Overseas earnings do not balance books, Australian v-cs say

Australian universities say they are not relying on foreign students to help balance the books, despite growth in international education revenue at institutions struggling to maintain domestic enrolments.

Three Queensland-based universities boosted their income from overseas students by a combined A$48 million (£26 million) last year, according to recently published annual reports. The additional income balanced out a downturn in earnings from Australian students, with the three institutions collecting A$54 million less in domestic fees and subsidies than they had in 2021.

Most universities that have so far released their financial accounts have reported domestic declines amid a buoyant labour market. These include all Queensland institutions apart from the University of the Sunshine Coast, which was also the only public university in the state to end the year in surplus.

James Cook University (JCU) recorded a A$45 million deficit, and the damage would have been worse without a A$20 million increase in international fees that raised the institution’s foreign student earnings close to pre-pandemic levels.

Vice-chancellor Simon Biggs said the recovery had come from a relatively low base. “JCU is less reliant on international revenue than many Queensland universities, especially those in the south east, so it would be unrealistic to rely on international growth to offset our other challenges.”

International education earnings at Central Queensland University rebounded by 47 per cent last year, nevertheless falling well short of pre-pandemic levels. Chief operating officer Narelle Pearse said the increased overseas enrolments were “a welcome trend but not a deliberate strategy to offset the domestic downturn. The market is still recovering and it will take some time to rebuild.”

At Griffith University, a A$6 million gain in international earnings helped to alleviate a A$38 million decline in domestic fees and subsidies. “We have planned carefully to meet these challenges and focusing on the return of international students was just part of these plans,” a spokesperson said.

The figures have emerged amid warnings that Australian universities must rethink a business model that has left them financially overexposed to volatile international education earnings – the only funding stream that provides “substantially” more resources than it consumes, according to Australian National University vice-chancellor Brian Schmidt.

In a personal submission to the Universities Accord, Professor Schmidt said Australian research had become “highly reliant” on cross-subsidies from international student fees. “This system…is vulnerable to global shocks and tends to focus all universities’ missions to the mean.”

The Group of Eight told the accord panel that the sector must jettison its dependence on earnings from overseas students, particularly for funding research.

“The Australian higher education system relies heavily on international student fee revenue to fill funding gaps,” the group’s submission said. “This…increases vulnerability to external events that might impact international markets [and] outsources Australia’s sovereign capability building potential.”

The latest Department of Home Affairs data suggest that such misgivings are not denting universities’ appetite for overseas students. Foreigners are gaining admittance to Australia in record numbers after securing university enrolments.

The number of higher education students granted visas in January and February exceeded the previous peak for this period, in 2019, by 30 per cent.

Australian Bureau of Statistics figures show that more than a quarter of a million foreign students arrived in the first three months of this year, mostly for university study. Although this is less than the equivalent tally in 2019, it is a 143 per cent increase on 2021 levels.

john.ross@timeshighereducation.com