Universities hopelessly addicted to international students

Australia’s universities must be the nation’s worse risk managers. In the decade leading up to the pandemic, they swam in ‘rivers of gold’ from the world’s largest international student intake (see next chart), yet failed to put money aside for a rainy day.

Source: Salvatore Babones (CIS; 2019).

With the pandemic temporarily cutting the flow of international students, several Australian universities have posted financial losses, leading them to lobby to reopen the international border:

Fresh financial data analysed by the federal Education Department reveals that 15 publicly funded universities made massive operating losses during 2020…

Universities Australia has revealed a 43 per cent plunge in commencements among international students this year, compared to pre-pandemic levels in 2019.

Chief executive Catriona Jackson said 130,000 foreign students are stranded offshore – nearly half of all international students enrolled in Australian universities.

She said she hoped that fully vaccinated students from China and India could “rejoin their friends on Australian university campuses in the near future’’.

There is this great myth that the federal government has “cut funding” to universities. While funding growth indeed slowed, it still rose significantly over the decade to 2019:

University funding boomed over the past decade.

Geoff Sharrock, Honorary Senior Fellow, Melbourne Graduate School of Education exploded this funding myth in a recent blog post.

Sharrock shows that public funding for universities grew significantly between 2011 and 2019, alongside the boom in international student revenue:

Big lift in university funding.

“In turn, the sector’s assets have ballooned, from less than $55 billion in 2011 to over $90 billion in 2019”:

Massive lift in university assets

Sharrock concludes that “Australian universities have seen strong growth in public financing for over a decade; and even stronger growth in offshore student revenue until the 2020 disruption”.

The problem is that our universities have pissed the revenue windfalls away by “transforming their institutions into financial speculators and real estate investors”, as explained by Ben Kunkler at Jacobin:

During the neoliberal era, the massification and marketization of Australian universities accelerated dramatically, funded primarily by cash fees paid by international students…

Flush with cash and intoxicated by easy money, universities invested in towering edifices of increasing size, splendor, and superficiality — all intended to attract yet more international students.

The decade prior to the pandemic was the “roaring 2010s.” Between 2008 and 2019, income generated from international students studying in Australia rose from $19 billion to $37.6 billion. During this time, universities did not just build to keep pace with rising demand. A Commonwealth government report from 2015 showed that in three years, the universities’ student load had grown by 8 percent and floor space needs by 5 percent. At the same time, the value of university buildings had grown by 23 percent…

Meanwhile, Australian university executives paid themselves monstrous salaries that exceed those of vice-chancellors at like-sized institutions overseas.

I will add that while university funding ballooned, the ratio of students to academic staff also soared across Australia’s universities, suggesting a significant decline in resources put towards teaching:

Student-to-staff ratio surged in the decade leading up to the pandemic.

Instead of crying poor and demanding a return to the edu-migration scam, Australia’s universities should focus on cutting their bloated bureaucracies and their obscene investments in shiny new buildings?

Their focus should first and foremost be on providing high quality education to Australian students, alongside research that benefits Australia. Not chasing international student dollars and empire building.