Drop in overseas students raises risk for some universities

Accounting firm PwC’s recent annual benchmark of public university data suggests that some public universities in the Netherlands will suffer financial deficits as the number of international students from outside of the European Union and the European Economic Area continues to decline.

The report published on 6 February analysed publicly available data from relevant government ministries and the annual reports of 14 public universities. For the first time it provided insight into financial risks resulting from demographic risks.

“In the past period, much attention in the public debate has been paid to the proposed cuts in higher education. In addition to these proposed cuts, higher education is also confronted with structural financial challenges resulting from uncertainty about (international) student numbers and the handling of private activities within the university.

“A major challenge for the sector is the declining domestic student numbers and the associated consequences for funding,” Sander van Veldhuizen, chairman of the education group of PwC, said in a press release.

Predictions

The PwC analysis follows the release of data that shows that the number of international students attending universities in the Netherlands is likely to be lower than the Ministry of Education’s predictions, which are used to calculate budget allocations to universities (roughly €8,000 per Dutch and EEA student per year).

“After decades of virtually uninterrupted growth in higher education, the number of domestic students will decrease in the coming 10 years, while according to the student estimates of the universities, the total number of students at national level will remain the same,” said Van Veldhuizen.

“In other words, according to the universities, the number of international students is increasing (slightly) and compensates for the structural decrease in the number of domestic students and the associated funding. But whether that is justified is the question,” he said.

According to a report published in Erasmus Magazine, Erasmus University Rotterdam would likely suffer a €3 million additional setback if the number of students from outside Europe falls by 10% which would also mean that universities sink a further €37 million into the red.

“A 10% drop in international intake is not a wild scenario. In September it became clear that international intake in university bachelor programs had dropped by 6%. That was without government measures. The government ultimately wants to cut €168 million on [international students], partly by ensuring that more programmes switch from English to Dutch,” the magazine reported.

Different impacts

However, as highlighted in the PwC report, the costs of such a cut will not hit every institution equally hard. Some have more international students than others.

In Utrecht, the percentage of international students is around 20%, Maastricht University has 59.6% (13.017 international students out of 21.843 in total) and Utrecht University has 15.2% international students (5,804 international students out of 38,287 in total), according to recent data on the website of Universiteiten van Nederland or UNL, an association of government-funded universities.

As reported by Erasmus Magazine, it also matters where these students come from.

“European students typically generate less income than non-European students due to the high institutional tuition fees paid by students from outside the European Economic Area (EEA). These students – often from China, India and Turkey – pay between 10,000 and 37,000 euros per year.

“This provides some universities with a relatively large financial boost. At the University of Amsterdam, for example, tuition fees from non-European students account for 7 per cent of total income, according to PwC – the highest percentage of any university, making it particularly vulnerable to fluctuations in international enrolment.

“In Delft, Eindhoven and Wageningen, this percentage is around 5, while in Nijmegen, less than 1 per cent of total income comes from non-European students. The other universities fall somewhere in between. In Rotterdam, approximately 3 per cent of income comes from the institutional tuition fees paid by students from outside Europe ... The question is how quickly universities can adjust in the event of declining student numbers,” the article said.

Rigorous legislation

Ruben Puylaert, spokesperson for UNL, told University World News: “This academic year, we report a 6% decline in the influx of international students, and a 9% decline from Europe (EEA). Initial reports from universities suggest an even sharper decline for the next academic year. It is very important to ensure that we retain the added value of internationalisation.

“At present, the government plans to introduce rigorous legislation to significantly reduce the number of English-taught programmes. As a result, many study programmes are at risk of disappearing, and the labour market will miss out on highly qualified talent.”

UNL president Caspar van den Berg told University World News: “Anyone who follows developments around the world can see that barring international talent is outdated.

“The combination of the budget cuts, restriction on international students, and an expected decline in the influx of domestic students due to demographics will have major consequences for the financial position of universities in the Netherlands. And, therefore, inevitably for our education and research.”

Asked whether there was a chance the government might make provision for those universities hardest hit by the loss of international students, a spokesperson for Nuffic, the Dutch organisation for internationalisation in education, said: “Minister [of Education, Culture and Science of Netherlands Eppo] Bruins … aims to reduce the number of English-taught bachelor programmes at Dutch universities. Last Friday, he mentioned that he wants to introduce less strict rules for universities in or near border regions and regions with declining populations.

“More details on the criteria for offering English-taught bachelor education in the future and which universities fall in the previously mentioned regions, are expected in the coming months,” said Nuffic’s Juriaan Beuk.

“The Minister hasn’t made any comments about financially compensating universities with a more international student population or introducing less strict rules for universities from other parts of the country.”

The PwC report comes in the wake of last year’s termination of an international scholarship programme known as the Orange Knowledge Programme (OKP) which is administered by Nuffic.

Closure of the programme halved the number of students at the International Institute of Social Studies (ISS) and the Institute for Housing and Urban Development Studies (IHS) at the Erasmus University Rotterdam.