Before the Pandemic, International students took up 25% of the university population in Australia. As the pandemic became more severe, the international students have returned home, and probably will not return any time soon. To combat the coronavirus, Australia has shut its borders, and they may not open until the pandemic has ended. Australian universities are already suffering losses in revenue and jobs due to the projected loss of international students.
What’s happening to international students?
More than half a million international students were in Australia when the coronavirus pandemic was declared, and many were left jobless and struggling to make ends meet. Temporary visa holders weren’t offered any financial help from the Australian government and thus found themselves in deep financial stress. Prime Minister Scott Morrison released a statement saying that if the international students “ could not afford to support themselves, they could go home”. The flippancy of Morrison’s comment had commentators fearing his attitude could cause Australia to lose its good reputation and their next batch of international students. Many international students who relied on casual work to keep them afloat are now struggling to pay for rent, groceries, and even their courses. David Bogi, a student at the University of Melbourne, says that Scott Morrison’s comments shows an “underbelly of racism” that has bubbled up during the crisis. He also thinks Morrison’s remarks will affect how many international students will seek future higher education in Australia.
How will Australia handle the $19 Billion and 20,000 Jobs at risk of being lost?
The Mitchell Institute published a report stating that the Australian university sector is set to lose 19 billion in the next three years. On top of that, Universities Australia has estimated that 20,000 jobs will be lost between July 2020 and the end of the year. The head of Universities Australia, Catriona Jackson, said the loss of international student revenue would be felt for years.
“If you lose international students for this year, then you don’t have a second year, or a third, or the year after.”
National Tertiary Education Union division secretary Cathay Day says that the impact COVID is having on the Australian Universities is worse than the global financial crisis. When the global financial crisis hit, it took five years before the number of international students recovered. The danger now is that, even if the coronavirus magically disappeared and Australia opened its border, many of the countries that the majority of international students come from are heavily impacted.
Have decades of budget cuts led to a dependence on international dollars?
Australia has a long history of international students, with Sydney University welcoming its first Chinese overseas student in 1923. From the 1950s and onwards, children of Chinese parents from countries such as Indonesia, Singapore, and Malaysia began to arrive in Auz. If they passed the university entrance exams, they went to university with commonwealth scholarships or paid the same fees as Australians. By 1966, international students already took up 9% of full-time university students. International students at university did not pose an essential source of income until the early 2000s, after a decade of reduced government funding. Government funding didn’t cover the cost of research or the growth of domestic students, so universities began marketing to international students in hopes to fund themselves better.
International Education remains one of Australias largest export industries, worth upwards of 35 billion a year to the economy. Of that, roughly 8.84 billion in revenue comes from international students, 26% of their total revenue. The NTE Union said Universities has only turned to international students for revenue when the federal government cut their funding in the 1980s. According to Dr Day, “They are now more reliant on international students than they ever were in the past, so the loss of those students is a massive income drain on the universities.”
The reduced government funding is met with quite a lot of animosity from the general public of Australia, with many believing that public universities should have access to available funds. In 1989 universities attained 80% of their operating costs from public funds, whereas now, it is estimated at less than 40%. A percentage that is well below the OECD average for public investment in tertiary education.
What changes is Australia making for solving this problem?
The Australian government announced in July that they would restart granting international students visas and allow current students to count online study while they are overseas.
Union Secretary, Dr Day also said she was negotiating a salary cut of 5 to 15 % for full-time ongoing staff in the hope it would save up to 12,000 jobs., Only a few universities have sufficient budgets to withstand the significant reduction in revenue. Without substantial funding from the government, Universities will need to build additional revenue streams. Some universities have already reported their reappraisals of infrastructure requirements as well as reviews of “other expenditure” costs. Unfortunately, employee costs represent a reported 57% of total university spending, so further reductions in that department are inevitable to some extent.
As well as this, Universities will need to continue investing their money in digital education and find ways to attract both national and international students to their universities post COVID-19. Enticing foreign students back to Australia would extinguish the income problem, as well as solve the skills shortage, killing two birds with one stone.