reflect the views of University World News.