tag:theconversation.com,2011:/global/topics/university-finances-8916/articlesUniversity finances – The Conversation2022-12-02T13:40:41Ztag:theconversation.com,2011:article/1946872022-12-02T13:40:41Z2022-12-02T13:40:41Z3 ways cryptocurrency is changing the way colleges do business with students and donors<figure><img src="https://images.theconversation.com/files/498040/original/file-20221129-16-igul3k.jpg?ixlib=rb-1.1.0&rect=53%2C0%2C6000%2C3988&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Universities are seeking to boost bottom lines and personal connections with cryptocurrencies.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/illustration/woman-study-by-stock-trading-royalty-free-illustration/1356601296">Irina Marchenko/iStock via Getty Images</a></span></figcaption></figure><p>Until about 2020, universities used cryptocurrencies only to <a href="https://theconversation.com/ransomware-criminals-are-targeting-us-universities-141932">pay ransoms to criminals attacking their networks</a>. A fast payment to criminals helped victim universities restore their networks quickly.</p>
<p>With <a href="https://www.insiderintelligence.com/insights/us-adults-cryptocurrency-ownership-stats/">increasing public adoption</a> of cryptocurrencies, especially <a href="https://www.ypulse.com/report/2022/04/07/buying-into-crypto-and-nfts-trend-report/">among young consumers</a>, universities are exploring them, too. As of early 2022, <a href="https://www.cnbc.com/2022/03/31/cryptocurrency-news-21percent-of-adults-have-traded-or-used-crypto-nbc-poll-shows.html">20% of U.S. consumers had used</a> cryptocurrencies. According to an <a href="https://www.ypulse.com/report/2022/04/07/buying-into-crypto-and-nfts-trend-report/">April 2022 report</a>, 28% of 13- to 39-year-olds had purchased at least one type of cryptocurrency. Among consumers in this age group, <a href="https://www.ypulse.com/article/2022/04/11/heres-how-many-gen-z-millennials-have-bought-crypto-nfts/">13% had purchased and 38% were interested in</a> a particular offshoot of cryptocurrencies called non-fungible tokens.</p>
<p>Cryptocurrencies have lost market value from a peak of <a href="https://www.bloomberg.com/news/articles/2022-06-30/bank-of-america-s-crypto-users-shrunk-by-50-in-bear-market">about US$3 trillion in November 2021</a> to <a href="https://coinmarketcap.com/">$804 billion in November 2022</a>. And their uses are not as widespread as they were as recently as 2021. Despite <a href="https://www.thetimes.co.uk/money-mentor/article/is-bitcoin-crash-coming/">the crashes in value</a> and loss in confidence due to <a href="https://www.nytimes.com/2022/11/17/briefing/crypto-collapse-ftx.html">the collapse of some large crypto exchanges</a>, universities appear to me to be open to a potential market recovery. </p>
<p>In my recent <a href="https://scholar.google.com/citations?user=g-jALEoAAAAJ&hl=en&oi=ao">research</a>, I have looked at educational institutions’ use of crypto assets such as <a href="https://www.e-elgar.com/shop/usd/the-rise-of-blockchains-9781802208160.html">cryptocurrencies</a> and <a href="https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=9903860">non-fungible tokens</a>. I see three ways that universities are using cryptocurrencies.</p>
<h2>1. Accepting tuition payments</h2>
<p>People want to be <a href="https://investors.sofi.com/news/news-details/2022/SoFi-at-Work-Study-Reveals-Three-in-Four-Workers-Are-Stressed-About-Financial-Issues-Spending-9-Working-Hours-Per-Week-Dealing-With-Personal-Finances/default.aspx">paid in cryptocurrencies</a> and use it to <a href="https://cointelegraph.com/news/airbnb-users-want-crypto-payment-options-according-to-ceo-twitter-poll">buy goods and services</a>. Businesses are responding to this trend, setting up systems to <a href="https://usa.visa.com/about-visa/newsroom/press-releases.releaseId.18711.html">accept payments in cryptocurrencies</a>. </p>
<p>Universities are responding, too. <a href="https://www.bizjournals.com/boston/news/2022/05/04/bentley-university-crypto-payments-tuition.html">Since May 2022</a>, Bentley University outside Boston has allowed students to pay tuition with <a href="https://www.bentley.edu/offices/student-accounts/payments">cryptocurrencies such as bitcoin, ethereum and USDC</a>. Some universities accept cryptocurrency payments only for certain programs. For instance, in the fall of 2021, the Wharton School of the University of Pennsylvania <a href="https://almanac.upenn.edu/articles/wharton-first-ivy-league-school-to-accept-tuition-payments-in-cryptocurrencies/">announced it would accept</a> cryptocurrencies to pay tuition in its executive education program in the <a href="https://news.wharton.upenn.edu/press-releases/2021/10/wharton-launches-economics-of-blockchain-and-digital-assets-executive-education-online-certificate-program/">economics of blockchain and digital assets</a>.</p>
<p>Paying tuition in cryptocurrency is faster, cheaper and easier for international students, because doing so lets them avoid paying fees for <a href="https://www.upromise.com/articles/pay-for-college-with-crypto/">currency conversion and international transfer transactions</a>. And universities benefit by receiving cryptocurrency payments immediately, rather than facing a delay of several days for overseas bank transactions.</p>
<p>Universities around the world deal differently with crypto’s price volatility.
The University of Nicosia in Cyprus <a href="https://www.topschoolsabroad.com/posts/list-universities-allow-pay-tuition-fees-bitcoin/">immediately converts bitcoin</a> to euros. But Paraguay’s Universidad Americana <a href="https://www.banklesstimes.com/cryptocurrency/resources/which-universities-accept-cryptocurrency/">evaluates price trends</a> before converting into its national currency.</p>
<h2>2. Receiving crypto gifts</h2>
<p>It is becoming increasingly common for universities to accept cryptocurrency gifts. In 2021, the public charity organization Fidelity Charitable received the equivalent of <a href="https://www.bloomberg.com/news/articles/2022-02-15/crypto-gifts-surge-1-082-at-fidelity-s-philanthropic-powerhouse">US$331 million in digital gifts</a>, which was about 12 times more than in 2020.</p>
<p>As of 2021, technology company The Giving Block agreed to help <a href="https://www.bestcolleges.com/news/analysis/2021/12/13/crypto-philanthropy-higher-education-bitcoin-ethereum/">about 100 universities</a>, such as the University of Arizona, the University of Maryland, the University of Alabama, Catholic University and Wake Forest University, handle cryptocurrency payments and donations. Some universities have added cryptocurrency guidelines on their “How to Give” pages and <a href="https://uif.uillinois.edu/cryptocurrency">provided instructions for donors</a>. </p>
<p>In early November 2022, Vitalik Buterin, a co-founder of the ethereum blockchain, gave the University of Maryland <a href="https://today.umd.edu/record-breaking-9-4m-crypto-gift-to-fund-study-of-air-disinfection-to-prevent-future-pandemics">$9.4 million in cryptocurrency</a>. The money will be used to fund public health research.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A screenshot of an auction listing for an NFT" src="https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=220&fit=crop&dpr=1 600w, https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=220&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=220&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=276&fit=crop&dpr=1 754w, https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=276&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/498064/original/file-20221129-24-aquvft.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=276&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The University of Pennsylvania auctioned off NFTs of images from university-held patents to raise money for further research.</span>
<span class="attribution"><a class="source" href="https://onlineonly.christies.com/s/university-pennsylvania-mrna-nft-vaccines-new-era/university-pennsylvania-mrna-nft-vaccines-new-era-1/157132">Christies</a></span>
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<h2>3. Exploring non-fungible tokens</h2>
<p>Some universities are successfully capitalizing on this trend to raise money, and to strengthen connections with alumni.</p>
<p>When blockchain technology, <a href="https://theconversation.com/can-blockchain-technology-help-poor-people-around-the-world-76059">a database of transaction records stored in many computers at once</a>, was first invented, it supported only money-like assets such as bitcoin and other cryptocurrencies. The technology has evolved to create a special kind of digital asset called non-fungible tokens. A non-fungible token is a unique image, video or audio file <a href="https://blockchainhub.net/blog/blog/nfts-fungible-tokens-vs-non-fungible-tokens/">representing an item such as a physical painting</a> or a song stored on blockchains. The file, and information about who owns it, are stored on a blockchain. </p>
<p>Of course, a non-fungible token is not the asset itself, but is a <a href="https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=9903860">one-of-a-kind, exclusive digital version</a> of it, which some people value and view as <a href="https://www.luxurytribune.com/en/nft-the-ultimate-in-dematerialised-social-status">a social status symbol</a>. One non-fungible token artwork, “The Merge,” which was created by a pseudonymous artist, was sold for <a href="https://cointelegraph.com/news/life-changing-money-the-10-most-expensive-nfts-sold-to-date">$91.8 million</a> in December 2021.</p>
<p>In June 2022, the University of California, Berkeley minted a non-fungible token based on the <a href="https://www.insidehighered.com/news/2022/01/20/colleges-cash-nfts-new-fundraising-mechanism">Nobel Prize–winning research of immunologist James Allison</a>. The token’s auction raised <a href="https://www.bloomberg.com/news/articles/2021-05-27/nft-for-nobel-prize-winning-data-to-be-auctioned-by-uc-berkeley#xj4y7vzkg">about $50,000</a>. The proceeds funded immunology research.</p>
<p>Colleges such as Brigham Young University and Syracuse University are <a href="https://www.businessinsider.com/colleges-nfts-marketplaces-nil-student-athletes-2022-9">bundling non-fungible tokens with real-world perks</a> such as VIP seats for events they organized. Some people are willing to pay more for the combination than for the real-world items alone.This increases non-fungible tokens’ attractiveness.</p>
<p>In May 2022, Harvard University announced that every graduate from Harvard College would <a href="https://www.thecrimson.com/article/2022/5/24/class-of-2021-nfts/">receive a commemorative non-fungible token</a>. And Duke University grants <a href="https://pratt.duke.edu/about/news/duke-engineerings-fintech-program-sends-certificates-coursera-students-nfts">completion certificates in the form of non-fungible tokens</a> for those who pass one of its blockchain technology courses.</p>
<p>Georgetown University’s McDonough School of Business gave the members of its class of 2020 non-fungible tokens as a gift. The tokens were digital twins of the physical 2020 Challenge Coin gifts <a href="https://twitter.com/GtownBlockchain/status/1530300142431088640">given to the students as a token of appreciation</a>. The coin’s back features the building that <a href="https://msb.georgetown.edu/news-story/a-token-of-appreciation-mcdonough-delivers-georgetowns-first-nft-to-the-class-of-2020/">houses the university’s business school</a>.</p>
<p>Universities are using cryptocurrencies to manage operations, raise funds and enhance relationships with students and alumni. If these assets recover from their current crash and begin to boom again, these trends may further accelerate.</p><img src="https://counter.theconversation.com/content/194687/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nir Kshetri does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite a recent crash in value, universities are using cryptocurrencies for a variety of purposes and reasons.Nir Kshetri, Professor of Management, University of North Carolina – GreensboroLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1839772022-06-01T20:12:47Z2022-06-01T20:12:47ZWhy big university surpluses underscore the need to reform how they are funded and governed<p>The election of a new Labor federal government probably drew sighs of relief across the higher education sector. University staff and students will be hoping for a more sympathetic approach than they received from the Coalition government.</p>
<p>Tertiary education lobby groups have already put forward their wish lists and funding priorities. Yet the case for increasing funding might be a harder sell now that several universities have announced <a href="https://campusmorningmail.com.au/news/buckets-of-money-at-big-sydney-unis/">staggeringly large surpluses</a> in their annual reports.</p>
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Read more:
<a href="https://theconversation.com/labors-promised-universities-accord-could-be-a-turning-point-for-higher-education-in-australia-183810">Labor's promised universities accord could be a turning point for higher education in Australia</a>
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<h2>So how big were these surpluses?</h2>
<p>The University of Sydney’s <a href="https://www.smh.com.au/national/nsw/sydney-university-records-1-billion-surplus-as-staff-demand-a-share-20220523-p5anv2.html">A$1.04 billion operating surplus</a> stands out. But the biggest universities’ annual reports all show <a href="https://www.theaustralian.com.au/higher-education/universities-large-surpluses-complicate-their-case-for-aid/news-story/cb59b68d12651d19bb95c072b23d4d44">healthy surpluses</a>. <a href="https://www.theage.com.au/national/victoria/victorian-unis-bounce-back-despite-pandemic-pressures-on-income-20220503-p5ai06.html">Monash</a>, <a href="https://campusmorningmail.com.au/news/buckets-of-money-at-big-sydney-unis/">UNSW</a> and <a href="https://www.couriermail.com.au/education-queensland/big-salaries-are-back-as-universities-recover-from-covid/news-story/e42c550343d4fe766a575683f97408b8">Queensland</a> have reported surpluses of more than $300 million. </p>
<p>While some universities, such as <a href="https://campusmorningmail.com.au/news/vic-uni-finances-theyre-still-standing/">La Trobe</a>, reported operating losses, many <a href="https://campusmorningmail.com.au/news/wa-uni-2021-financials-saved-by-the-feds/">other</a> <a href="https://campusmorningmail.com.au/news/vic-uni-finances-theyre-still-standing/">universities</a> around the country also <a href="https://campusmorningmail.com.au/news/uni-financial-results-some-look-better-than-they-like-to-admit/">recorded</a> surpluses, including some that aren’t far off Sydney’s result in relative terms. Examples include <a href="https://honisoit.com/2022/05/usyd-records-1-04-billion-surplus-for-2021/">Charles Sturt</a> (a 21% surplus of $143 million) and <a href="https://www.2nurfm.com.au/news/university-of-newcastle-defends-185-million-surplus-after-union-backlash/">Newcastle</a> (a 19% surplus of $185 million).</p>
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<p>The new government is already committed to fiscally expansive policies in areas such as the National Disability Insurance Scheme (<a href="https://theconversation.com/labor-vows-to-tackle-the-ndis-crisis-whats-needed-is-more-autonomy-for-people-with-disability-181470">NDIS</a>), <a href="https://theconversation.com/labors-plans-for-aged-care-are-targeted-but-fall-short-of-whats-needed-180497">aged care</a> and <a href="https://theconversation.com/high-childcare-fees-low-pay-for-staff-and-a-lack-of-places-pose-a-huge-policy-challenge-183617">early childhood education</a>. In an inflationary environment, it might be tempted to take a light-touch approach to university funding – scrap the Coalition’s incoherent <a href="https://theconversation.com/labor-offers-extra-university-places-but-more-radical-change-is-needed-173219">Job-Ready Graduates Package</a> and let universities look after themselves. </p>
<p>After all, despite regularly decrying the damage done by the Morrison government, Labor in opposition made few concrete policy commitments to universities beyond the welcome addition of 20,000 student places.</p>
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Read more:
<a href="https://theconversation.com/labor-offers-extra-university-places-but-more-radical-change-is-needed-173219">Labor offers extra university places, but more radical change is needed</a>
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<p>However, the latest university surpluses actually highlight, rather than diminish, the case for more public funding, and indeed for broader reform of university governance and finances. The key to understanding this lies in the market-based sources of revenue that underpinned these surpluses.</p>
<p>Take the University of Sydney. According to its <a href="https://www.sydney.edu.au/about-us/vision-and-values/annual-report.html">annual report</a>, the surplus was: </p>
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<p>“mainly due to increases in overseas student enrolments, strong investment performance and non-recurring items including the Commonwealth Government’s $95.1 million Research Support Program contribution and the net gains from the disposal of property assets”.</p>
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<p>International student fee income increased by about $250 million. Investment returns were up by almost $400 million. </p>
<p>It was a similar story elsewhere. Newcastle University reaped <a href="https://campusmorningmail.com.au/news/uni-financial-results-some-look-better-than-they-like-to-admit/">$119 million</a> in additional investment income and UNSW <a href="https://newsroom.unsw.edu.au/sites/default/files/attachments/publications/2021-annual-report-v20b-digital-single.pdf">$117 million</a>. Many universities also profited from <a href="https://thepienews.com/news/australian-universities-sell-stake-in-idp-to-offset-losses/">selling their shares</a> in international student placement business IDP Education. </p>
<p>On the downside, the University of Wollongong <a href="https://www.theaustralian.com.au/higher-education/student-housing-deal-gone-sour-costs-uni-of-wollongong-169m/news-story/ff0ff2aeac32b1b079843ace877091a5">lost $169 million</a> after terminating its contract with a private student accommodation provider it had been underwriting.</p>
<h2>Remember, these are public institutions</h2>
<p>Bear in mind that these universities are public institutions. They are created by acts of parliament. A <a href="https://www.teqsa.gov.au/what-we-do">public agency</a> accredits and regulates their degree-conferring ability.</p>
<p>Public universities have legislated responsibilities to serve public ends. Yet they resemble profit-driven corporations in their financial governance. </p>
<p>This has been evident during the past two years. Having been <a href="https://www.theguardian.com/australia-news/2020/may/04/australian-universities-angry-at-final-twist-of-the-knife-excluding-them-from-jobkeeper">denied JobKeeper</a> by the Coalition government, universities savagely cut staff. First casuals, then fixed-term staff, and then staff on ongoing contracts. </p>
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Read more:
<a href="https://theconversation.com/after-2-years-of-covid-how-bad-has-it-really-been-for-university-finances-and-staff-172405">After 2 years of COVID, how bad has it really been for university finances and staff?</a>
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<p>In response to what loomed as a short-term drop in income from international students, university leaders took the corporate route. They restructured aggressively, losing incalculable expertise and institutional memory and throwing thousands of staff into unemployment. This process boosted “profits”, with employee expenses down at many universities.</p>
<p>Given the composition of university governing councils – about <a href="https://theconversation.com/2-out-of-3-members-of-university-governing-bodies-have-no-professional-expertise-in-the-sector-theres-the-making-of-a-crisis-171952">one-third of members</a> are from the corporate sector – it’s hardly surprising a for-profit orientation has come to dominate. </p>
<h2>What is the role of federal funding?</h2>
<p><a href="http://publicuniversities.org/wp-content/uploads/2021/01/University-Governance-Fact-Sheet.pdf">Federal funding settings</a> have played a role. Successive federal governments have refused to fund the full costs of university <a href="https://theconversation.com/new-analysis-shows-morrison-government-funding-wont-cover-any-extra-uni-student-places-for-years-167542">teaching</a> and <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp2122/Quick_Guides/UniversityResearchFunding">research</a>.</p>
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<p>Government funding accounts for <a href="https://grattan.edu.au/wp-content/uploads/2018/09/907-Mapping-Australian-higher-education-2018.pdf">a little over half</a> of higher education revenue, if government <a href="https://www.dese.gov.au/higher-education-loan-program">HELP contributions</a> are included. This creates an incentive for university chiefs to pursue private sources of revenue to make up the shortfalls. Consistent with the corporate approach, the risks arising from market exposure have been devolved to staff by loading up on insecure employment (<a href="https://www.abc.net.au/news/2020-07-17/university-casual-workforce-redundancies-dirty-secret/12462030">nearly 70%</a> of the higher education workforce) and rolling workplace restructures.</p>
<p>Surplus revenues are earmarked for infrastructure investment or “to shield the University against unforeseen circumstances”, as the University of Sydney annual report states. Except, as we saw over the past two years, when “unforeseen circumstances” arose, staff bore the brunt to preserve balance sheets.</p>
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Read more:
<a href="https://theconversation.com/heres-what-the-government-and-universities-can-do-about-the-crisis-of-insecure-academic-work-183345">Here's what the government and universities can do about the crisis of insecure academic work</a>
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<h2>What can governments do?</h2>
<p>Such perverse dynamics are out of place at a public institution. And this is the point at which federal policy can play a positive role. Increased and stable federal funding would reduce the incentive for university chiefs to pursue market-based sources of revenue and help avoid the wild budget gyrations of recent years. </p>
<p>But, given the corporate orientation of university governing boards, this would do little in and of itself to fix problems such as chronic <a href="https://theconversation.com/heres-what-the-government-and-universities-can-do-about-the-crisis-of-insecure-academic-work-183345">job insecurity</a> and <a href="https://theconversation.com/hit-hard-by-the-pandemic-researchers-expect-its-impacts-to-linger-for-years-169366">increasing workloads</a>.</p>
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<em>
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Read more:
<a href="https://theconversation.com/2-out-of-3-members-of-university-governing-bodies-have-no-professional-expertise-in-the-sector-theres-the-making-of-a-crisis-171952">2 out of 3 members of university governing bodies have no professional expertise in the sector. There's the making of a crisis</a>
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<p>Governance structures are a state responsibility. However, federal legislation can nonetheless influence universities’ internal resource allocation. The work of the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Job_Security/JobSecurity">Senate Select Committee on Job Security</a> provides a good starting point. </p>
<p>The committee sought to place responsibility on universities, as public institutions, to achieve positive employment outcomes. It <a href="https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024764/toc_pdf/Secondinterimreportinsecurityinpublicly-fundedjobs.pdf;fileType=application%2Fpdf">recommended</a>:</p>
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<p>“as a condition of receiving public funding, universities […] set publicly available targets for increasing permanent employment and reducing casualisation”.</p>
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<p>It also argued the government should legislate to improve the ability of unions to inspect the records of universities with respect to potential wage theft.</p>
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<p>Such an approach is well within the remit of government. It could steer universities towards more positive outcomes for employees, students and the broader community. As it stands, university vice-chancellors seem to be saving for a rainy day, when a typhoon is sweeping across the sector.</p><img src="https://counter.theconversation.com/content/183977/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Damien Cahill is Secretary of the National Tertiary Education Union NSW.</span></em></p>Reports of big university budget surpluses appear to undermine calls for their federal funding to increase. But a closer look at how the surpluses were achieved reveals why change is needed.Damien Cahill, Associate Professor in Political Economy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1759272022-02-24T19:09:58Z2022-02-24T19:09:58ZHigher education must reinvent itself to meet the needs of the world today. Enter the distributed university<figure><img src="https://images.theconversation.com/files/448199/original/file-20220224-15-1du0vib.jpg?ixlib=rb-1.1.0&rect=22%2C170%2C4828%2C3206&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Universities face many threats to their future. The traditional universities have become <a href="https://www.nteu.org.au/qute/article/The-Death-of-Socrates%3A-Managerialism%2C-metrics-and-bureaucratisation-in-universities-%28AUR-58-02%29-18949">over-managed business enterprises</a>, which may not reflect societal, national or global educational needs. The COVID-19 pandemic has brought many of these issues into focus.</p>
<p>In a <a href="https://link.springer.com/book/10.1007/978-981-16-6506-6">new book</a>, I propose a model that responds to the broad range of challenges universities face. I call this model the distributed university – that is, a university that distributes education online to where it is needed. </p>
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Read more:
<a href="https://theconversation.com/amid-global-crisis-how-can-universities-be-regenerated-to-serve-the-common-good-172495">Amid global crisis, how can universities be regenerated to serve the common good?</a>
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<p>In more than 50 years as an academic in Australia and the UK, I have seen the potential for a pivot to online learning that, through distributed learning, could solve many of the problems the higher education sector faces.</p>
<p>I have been involved in online master’s-level programs to build public health capacity in both high-income and low-to-middle-income countries. Face-to-face teaching designed for the <a href="https://pubmed.ncbi.nlm.nih.gov/2037863/">International Clinical Epidemiology Network</a> was augmented by distance learning – first paper-based, followed by online. I established the University of Manchester’s first fully online master’s program. </p>
<p>More recently, I founded and co-ordinated the global, fully online, volunteer-led <a href="https://www.peoples-uni.org/">People’s Open Access Education Initiative (Peoples-uni)</a>. </p>
<figure class="align-center ">
<img alt="Man looking at computer screen with the faces of the many people taking part in an online meeting" src="https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/448200/original/file-20220224-12782-ojqn3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The distributed university reflects the way we communicate and learn in today’s world.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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Read more:
<a href="https://theconversation.com/covid-has-changed-students-needs-and-expectations-how-do-universities-respond-172863">COVID has changed students' needs and expectations. How do universities respond?</a>
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<h2>What are the problems facing universities?</h2>
<p>The pressures on universities are both external and internal. </p>
<p>Externally, universities need to be responsive to the ways people access information today (and will tomorrow). They also need to ensure environmental sustainability. And amid global inequalities in access to higher education, our universities are <a href="https://theconversation.com/without-international-students-australias-universities-will-downsize-and-some-might-collapse-altogether-132869">overly dependent on income from overseas students</a>.</p>
<p>Internal developments pose multiple threats too. Universities have downgraded teaching, with academics not rewarded for educational excellence as opposed to research. They have adopted a competitive business model, rather than a collaborative model of education, and intrusive managerial oversight instead of placing trust in academics. And they work in centralised ivory towers rather than engaging with local communities and industries. </p>
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Read more:
<a href="https://theconversation.com/amid-global-crisis-how-can-universities-be-regenerated-to-serve-the-common-good-172495">Amid global crisis, how can universities be regenerated to serve the common good?</a>
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<p>The distributed university responds to these problems by:</p>
<ul>
<li>reducing global inequalities in access</li>
<li>emphasising local relevance</li>
<li>reducing impacts on the environment</li>
<li>building trust in place of managerialism</li>
<li>collaborating rather than competing. </li>
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<h2>How does the distributed university work?</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Cover of book 'The Distributed University'" src="https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/447428/original/file-20220221-26-gpnt5q.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://link.springer.com/book/10.1007/978-981-16-6506-6">Springer Link</a></span>
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<p>The distributed university I describe in my book (free to read and download) sets up higher education to adapt to the changes in how we work and learn today. </p>
<p>Online learning, which must be <a href="https://theconversation.com/beyond-zoom-teams-and-video-lectures-what-do-university-students-really-want-from-online-learning-167705">fit for purpose</a>, is central to this as it allows for structural change. Smaller local hubs can largely replace central large campuses, reducing the large carbon footprint created by students and staff travelling to campus. These hubs may be physical or virtual. </p>
<p>The distributed university offers education mainly online rather than in lecture halls. Local or regional hubs engage with local communities, industries and other education providers. They encourage practice-based active learning, which can be a hybrid of online and face-to-face.</p>
<p>Each of the hubs can be replicated over geography (including internationally) and over time. Learning needs will change over time as careers and interests develop. Central administration is much smaller, but ensures the courses being offered meet societal needs. </p>
<p>Intrusive managerialism is replaced by trust in academics – made easier by this structure. It is not generally recognised that online education is much more transparent than face-to-face. All materials, student contact and student-tutor interactions are captured, allowing for unobtrusive quality assurance.</p>
<p>Social interaction between students and between academics is offered partly in the hubs but mainly online. This reflects the way we communicate and learn in today’s world. </p>
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<strong>
Read more:
<a href="https://theconversation.com/beyond-zoom-teams-and-video-lectures-what-do-university-students-really-want-from-online-learning-167705">Beyond Zoom, Teams and video lectures — what do university students really want from online learning?</a>
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<p>IT support for education and research is vital. It will allow us to respond to future developments in communications and to the changes and challenges of the <a href="https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/">fourth industrial revolution</a>. </p>
<p>The distributed university will be light on the environment. Although online education is IT-heavy and has its own carbon footprint, it’s <a href="https://www.emerald.com/insight/content/doi/10.1108/IJSHE-06-2013-0065/full/html">much smaller</a> – even more so when powered by renewables – than the face-to-face version with buildings and travel. It will thus show leadership in achieving environmental sustainability. </p>
<p>This model’s local and regional hubs will also encourage regional development. </p>
<p>Our <a href="https://f1000research.com/articles/10-849/">recent research paper</a> highlights the environmental benefits of online education. A group of 128 master’s degree students (mainly from Africa) studied online rather than travel to live and study in the UK. They saved nearly a million kilograms of carbon emissions.</p>
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Read more:
<a href="https://theconversation.com/why-universities-are-starting-to-re-evaluate-their-academics-travel-177129">Why universities are starting to re-evaluate their academics' travel</a>
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<figure class="align-center ">
<img alt="Doctor treats a young boy" src="https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/448196/original/file-20220224-13-51ylsd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Distributed learning is a proven concept that has helped build public health capacity in Africa.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<h2>Three new programs</h2>
<p>COVID has exposed the over-reliance on overseas student fees. This revenue has largely been <a href="https://theconversation.com/7-6-billion-and-11-of-researchers-our-estimate-of-how-much-australian-university-research-stands-to-lose-by-2024-146672">diverted to support research</a>. The government’s <a href="https://theconversation.com/australias-strategy-to-revive-international-education-is-right-to-aim-for-more-diversity-172620">recent international education strategy</a> makes no mention of the role Australia can play in reducing global inequalities in access to education. </p>
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Read more:
<a href="https://theconversation.com/australias-strategy-to-revive-international-education-is-right-to-aim-for-more-diversity-172620">Australia's strategy to revive international education is right to aim for more diversity</a>
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<p>In addition to the benefits described above, a pivot to online education opens up other opportunities. I describe three potential programs: a global online program, a tertiary version of the International Baccalaureate and a “PlanE for Education”.</p>
<p>A <a href="https://link.springer.com/chapter/10.1007/978-981-16-6506-6_3#Sec10">global online program</a> can create low-cost learning for overseas students. This will help meet current educational needs while providing a bridge to future mutually beneficial partnerships with emerging economies. Research must be properly funded, and not rely on the diversion of income from overseas students paying high fees.</p>
<p>To help reduce the <a href="https://theconversation.com/amid-global-crisis-how-can-universities-be-regenerated-to-serve-the-common-good-172495">destructive emphasis on competition between universities</a>, a higher education version of the International Baccalaureate used in schools might be created. This would involve global collaboration between universities, which would reduce competition and standardise quality. </p>
<p>Continuing the collaboration theme is a proposal to create “<a href="https://link.springer.com/chapter/10.1007/978-981-16-6506-6_3#Sec11">PlanE for Education</a>”. This would be similar to <a href="https://theconversation.com/making-australian-research-free-for-everyone-to-read-sounds-ideal-but-the-chief-scientists-open-access-plan-isnt-risk-free-171389">initiatives such as PlanS</a> that require publicly funded research to be published in open access journals or platforms. At least some of the educational resources generated in universities using public money would be made freely available under PlanE.</p>
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Read more:
<a href="https://theconversation.com/making-australian-research-free-for-everyone-to-read-sounds-ideal-but-the-chief-scientists-open-access-plan-isnt-risk-free-171389">Making Australian research free for everyone to read sounds ideal. But the Chief Scientist's open-access plan isn't risk-free</a>
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<p>We live in a digital and distributed world. Universities should too. The notion of a distributed university may help the higher education sector survive, prosper and be sustainable.</p><img src="https://counter.theconversation.com/content/175927/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard F. Heller does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We live in a digital and distributed world. Universities must adapt to that reality to do a better job of meeting today’s educational needs.Richard F. Heller, Emeritus Professor, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1768832022-02-11T03:05:23Z2022-02-11T03:05:23ZUniversities had record job losses, but not as many as feared – and the worst may be over<figure><img src="https://images.theconversation.com/files/445845/original/file-20220210-25-n2vl8g.jpg?ixlib=rb-1.1.0&rect=528%2C0%2C6214%2C4140&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Many universities, facing <a href="https://theconversation.com/universities-lost-6-of-their-revenue-in-2020-and-the-next-2-years-are-looking-worse-166749">revenue losses</a> due to COVID-19, <a href="https://www.businessinsider.com.au/australian-university-job-cuts-losses-tally-2020-9.">announced major staff cuts</a> over the past two years.</p>
<p>Estimates of the job losses have ranged from <a href="https://www.nteu.org.au/covid-19/article/The-jobs-apocalypse.-It%27s-happening-now%21-%28Sentry%2C-Oct-2020%29-22388">12,000 by October 2020</a> to <a href="https://australiainstitute.org.au/report/an-avoidable-catastrophe/">as high as 35,000</a> in the year to May 2021. </p>
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Read more:
<a href="https://theconversation.com/after-2-years-of-covid-how-bad-has-it-really-been-for-university-finances-and-staff-172405">After 2 years of COVID, how bad has it really been for university finances and staff?</a>
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<p>These estimates drew on university announcements and a general ABS labour force survey. I explain the problems with these estimates in more detail <a href="https://andrewnorton.net.au/2022/02/10/university-job-losses-in-the-first-year-of-covid-19/#more-7218">here</a>. Ideally, we should use statistics collected on a standard basis from all universities, such as the Department of Education, Skills and Employment’s <a href="https://www.dese.gov.au/higher-education-statistics/staff-data">higher education staff data</a>, which had a long-overdue release this week. </p>
<p>The department’s statistics are best on permanent and fixed-term contract staff. It lets us compare employment levels on March 31 2021 with the same day in 2020. It shows a net loss of 9,050 permanent and fixed-term contract employees, a 6.9% decline. </p>
<p>This is only the third decrease in <a href="https://grattan.edu.au/report/mapping-australian-higher-education-2018/">university staff since 1989</a>. It’s much bigger than the previous largest fall of 1.8% in 1997. </p>
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<a href="https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="chart showing numbers of university staff at March 31 from 2012-2021, showing both a full-time equivalent and headcount basis" src="https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=312&fit=crop&dpr=1 600w, https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=312&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=312&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=392&fit=crop&dpr=1 754w, https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=392&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/445829/original/file-20220210-47794-3cpwy6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=392&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">University staff numbers at March 31 each year. (Note: includes Avondale College/University, Notre Dame, Bond, Torrens. The apparent headcount dip in 2018 is due to previous errors in UNSW reporting – there was no real decline.)</span>
<span class="attribution"><a class="source" href="https://andrewnorton.net.au/2022/02/10/university-job-losses-in-the-first-year-of-covid-19/#more-7218">Source: Author provided. Data: Department of Education, Skills and Employment</a></span>
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<h2>Casuals and non-academic staff bore the brunt of losses</h2>
<p>The department’s statistics report casually employed staff on a full-time equivalent basis, with no count of distinct jobs or persons. Casual staff typically work part-time or for limited periods such as semesters. This means it takes several of them to add up to one full-time equivalent, the hours worked by a full-time employee. </p>
<p>For universities needing to save money casuals were an easy option. They are employed on flexible short-term contracts, so universities could act quickly as borders closed to international students in February and March 2020. </p>
<p>Casual job losses are clear in the department’s statistics for 2020 compared to 2019. For other staff the March 31 census date hides retrenchments later in the year, which are only revealed in the 2021 to 2020 comparison. </p>
<p>Casual staff fell by 4,258 full-time equivalents in 2020 compared to 2019, a 17.5% decrease. In data going back to 1991, all previous casual staff decreases have been by less than 1%. </p>
<p>But casual staff losses may be over. In March 2021 universities estimated casual staff numbers, in full-time equivalent terms, would be stable in 2021 at 2020 levels. </p>
<p><a href="https://andrewnorton.net.au/2021/04/16/how-many-jobs-are-there-in-higher-education/">Other datasets</a> include more detailed but still imperfect information on casual numbers. Australia’s universities probably had nearly 100,000 casual employees before the pandemic. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-hit-casual-academics-hard-here-are-5-ways-to-produce-a-better-deal-for-unis-and-staff-155357">COVID hit casual academics hard. Here are 5 ways to produce a better deal for unis and staff</a>
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<p>Significant problems with all potential data sources make confident estimates of how many casual employees lost jobs impossible, but a 15,000–20,000 range seems plausible. Additional statistics due later this year may improve on this estimate. </p>
<p>Non-academic staff accounted for nearly three-quarters of all university permanent or fixed-term contract job losses on a headcount basis between 2020 and 2021. Normally, non-academic employees make up <a href="https://twitter.com/andrewjnorton/status/1437221644959846400/photo/1">around 57%</a> of university permanent or fixed-term staff.</p>
<p>It was a similar story with casual non-academic staff. They usually make up about 35% of casual full-time equivalents, but accounted for 47% of lost hours.</p>
<h2>What types of academics lost their jobs?</h2>
<p>Universities tried to protect their core academic activities, but job losses were not spread evenly among all types of academics. </p>
<p>The largest drop in academic employment – down 1,837 positions, or 5.9% – was in combined teaching and research roles. The next largest was teaching-only (-321, -4.8%), then research-only (-254, -1.5%).</p>
<p>While academics with teaching and research contracts still outnumber specialised teaching or research-only staff, they are a threatened species. This employment model was built on a previous funding system that combined government grants for teaching and research. But over the past 30 years policymakers have separated out teaching and research funding, making it much harder to line up teaching and research dollars to pay the salaries of academics who are supposed to do both. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="chart showing changes in percentages of academic staff by research and teaching roles from 1989-2020" src="https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=340&fit=crop&dpr=1 600w, https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=340&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=340&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=427&fit=crop&dpr=1 754w, https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=427&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/445826/original/file-20220210-18418-1elcm84.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=427&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Proportions of academic staff (ongoing or fixed-term contract) by job function. (Note: UNSW excluded 2001-17 due to significant errors in its data submission. Excludes non-academic staff with a research-only function.)</span>
<span class="attribution"><a class="source" href="https://andrewnorton.net.au/2022/02/10/university-job-losses-in-the-first-year-of-covid-19/#more-7218">Source: Author provided/ANU. Data: Department of Education, Skills and Employment</a></span>
</figcaption>
</figure>
<p>The <a href="https://andrewnorton573582329.files.wordpress.com/2022/02/trends-in-staff-function.jpg">trend towards more specialised academic employment</a> was slowed because the high fees paid by international students partially reunited teaching and research income. With that revenue source in decline, teaching-and-research positions became more difficult to sustain.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/universities-lost-6-of-their-revenue-in-2020-and-the-next-2-years-are-looking-worse-166749">Universities lost 6% of their revenue in 2020 — and the next 2 years are looking worse</a>
</strong>
</em>
</p>
<hr>
<p>Research-only academic employment was relatively protected. This might seem surprising given how reliant Australian university research has been on <a href="https://andrewnorton.net.au/2020/05/21/how-reliant-is-australian-university-research-on-international-student-profits/">international student profits</a>. </p>
<p>One reason might be that by October 2020 universities knew they were getting an extra $1 billion in <a href="https://www.dese.gov.au/2020-21-budget-research-package">Commonwealth government research assistance</a>. With that funding not available for 2022, research-only jobs could be more vulnerable. </p>
<h2>Young staff were hit hard</h2>
<p>One early fear as COVID-19 struck university income was that this would affect early career staff the most. They are often employed on fixed-term contracts, which make them relatively cheap to retrench. Contractual vulnerability was a factor in who lost jobs, with a 10% decline in staff on fixed-term contracts compared to 5% of those on permanent contracts.</p>
<p>Age data show 20-something university staff suffered heavy job losses. Some older staff were sent off into retirement, with mid-career staff at the lowest risk of job loss.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="chart showing breakdown of university job losses by age" src="https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=310&fit=crop&dpr=1 600w, https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=310&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=310&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=390&fit=crop&dpr=1 754w, https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=390&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/445833/original/file-20220210-1970-16cj2pn.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=390&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Staff losses by age, showing percentage decrease in each age group in 2021 compared to 2020. (Note: numbers are for permanent and fixed-term staff only. Includes Avondale College/University, Notre Dame, Bond, Torrens.)</span>
<span class="attribution"><a class="source" href="https://andrewnorton.net.au/2022/02/10/university-job-losses-in-the-first-year-of-covid-19/#more-7218">Source: Author. Data: Department of Education, Skills and Employment</a></span>
</figcaption>
</figure>
<p>Among academic staff, level B (lecturer) academics had the largest reduction in employment (-1,009) and percentage decline (-5.9%) of all academic levels. This is consistent with job losses being greatest for young university staff.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/hit-hard-by-the-pandemic-researchers-expect-its-impacts-to-linger-for-years-169366">Hit hard by the pandemic, researchers expect its impacts to linger for years</a>
</strong>
</em>
</p>
<hr>
<h2>Job losses varied by university</h2>
<p>Job losses varied greatly across the higher education sector. Universities in Victoria and New South Wales were affected the most, reflecting their high international student enrolments. </p>
<p>At the upper end of the range, UNSW, Monash, RMIT and UTS each lost more than 500 staff. </p>
<p>Charles Darwin and Southern Queensland went against the trend and added small numbers of employees.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="chart showing net staff losses or gains by universities from 2020 to 2021" src="https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=292&fit=crop&dpr=1 600w, https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=292&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=292&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=367&fit=crop&dpr=1 754w, https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=367&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/445839/original/file-20220210-25-1sp95aq.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=367&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Net job losses or gains by university, 2020 to 2021. (Note: fixed-term and permanent contract staff only.)</span>
<span class="attribution"><span class="source">Source: Author. Data: Department of Education, Skills and Employment</span></span>
</figcaption>
</figure>
<h2>When will university employment recover?</h2>
<p>The newly released data used above are already nearly a year old. There is some evidence that employment in the second half of 2021 improved on earlier in the year. </p>
<p>An analysis of <a href="https://cpas.anu.edu.au/research/reports">academic job advertisements</a> found that by June 2021 they were at more than 90% of June 2019 levels, after having crashed during 2020. Australian Taxation Office <a href="https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/weekly-payroll-jobs-and-wages-australia/latest-release">payroll data</a> show that in tertiary education, which includes vocational as well as higher education, <a href="https://andrewnorton573582329.files.wordpress.com/2022/02/payroll-jobs-2022.jpg">more people were being paid in the last quarter of 2021</a> than at the same time in 2020. </p>
<p>Commonwealth research funding returning to normal will reduce university income in 2022, but increased revenue from international students will partly offset this loss. <a href="https://www.dese.gov.au/international-data">International student numbers</a> are slowly recovering after Australia’s borders reopened to them in December 2021, but still have a long way to go to get back to 2019 levels. </p>
<p>The worst is almost certainly over for university staff, but the long COVID of university employment will not clear for some time.</p><img src="https://counter.theconversation.com/content/176883/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While the official figures are lower than earlier estimates of job losses, they also show certain types of employees – casual, non-academic and younger staff – bore the brunt of the staff cuts.Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1724052021-12-08T19:18:40Z2021-12-08T19:18:40ZAfter 2 years of COVID, how bad has it really been for university finances and staff?<figure><img src="https://images.theconversation.com/files/435999/original/file-20211207-21-woe781.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5322%2C3545&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Two years into the pandemic, what impacts have COVID-19 really had on Australian university finances and staffing in 2020 and in 2021? Our recently published <a href="https://melbourne-cshe.unimelb.edu.au/lh-martin-institute/fellow-voices/australian-unis-and-the-pandemic">research</a> shows the impacts varied greatly across the sector. However, staff cuts appear to have been disproportionate to overall financial losses.</p>
<p>About 10% of the university workforce (in full-time equivalent terms) lost their jobs. Although that broadly matches the loss of fees and charges income in 2020, overall revenue fell by only 5%.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Horizontal bar chart showing income changes for Australian public universities from 2019 to 2020" src="https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1487&fit=crop&dpr=1 600w, https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1487&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1487&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1868&fit=crop&dpr=1 754w, https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1868&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/436006/original/file-20211207-136955-1vv4ebp.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1868&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">University income changes from 2019 to 2020.</span>
<span class="attribution"><a class="source" href="https://melbourne-cshe.unimelb.edu.au/__data/assets/pdf_file/0007/3957577/australian-unis-and-the-pandemic.pdf">Larkins & Marshman (2021), Impact of the Pandemic on the 2020 Financial Health of 37 Australian Universities</a></span>
</figcaption>
</figure>
<p>The impacts of the pandemic on revenue have been generally less than predicted. About half of Australia’s public universities suffered medium to high financial impacts. Eight universities increased or had essentially the same total income in 2020 as in 2019. </p>
<p>Looking ahead, anticipated increases in other revenue provide a healthy buffer against any further fall in international student revenue.</p>
<h2>COVID halted a decade of growth</h2>
<p>From 2010 to 2019, domestic student enrolments grew by 27% and overseas student enrolments by 56%. Total annual revenue from continuing operations increased by 65% to nearly A$37 billion in 2019. </p>
<p>As a share of revenue, government financial assistance, including student HECS payments, decreased from 56% to 49%. Revenue from fees and charges grew from 23% to 32%.</p>
<p>By the end of 2019, universities’ total equity was $61.5 billion. Many universities, but not all, had a strong buffer to manage the financial challenges of the pandemic.</p>
<p>In mid-2020, amid first-wave lockdowns and border closures, several commentators predicted the impact on international student enrolments would be worse than the actual 2020 outcome. We <a href="https://melbourne-cshe.unimelb.edu.au/lh-martin-institute/insights/modelling-individual-australian-universities-resilience-in-managing-overseas-student-revenue-losses-from-the-covid-19-pandemic">predicted</a> a 2020 fee loss of up to $3.5 billion. It turned out to be $1.16 billion – a 10% reduction in fee income.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Vertical bar chart showing major income sources for Australian university sector in 2020" src="https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=302&fit=crop&dpr=1 600w, https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=302&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=302&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=379&fit=crop&dpr=1 754w, https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=379&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/436009/original/file-20211207-17-124diq6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=379&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Income sources for the Australian university sector in 2020 ($ millions)</span>
<span class="attribution"><a class="source" href="https://melbourne-cshe.unimelb.edu.au/__data/assets/pdf_file/0007/3957577/australian-unis-and-the-pandemic.pdf">Larkins & Marshman (2021) Impact of the Pandemic on the 2020 Financial Health of 37 Australian Universities</a></span>
</figcaption>
</figure>
<p>In February 2021, Universities Australia <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">announced</a> universities had lost $1.8 billion in revenue for 2020 and faced a $2 billion loss in 2021.</p>
<p>In August 2021, federal Education Minister Alan Tudge <a href="https://ministers.dese.gov.au/tudge/financial-review-higher-education-summit-keynote-address">said</a> the sector had begun the year in a relatively strong financial position, with an overall operating surplus of about 2%. He said international student enrolments had fallen by only 5% in 2020 and by 12% by mid-2021 against the record levels of 2019.</p>
<p>Staffing typically accounts for 57% of university spending. Universities Australia <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">reported</a> in February 2021 at least 17,300 university jobs had been lost. By September 2021 the Australia Institute’s Centre for Future Work <a href="https://australiainstitute.org.au/report/an-avoidable-catastrophe/">calculated</a> one in five tertiary education jobs had been lost – including 35,000 at public universities.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-universities-face-losing-1-in-10-staff-covid-driven-cuts-create-4-key-risks-147007">As universities face losing 1 in 10 staff, COVID-driven cuts create 4 key risks</a>
</strong>
</em>
</p>
<hr>
<h2>6 conclusions about the impacts</h2>
<p>The outcomes in 2020 are now well documented. However, mixed messages about revenue losses in 2021 and beyond make for a confusing picture. Based on our <a href="https://melbourne-cshe.unimelb.edu.au/lh-martin-institute/fellow-voices/australian-unis-and-the-pandemic">research</a>, we offer six conclusions.</p>
<p><strong>1. The impact of the pandemic on higher education finances in 2020 was significant but not catastrophic.</strong></p>
<p>For 2020, total revenues fell by 5% or $1.82 billion to $36 billion.</p>
<p>Fees and charges revenue (mostly international student fees) fell by 10% or $1.2 billion.</p>
<p>The loss of investment revenue ($1.3 billion) in 2020 was similar.</p>
<p>Increased government grants and other revenue partly offset these losses.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Bar chart showing changes in university sector income by revenue source from 2019 to 2020" src="https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=264&fit=crop&dpr=1 600w, https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=264&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=264&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=332&fit=crop&dpr=1 754w, https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=332&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/436011/original/file-20211207-19-1ib710b.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=332&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Sector-wide university income changes from 2019 to 2020 ($ millions)</span>
<span class="attribution"><a class="source" href="https://melbourne-cshe.unimelb.edu.au/__data/assets/pdf_file/0007/3957577/australian-unis-and-the-pandemic.pdf">Larkins & Marshman (2021) Impact of the Pandemic on the 2020 Financial Health of 37 Australian Universities</a></span>
</figcaption>
</figure>
<p><strong>2. The impacts on individual universities were highly variable.</strong></p>
<p>Eight universities increased or had essentially the same total income in 2020 as in 2019. They include the three South Australian public universities, four regional universities and ACU as a multistate university. Charles Darwin University reported a sector-high revenue increase of 7.5%. </p>
<p>Ten universities reported revenue losses exceeding 8%. Four were regional, two were in the Group of Eight and three were in Victoria, the state most affected by lockdowns in 2020. ANU reported a sector-high revenue loss of 17.4%. </p>
<p>Among the larger universities, Monash was a standout. It had only a 1.6% revenue loss and a 2.9% increase in fees and charges revenue despite lower international student enrolments.</p>
<p>We conclude the pandemic had a high financial impact on ten universities and a medium impact on another ten.</p>
<p><strong>3. International student enrolments – and hence fees and charges revenue – appear to be <a href="https://campusmorningmail.com.au/news/uni-finances-the-worst-may-be-over/">declining much faster</a> in 2021 than for 2020.</strong></p>
<p>As at September 2021, the Commonwealth’s Provider Registration and International Student Management System (PRISMS) database shows:</p>
<ul>
<li><p>commencing international student enrolments fell by 24% compared to 2020 and by 41% compared to 2019</p></li>
<li><p>for all international enrolments, numbers fell by 13% compared to 2020 and by 17% compared to 2019.</p></li>
</ul>
<p>The initial 4% fall in PRISMS enrolments in 2020 corresponded to a 10% decline in total fees and charges revenue. It appears reasonable, then, to assume the 13% decline in PRISMS enrolments for 2021 might equate to a 20-30% reduction.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-the-international-education-crisis-will-linger-long-after-students-return-to-australia-170360">Why the international education crisis will linger long after students return to Australia</a>
</strong>
</em>
</p>
<hr>
<p><strong>4. Anticipated increases in other revenue in 2021 will provide a healthy buffer against further falls in international student revenue.</strong></p>
<p>University revenue from government grants, student HECS payments and other income increased by 3% in 2020. We expect the <a href="https://www.dese.gov.au/job-ready">Job-Ready Graduates Package</a> and other sources will enable universities to increase revenue from these sources by at least 5%, or $1.1 billion, in 2021.</p>
<p>The Commonwealth also allocated an extra $1 billion in research funding in 2021.</p>
<p>As financial markets have improved significantly since December 2020, investment revenue can be expected (barring another major disruption) to return at least to 2019 levels of $1.3 billion.</p>
<p>These three items combined represent an increase of $3.4 billion.</p>
<p>International fee revenue would need to fall by at least 30% in 2021 to outweigh these gains.</p>
<p>We <a href="https://campusmorningmail.com.au/news/margins-of-safety-the-2021-international-fee-drops-unis-could-cope-with/">conclude</a> that 28 of 37 public universities could sustain greater fee losses in 2021 than in 2020 and still have higher total incomes.</p>
<p><strong>5. If borders reopen and international students return for semester one in 2022, revenue losses will probably bottom out in 2021 and 2022.</strong></p>
<p>Universities are expected to be highly flexible in enrolling international students during 2022. This suggests commencing student numbers will progressively offset the numbers who have completed courses.</p>
<p>Any additional losses in fees and charges revenue in 2022 are likely to be modest and offset by revenue from increasing domestic enrolments.</p>
<p>Responses to new COVID-19 variants remain a significant risk in assessing likely revenue impacts.</p>
<p>The outlooks for individual universities vary greatly. In part, these depend on pandemic impacts on international student markets across various countries. It is unlikely there will be a standard pattern of re-engagement.</p>
<figure class="align-center ">
<img alt="Smiling young woman disembarks from a plane" src="https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/436015/original/file-20211207-19-6lqhce.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">If reopened borders mean international students return in early 2022, revenue losses will probably bottom out in 2021 and 2022.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-strategy-to-revive-international-education-is-right-to-aim-for-more-diversity-172620">Australia's strategy to revive international education is right to aim for more diversity</a>
</strong>
</em>
</p>
<hr>
<p><strong>6. The impact on staffing levels appears to have been disproportionate, with workers employed on casual and fixed-term contracts the worst affected.</strong></p>
<p>Before the pandemic, the <a href="https://www.dese.gov.au/higher-education-statistics/staff-data/selected-higher-education-statistics-2019-staff-data">number of university employees</a> totalled 137,575 full-time equivalent (FTE) positions. In FTE terms, some 95,500 were full-time staff, 17,205 fractional full-time and 24,873 casual.</p>
<p>We extrapolated the numbers of jobs lost by December 2020 based on annual <a href="https://campusmorningmail.com.au/news/pandemic-claims-7500-jobs-in-victorian-universities">reporting by the seven Victorian universities</a> (the only ones to provide such data). These data suggest 20,000 jobs (equating to 7,000 FTE) had been lost across the sector by the end of 2020.</p>
<p>The Centre for Future Work, using ABS data, later <a href="https://australiainstitute.org.au/report/an-avoidable-catastrophe/">calculated</a> public university job losses had risen to 35,000. Extrapolating the Victorian data, this would amount to around 14,000 FTE positions or 10% of the workforce on a FTE basis. The difference between positions lost and the full-time equivalent number suggests casual, fixed-term and part-time staff suffered the greatest impact.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-hit-casual-academics-hard-here-are-5-ways-to-produce-a-better-deal-for-unis-and-staff-155357">COVID hit casual academics hard. Here are 5 ways to produce a better deal for unis and staff</a>
</strong>
</em>
</p>
<hr>
<p>Given recent announcements of further job losses, these estimates may be conservative.</p>
<p>A loss of 10% of the FTE workforce broadly matches the loss of fees and charges income in 2020, though overall revenue fell by only 5%. If university finances do bottom out in 2021, the overall impact of the pandemic has amounted to a fall in annual revenues of around 5%. In this case, university staff appear to have contributed disproportionately to bridging the gap between revenue and expenditure. </p>
<p>It also suggests that, should revenues and the international student market rebuild, either universities will face significant workforce recruitment challenges or they entered the pandemic with significantly oversized workforces.</p><img src="https://counter.theconversation.com/content/172405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While 18 universities suffered medium to high financial impacts, the incomes of eight increased or were stable. Overall revenue fell 5% – less than feared – but 35,000 staff lost their jobs.Ian Marshman, Honorary Principal Fellow, Melbourne Centre for the Study of Higher Education, The University of MelbourneFrank Larkins, Professor Emeritus and Former Deputy Vice Chancellor, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1667502021-09-15T02:50:36Z2021-09-15T02:50:36ZShould I stay or should I go? Academics facing this dilemma should ask themselves 3 questions<figure><img src="https://images.theconversation.com/files/420968/original/file-20210914-21-lrrxzg.jpg?ixlib=rb-1.1.0&rect=7%2C0%2C5112%2C3400&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-frustrated-woman-shocked-by-bad-1075401716">Shutterstock</a></span></figcaption></figure><p>This year my partner and my brother both left academia. They are part of a nation-wide changing of the guard at most universities in Australia and many overseas. </p>
<p>Over <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">17,000 Australian university jobs</a> disappeared in 2020, Universities Australia estimated. It predicted more to come. By May this year an estimated <a href="https://www.abc.net.au/news/2021-09-13/covid-job-cuts-at-universities-prompting-fears-for-future/100447960">one in five positions</a> in higher education had been lost, according to <a href="https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/3830/attachments/original/1631479548/An_Avoidable_Catastrophe_FINAL.pdf?1631479548">an Australia Institute analysis</a>. </p>
<p>Universities have <a href="https://theconversation.com/universities-lost-6-of-their-revenue-in-2020-and-the-next-2-years-are-looking-worse-166749">lost billions in revenue</a> during the COVID-19 pandemic. They saw no alternative to reducing the <a href="https://app.powerbi.com/view?r=eyJrIjoiNThhMjNiZGEtMzlkNy00OWM5LWFmMmEtODFhN2ViNzE4ZGY1IiwidCI6ImRkMGNmZDE1LTQ1NTgtNGIxMi04YmFkLWVhMjY5ODRmYzQxNyJ9">biggest expense</a> on their books: staff salaries. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1356873268423090178"}"></div></p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/universities-lost-6-of-their-revenue-in-2020-and-the-next-2-years-are-looking-worse-166749">Universities lost 6% of their revenue in 2020 — and the next 2 years are looking worse</a>
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</em>
</p>
<hr>
<p>Some academics have left with a smile on their face. They are the ones who were able to take advantage of early retirement, voluntary redundancy or voluntary separation schemes backed by enterprise agreements. Universities such as ANU, Monash, UQ, Griffith, USC, UNSW, Macquarie, Canberra and others offered generous payments to entice staff to exit, reducing their total headcount. </p>
<p>Other departures weren’t so voluntary. Several universities, including Melbourne, UWA, QUT, CQU and others, have made staff redundant in specific areas, sometimes through <a href="https://www.timeshighereducation.com/news/new-wave-redundancies-sweeps-australian-universities">multiple rounds</a>.</p>
<hr>
<p><em><strong>Read more:</strong> <a href="https://theconversation.com/australia-badly-needs-earth-science-skills-but-universities-are-cutting-the-supply-163248">Australia badly needs earth science skills, but universities are cutting the supply</a></em></p>
<p><em><strong>Read more:</strong> <a href="https://theconversation.com/in-a-time-of-covid-and-climate-change-social-sciences-are-vital-but-theyre-on-university-chopping-blocks-166015">In a time of COVID and climate change, social sciences are vital, but they’re on university chopping blocks</a></em></p>
<hr>
<p>To minimise disruption, professional staff who hold service or support roles have been <a href="https://www.universityworldnews.com/post.php?story=20210721154014538">prioritised for cuts</a>. This is a tough sell, especially when their expertise is so valuable with the rapid shift to online learning, increases in students’ peripheral support needs, and new processes brought about by organisational restructures. </p>
<p>Other elephants in the room are now looming large, including unmanageable workloads, increasing administrative burdens, deteriorating working conditions, unhealthy work practices during lockdown (and arguably outside lockdown too). It is no wonder many academics are contemplating whether they still want their jobs.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/our-uni-teachers-were-already-among-the-worlds-most-stressed-covid-and-student-feedback-have-just-made-things-worse-162612">Our uni teachers were already among the world's most stressed. COVID and student feedback have just made things worse</a>
</strong>
</em>
</p>
<hr>
<p>If you’re considering whether you are better off outside academia, the grass may not be greener on the other side. First ask yourself three key questions.</p>
<figure class="align-center ">
<img alt="male worker with belongings packed up in box stands in front of city" src="https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=366&fit=crop&dpr=1 600w, https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=366&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=366&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=459&fit=crop&dpr=1 754w, https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=459&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/420969/original/file-20210914-13-uykvr6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=459&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">People contemplating leaving academia need to fully consider whether the grass really is greener on the other side.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/unemployed-business-man-worker-carrying-packed-1998589127">Shutterstock</a></span>
</figcaption>
</figure>
<h2>1. Is your role secure?</h2>
<p>Alarmingly, <a href="http://honisoit.com/2021/04/casual-university-staff-speak-on-precarious-employment-before-senate-committee/">up to three-quarters of staff</a> in several universities are on casual or fixed-term contracts. Even before COVID-19, the higher education sector was <a href="https://www.smh.com.au/education/casualisation-of-university-workforce-is-a-national-disgrace-20180803-p4zvcm.html">criticised for mass casualisation</a> of its workforce. In defence, <a href="https://choiceaustralia.com.au/2012/11/the-impact-of-casualisation-on-the-australian-workforce/">this trend is being seen across Australia</a> as employers increasingly look to manage overheads in pursuit of economic efficiencies. </p>
<p>Unfortunately, casual academics have also been the <a href="https://www.researchprofessionalnews.com/rr-news-australia-universities-2020-4-casual-academic-staff-overwhelmed-by-online-teaching-demands/">hardest hit</a> by COVID-related impacts on universities. This includes their unrecognised (and therefore unpaid) hours of work required to set up online courses and support business continuity. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wage-theft-and-casual-work-are-built-into-university-business-models-147555">Wage theft and casual work are built into university business models</a>
</strong>
</em>
</p>
<hr>
<p>There is hope: <a href="https://theconversation.com/covid-hit-casual-academics-hard-here-are-5-ways-to-produce-a-better-deal-for-unis-and-staff-155357">there are calls</a> to transfer casual staff to fixed term or continuing positions. Anecdotally, executive staff are hearing these calls. Some universities are investigating their options to recognise the work casuals do through flexible but more secure employment arrangements.</p>
<p>Academics in continuing positions may feel lucky, and let’s not forget their employer-provided superannuation is <a href="https://www.superannuation.asn.au/ArticleDocuments/359/rc1003_Employercontributionstosuperannuation.pdf.aspx?Embed=Y">nearly twice as generous as in most other industries</a>. When considering jobs in other sectors, be aware they may not offer the generous leave provisions for academics. This includes longer-than-typical sick leave, parental leave, recreational leave and long-service leave. </p>
<h2>2. Is the flexibility worth the workload?</h2>
<p>Ask any academic whether they have enough time to complete the work their role requires of them; the answer will be a firm “No”. Unmanageable workloads pose a <a href="https://www.timeshighereducation.com/blog/we-must-confront-culture-overwork-tackle-academias-mental-health-crisis">serious risk to mental health</a>. However, “success” in an academic career typically requires individuals to defy the odds when it comes to producing high-volume, high-quality work. </p>
<p>Early-career academics <a href="https://www.tandfonline.com/doi/full/10.1080/0309877X.2019.1636213">usually feel overwhelmed</a> by such an expectation. It can drive them to leave the industry. In response to this challenge, academic workload models now exist in many universities, despite <a href="https://www.timeshighereducation.com/news/academic-workload-models-tool-exploit-staff-and-cut-costs">concerns raised overseas</a> about their value in improving working conditions. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/early-and-mid-career-scientists-face-a-bleak-future-in-the-wake-of-the-pandemic-144350">Early and mid-career scientists face a bleak future in the wake of the pandemic</a>
</strong>
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<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1298077637579948032"}"></div></p>
<p>Flexible working conditions are a great benefit of academic work. COVID-19 has resulted in other industries <a href="https://theconversation.com/with-management-resistance-overcome-working-from-home-may-be-here-to-stay-144850">realising the value</a> of supporting staff to “work from anywhere”. It has meant many academics have continued to earn while in lockdown, a privilege not afforded to all Australians. </p>
<p>But, as with all adults who are increasingly working from home, juggling the load along with housework and schooling from home challenges us all – arguably <a href="https://www.smh.com.au/business/workplace/this-lockdown-women-are-once-again-doing-more-of-the-housework-home-schooling-20210727-p58d94.html">even more so women</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-covid-is-widening-the-academic-gender-divide-146007">How COVID is widening the academic gender divide</a>
</strong>
</em>
</p>
<hr>
<h2>3. Can you still pursue your intellectual passions?</h2>
<p>A deep commitment to scholarship <a href="https://melbourne-cshe.unimelb.edu.au/__data/assets/pdf_file/0010/1490923/The_Academic_Profession_in_Transition_Sept2011.pdf">draws people to academia</a>. A genuine passion for a discipline, field or topic also lays the foundation for a career dedicated to pursuing new knowledge and having an impact. These rewarding aspects of academia can seem hidden at present, especially when academics need to focus their efforts on <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-021-11040-z">other urgent, reactive tasks</a>. </p>
<p>Some academics have opportunistically pivoted into COVID-19 related research. The pandemic has sparked a new-found intellectual pursuit, backed by <a href="https://www.sydney.edu.au/news-opinion/news/2020/05/07/new-medical-foundation-invests-in-covid-19-research-funding.html">several COVID-targeted funding opportunities</a>, including from the <a href="https://www.health.gov.au/ministers/the-hon-greg-hunt-mp/media/further-investment-in-three-new-australian-covid-19-vaccine-research-projects">Medical Research Future Fund</a>. </p>
<p>Universities <a href="https://theconversation.com/seven-ways-universities-benefit-society-81072">undeniably benefit a society at its core</a>, particularly their endeavours to address societal challenges and foster positive change. However, they are not without their professional criticisms. </p>
<p>The coming years will bring further changes to the way education is delivered to communities, but must also bring innovative improvements that support and nurture academics to succeed in their work. </p>
<p><em>Correction: this article previously included La Trobe in a list of universities that had involuntary redundancies. La Trobe has now been removed from that list.</em></p><img src="https://counter.theconversation.com/content/166750/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Ball receives funding from the National Health and Medical Research Council, RACGP Foundation, VicHealth and Queensland Health.</span></em></p>The pandemic is forcing many academics to consider their future. These are tough times for universities and many have lost jobs, but those fortunate enough to have a choice should weigh up all options.Lauren Ball, Associate Professor and Principal Research Fellow, Menzies Health Institute, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1675422021-09-12T20:05:23Z2021-09-12T20:05:23ZNew analysis shows Morrison government funding won’t cover any extra uni student places for years<figure><img src="https://images.theconversation.com/files/420196/original/file-20210909-13-mdgmct.jpg?ixlib=rb-1.1.0&rect=1550%2C125%2C5438%2C3615&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The federal government’s promise to deliver more student places through its <a href="https://www.dese.gov.au/job-ready">Job-ready Graduates Package</a> was hollow rhetoric, as <a href="https://melbourne-cshe.unimelb.edu.au/lh-martin-institute/fellow-voices/the-rhetoric-and-reality-of-job-ready-graduates">research</a> released today demonstrates. </p>
<p>From university <a href="https://www.dese.gov.au/collections/higher-education-providers-2021-2023-funding-agreements">funding agreements</a>, we now know the maximum subsidy payable to each university from 2021 to 2023. </p>
<p>My research shows the total amount made available isn’t enough to provide subsidies for any extra student places, let alone the extra 30,000 this year announced by Treasurer Josh Frydenberg in his <a href="https://joshfrydenberg.com.au/latest-news/budget-2021-2022/">budget speech</a> in May.</p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/5dxzMQRo3wQ?wmode=transparent&start=1632" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Federal Treasurer Josh Frydenberg delivers the budget in May.</span></figcaption>
</figure>
<p>One year ago, the government legislated major changes to higher education funding, marketed as Job-ready Graduates. In selling these changes, the then education minister, Dan Tehan, <a href="https://ministers.dese.gov.au/tehan/afr-higher-education-summit-address">said</a>:</p>
<blockquote>
<p>“[…] our government wants more Australians to have the opportunity to benefit from a university education. Because of the surge in demand caused by the COVID-19 recession we need those additional places from next year. Doing nothing for one or two years will not help the year 12s of 2020 and the Australians looking to retrain in 2021. Deferring our economic recovery helps no one and risks scarring a generation.”</p>
</blockquote>
<p>The changes meant that, on average, student contributions should increase while government subsidies for student places decrease. An increase in student places was one of the major reasons given for accepting these changes. If we could rely on the government rhetoric about its policy, then every year this decade we should have seen more working-age Australians able to enrol in higher education than ever before.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-2021-22-budget-has-added-salt-to-universities-covid-wounds-160862">The 2021-22 budget has added salt to universities' COVID wounds</a>
</strong>
</em>
</p>
<hr>
<h2>What did the government promise?</h2>
<p>The Job-ready Graduates promise was to increase the total subsidy for student places over time. This growth was in recognition of the extra demand that would arise in areas of high population growth and from the “<a href="https://www.smh.com.au/politics/federal/five-anus-two-unsws-unis-not-ready-for-looming-costello-baby-boom-20200227-p544yq.html">Costello baby boom</a>” generation reaching university age. </p>
<p>The government promised <a href="https://www.aph.gov.au/api/qon/downloadattachment?attachmentId=33abc621-8ecb-4aa7-af2c-0f72babd351e">27,000 extra domestic student places</a> in 2021 and nearly 100,000 by 2030. In 2019, there were <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp2021/GovernmentFundingHigherEducation">627,545 Commonwealth-supported student places</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Table from government response to questions on notice about how many new Commonwealth-supported places there will be each year." src="https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=149&fit=crop&dpr=1 600w, https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=149&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=149&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=187&fit=crop&dpr=1 754w, https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=187&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/420198/original/file-20210909-21-sodx2n.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=187&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The government response to questions on notice about how many new Commonwealth-supported places there will be each year.</span>
<span class="attribution"><a class="source" href="https://www.aph.gov.au/api/qon/downloadattachment?attachmentId=33abc621-8ecb-4aa7-af2c-0f72babd351e">Commonwealth Parliament</a></span>
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<p>The government doesn’t fund a set number of student places. Under the Job-ready Graduates arrangements, it sets the maximum subsidy it will pay to a university for student places. Each student place attracts a set subsidy, with the amount varying depending on its discipline.</p>
<p>Each university is free to decide the number and mix of student places it provides. But it is paid the subsidy for student places only up to the maximum amount set for it by the government. If it provides places beyond its subsidy cap, it receives only the student contribution. This would usually not be enough to cover costs.</p>
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<strong>
Read more:
<a href="https://theconversation.com/3-flaws-in-job-ready-graduates-package-will-add-to-the-turmoil-in-australian-higher-education-147740">3 flaws in Job-Ready Graduates package will add to the turmoil in Australian higher education</a>
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<p>I <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment/JobReadyGraduates/Submissions">advised</a> the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment/JobReadyGraduates">Senate committee inquiry</a> into the changes that it was a mystery how the government had produced its estimate of the number of student places to be created. We now know the maximum subsidy payable to each university from 2021 to 2023 from the publicly available <a href="https://www.dese.gov.au/collections/higher-education-providers-2021-2023-funding-agreements">funding agreements</a> of universities. We also know how this maximum amount is proposed to increase each year to 2030.</p>
<h2>Unis continue to be short-changed on subsidies</h2>
<p>With Job-ready Graduates, the government appeared to radically change its attitude to funding student places from the previous three years. In 2018 and 2019, it froze funding. In 2020, subsidies increased by less than inflation. These decisions effectively reduced the number of government-subsidised student places. </p>
<p>By 2019, there were 27,800 places in the system from which the government was withholding over A$322 million in subsidies.</p>
<p>Universities were bearing that cost when COVID-19 hit in 2020. The government response to the pandemic, notably closing the borders to international students, continues to <a href="https://theconversation.com/universities-lost-6-of-their-revenue-in-2020-and-the-next-2-years-are-looking-worse-166749">reduce the revenue</a> universities receive.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/universities-lost-6-of-their-revenue-in-2020-and-the-next-2-years-are-looking-worse-166749">Universities lost 6% of their revenue in 2020 — and the next 2 years are looking worse</a>
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<p>Hidden in the detail of the transition to Job-ready Graduates is another source of subsidy shortfall that will further limit universities’ ability to provide student places. “Grandfathered students” are students who started their courses before the changes took effect in 2021. They are protected from having to pay higher student contributions. To ensure funding for their places is not severely cut, the old, higher government subsidy rate continues for them. </p>
<p>In reality, university subsidy limits do not adequately allow for these grandfathered students. The shortfall is likely to be around $300 million over the time they take to complete their courses. Around $200 million relates to the period from 2023 to 2025.</p>
<h2>Shortfall exceeds $1 billion by 2024</h2>
<p>The total amount of government subsidy over the next decade is shown in the chart below.</p>
<iframe title="Subsidies delivered vs subsidies needed for extra places" aria-label="Interactive line chart" id="datawrapper-chart-DOUMa" src="https://datawrapper.dwcdn.net/DOUMa/4/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="500"></iframe>
<p>The amount made available in 2021 is not enough to provide subsidies for any additional student places. The combined effect of the changes since 2018 is that, in 2021, the government has underdelivered on its promised subsidy level by the equivalent of 39,000 student places – the 27,000 extra places promised under Job-ready Graduates and 12,000 places in the system since 2019 that remain unsubsidised.</p>
<p>While the shortfall reduces over time, by 2024 the government is still subsidising around 14,000 fewer student places than it promised. It would need to provide about $1.1 billion more in subsidy from 2021 to 2024 to honour the claims it made to the public and the parliament.</p>
<p>The government explicitly set student contributions to influence student choices. It was trying to encourage students into disciplines that it considered would make them job-ready. If students respond as desired, they will shift from disciplines with low subsidies into more highly subsidised disciplines. </p>
<p>If successful, however, this policy would increase the average cost of subsidy per place. And that would reduce the number of subsidised places that universities could provide within their maximum subsidy level.</p>
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<strong>
Read more:
<a href="https://theconversation.com/the-government-would-save-1-billion-a-year-with-proposed-university-reforms-but-thats-not-what-its-telling-us-142256">The government would save $1 billion a year with proposed university reforms — but that's not what it's telling us</a>
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<p>If the government was serious about ensuring universities were able to support Australia’s economic recovery, it could have adopted a policy that was both more effective and simpler. As a first step, it could have provided the subsidies to support the student load already in the system in 2019. It could then have increased subsidy levels so that from 2021 to 2023 working-age Australians have the same opportunities to undertake higher education that they had from 2014 to 2017 before the funding freeze.</p>
<p>In the long term, the rate of growth in subsidies may restore these opportunities, but that time is two elections away. By then, reducing government debt may be the priority. If the government of the day decides to abandon the policy of increasing subsidies each year, it will not require any legislative change.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/big-spending-recovery-budget-leaves-universities-out-in-the-cold-160439">Big-spending 'recovery budget' leaves universities out in the cold</a>
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<img src="https://counter.theconversation.com/content/167542/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Warburton is an associate of PhillipsKPA and a member of the Australian Labor Party.</span></em></p>The subsidies for student places up to 2024 fall about $1.1 billion short of the level needed to create the extra places the government promised its Job-ready Graduates policy would deliver.Mark Warburton, Honorary Senior Fellow, Centre for the Study of Higher Education, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1666702021-09-09T02:51:26Z2021-09-09T02:51:26ZWhy universities may come to regret the costs of City Deals and private sector ‘solutions’<figure><img src="https://images.theconversation.com/files/419948/original/file-20210908-22-dercyp.jpg?ixlib=rb-1.1.0&rect=492%2C0%2C1655%2C1098&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.planning.nsw.gov.au/News/2019/New-WSU-Bankstown-Campus-plans-on-exhibition">NSW Department of Planning, Industry and Environment</a></span></figcaption></figure><p>Universities have had few sources of capital funds since the Abbott government sidelined the <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2018/November/Education_Investment_Fund">Education Investment Fund</a> in 2014. The loss of an estimated <a href="https://www.universitiesaustralia.edu.au/media-item/covid-19-to-cost-universities-16-billion-by-2023/">A$16 billion of income</a> by 2023 due to the COVID-19 pandemic has simply added to this problem.</p>
<p>The <a href="https://www.infrastructure.gov.au/cities/city-deals/">City Deals</a> process is one option, but for most universities it’s a poisoned chalice. A university will have to make a large financial contribution to the project and bears the risk of any cost overruns. These deals were conceived in the salad days prior to 2020 and now look decidedly wilted.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/think-big-why-the-future-of-uni-campuses-lies-beyond-the-cbd-151766">Think big. Why the future of uni campuses lies beyond the CBD</a>
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<h2>How do these City Deals work?</h2>
<p>The <a href="https://www.infrastructure.gov.au/cities/city-deals/perth/">Perth City Deal</a>, for example, includes a <a href="https://www.mediastatements.wa.gov.au/Pages/McGowan/2021/06/Joint-media-statement-Edith-Cowan-University-awards-five-major-contracts-in-multi-million-dollar-Perth-City-Deal-milestone.aspx">$695 million project</a> for Edith Cowan University. With the Commonwealth providing $245 million and the state government $150 million, ECU must stump up $300 million and hand over its <a href="https://www.ecu.edu.au/about-ecu/our-campuses/mount-lawley-campus">perfectly serviceable Mount Lawley campus</a> to the state government. The upshot is that the university will spend much more than would be needed to upgrade that campus for the dubious benefit of moving it 6km to the CBD. </p>
<p>The Australian Department of Infrastructure <a href="https://www.infrastructure.gov.au/cities/city-deals/index.aspx">describes</a> City Deals as “a genuine partnership between the three levels of government and the community to work towards a shared vision for productive and liveable cities”. The Perth deal is clearly a boost for the CBD and the Western Australian construction industry. The benefits to teaching or research at ECU are less easy to identify. </p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/FqP0YsJRaGY?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">The announcement in September 2020 of the Edith Cowan University CBD campus move.</span></figcaption>
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<p>The <a href="https://www.infrastructure.gov.au/cities/city-deals/darwin/">Darwin City Deal</a> commits Charles Darwin University (CDU) to a new campus in the Darwin CBD. CDU teaches 70% of its student load online, but it will end up with four campuses in Darwin with a combined capacity of well over 10,000 students to teach the 4,000 enrolled for on-campus study. The prospect of more students from China, which was a key component in planning for the project, has disappeared. </p>
<p>The deal required CDU to take out a $151.5 million loan from the Northern Australia Infrastructure Facility (<a href="https://naif.gov.au/">NAIF</a>). While the interest rate is low, the capital component must be paid back. </p>
<p>Again, this project is a boost for the Northern Territory construction industry, but it may well reduce CDU’s capacity to spend on teaching and research. As a result of longstanding financial pressures, CDU has already <a href="https://www.abc.net.au/news/2020-11-19/charles-darwin-university-job-cuts-77-positions-to-go/12900216">sacked 77 staff</a> and scrapped courses.</p>
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<figcaption><span class="caption">Charles Darwin University has finalised the design of the campus being constructed in Darwin CBD.</span></figcaption>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-fad-not-a-solution-city-deals-are-pushing-universities-into-high-rise-buildings-147560">A fad, not a solution: 'city deals' are pushing universities into high-rise buildings</a>
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<p>Another option is to spend nothing on infrastructure. The University of Adelaide has announced a complete halt to such spending for the foreseeable future. It still plans to attract “top talent” with its ageing facilities. Quite how this will work is unexplained.</p>
<h2>Developers are in it for the profits</h2>
<p>Other universities have struck deals with developers. These can range from <a href="https://www.timeshighereducation.com/news/more-australian-universities-turn-toproperty-speculation">selling university assets</a> and leasing them back, or signing up to a long-term lease on new purpose-built space using a special purpose vehicle (SPV), doing developments using university land, or other financial wizardry.</p>
<p>Charter Hall, a real estate investment company, has signed up Western Sydney University to <a href="https://www.theurbandeveloper.com/articles/charter-hall-western-sydney-university-partner-on-350m-innovation-quarter">several deals</a> with a combined value of around a billion dollars. A new <a href="https://www.westernsydney.edu.au/newscentre/news_centre/more_news_stories/construction_commences_on_charter_hall_and_western_sydney_universitys_westmead_innovation_quarter">$350 million campus</a> is being built in the CBD of Bankstown. </p>
<p>Charter Hall has openly <a href="https://thefifthestate.com.au/articles/charter-hall-leading-in-new-universities-asset-class/">said</a> its aim is to create a new asset class in university buildings and campuses. This approach effectively privatises campus assets, nearly all of which were paid for with public money and charitable donations.</p>
<p>Western Sydney University is selling a newly built neighbourhood shopping centre and an adjoining residential development site. This was developed with Charter Hall on land controlled by the university, which <a href="https://www.westernsydney.edu.au/westerngrowth/projects/caddens-corner">says</a>: “The Caddens Corner project is part of the Western Growth strategy, reshaping the University’s campus network, and allowing the University to maximise its investment in the core university activities of teaching, engagement and research.”</p>
<p>This is an interesting proposition, as teaching, engagement and research are all essentially operational, not capital, costs. In other words, the university is selling public assets to fund recurrent costs while planning to have <a href="https://www.westernsydney.edu.au/content/dam/digital/pdf/OFIN3453-Western-Growth-Brochure_WEB.pdf">13 campuses</a> to educate not many more students than Macquarie University, which has one.</p>
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<figcaption><span class="caption">The Western Sydney University campus in Bankstown CBD is explicitly part of an urban growth strategy.</span></figcaption>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/3-planning-strategies-for-western-sydney-jobs-but-do-they-add-up-139386">3 planning strategies for Western Sydney jobs, but do they add up?</a>
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<p>In Melbourne, Swinburne University has put a seven-storey office building on Flinders Lane back <a href="https://www.afr.com/property/commercial/swinburne-uni-tower-resale-to-show-pandemic-impact-on-values-20200724-p55f9b">on the market</a> just one year after buying it for $44 million. In June, RMIT University in Melbourne brought forward plans to offload a 14-storey strata property on Bourke Street for <a href="https://www.afr.com/property/commercial/rmit-to-offload-property-in-melbourne-cbd-20200624-p555nk">more than $120 million</a> and lease it back for five years. </p>
<h2>A good time to borrow and build</h2>
<p>Certainly, getting a developer to build a facility and lease it back to the university will reduce the need for capital. For similar reasons, a low-income household might choose a rental purchase arrangement to get a flat-screen TV. But like any rental purchase agreement, the short-term benefits pale in comparison to the long-term costs. </p>
<p>And universities are certainly about the long term. Four universities in Australia are more than 125 years old and they are youngsters compared to Harvard (385), Leiden (436), Oxford (925) or Bologna (933).</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/a-century-that-profoundly-changed-universities-and-their-campuses-151765">A century that profoundly changed universities and their campuses</a>
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<p>Another option for universities is to borrow money from a bank. If the universities can’t afford to do that, then they can’t afford to get developers to borrow money on their behalf and build them buildings while the developers also make a profit. There is no secret sauce and definitely no magic pudding.</p>
<p>Borrowing to fund the replacement or refurbishment of buildings at the end of their economic life is financially prudent providing benefits outweigh costs. University leaders might need to learn how to resist the temptation to make every building an “icon”, but capital investments to support teaching and research are rational and responsible. With interest rates as low as they will ever be and building costs a long way below the peak of the next cycle, now is an ideal time to build.</p><img src="https://counter.theconversation.com/content/166670/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoff Hanmer is managing director of ARINA and a member of the Australian Institute of Architects, the Association of Consulting Architects, the Architectural Association and SAHANZ.</span></em></p>A capital funding squeeze led universities to seek new ways of developing their campuses. It now appears city CBDs and developers might do better out of those deals than universities.Geoff Hanmer, Honorary Professional Fellow, Faculty of Design, Architecture and Building, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1667492021-08-29T20:05:56Z2021-08-29T20:05:56ZUniversities lost 6% of their revenue in 2020 — and the next 2 years are looking worse<figure><img src="https://images.theconversation.com/files/418159/original/file-20210827-16-wng5wo.jpg?ixlib=rb-1.1.0&rect=508%2C0%2C2750%2C1832&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/sydney-australia-jun-20-2016-dramatic-1443923891">Shutterstock</a></span></figcaption></figure><p>With a 6% drop in revenue, 2020 was a year Australian universities would prefer to forget, a report released today by the Mitchell Institute shows.</p>
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<a href="https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=849&fit=crop&dpr=1 600w, https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=849&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=849&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1067&fit=crop&dpr=1 754w, https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1067&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/418149/original/file-20210826-15869-124dkgl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1067&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Mitchell Institute report into investment in higher education.</span>
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<p>The report, <a href="https://www.vu.edu.au/mitchell-institute/newsroom/reports">Australian investment in higher education</a>, analyses over a decade of data to trace changes in university policy and the impact of the COVID-19 pandemic. It shows university revenue fell by A$2.2 billion, down 6% from 2019. Operating surpluses across the sector fell by A$1.6 billion.</p>
<p>The main cause of the falls was reduced international student revenue and income from investments, such as dividends.</p>
<p>The silver lining to the clouds over 2020 was the losses were not as bad as expected. But our analysis points to some very dark clouds on the horizon for Australia’s universities. </p>
<p>Special <a href="https://www.dese.gov.au/2020-21-budget-research-package">government support</a> for the sector <a href="https://theconversation.com/the-2021-22-budget-has-added-salt-to-universities-covid-wounds-160862">ends in 2021</a>. Continuing border closures mean international student revenue is likely to keep falling.</p>
<p>In 2022 and 2023, universities will have to navigate some of the most challenging conditions they have ever faced.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-hopes-of-international-students-return-fade-closed-borders-could-cost-20bn-a-year-in-2022-half-the-sectors-value-159328">As hopes of international students' return fade, closed borders could cost $20bn a year in 2022 – half the sector's value</a>
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<h2>Decades of strong revenue growth ended abruptly</h2>
<p>Universities had experienced <a href="https://www.uts.edu.au/research-and-teaching/our-research/centre-business-and-social-innovation/news/rethinking-australian-higher-education">an almost unbroken run of growth</a> in revenue since 1995. The chart below shows increases in total revenue from 2009 to 2019, before the pandemic caused a fall in 2020.</p>
<p><iframe id="Dv3cJ" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Dv3cJ/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>There are two main reasons for the growth universities experienced. </p>
<p>The first was the introduction of demand-driven funding in 2012. This uncapped the number of government-funded places for domestic students. The result was increases in enrolments.</p>
<p>The second was the growth in international student numbers.</p>
<p>By 2020, both these sources of growth had come to a halt. However, investment income was the biggest contributor to the drop in revenue in 2020, falling by A$1.1 billion compared to 2019.</p>
<p>As the chart below shows, the combined impact of these factors meant university surpluses fell.</p>
<p><iframe id="P5ij4" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/P5ij4/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>In 2020, operating results across the sector were a total surplus of A$680 million, a 1.6% margin. This is well below the <a href="https://www.uts.edu.au/research-and-teaching/our-research/centre-business-and-social-innovation/news/rethinking-australian-higher-education">6% margin</a> generally considered to be financially prudent.</p>
<p>Fifteen of the 38 universities included in the analysis reported a deficit in 2020. Operating surpluses were concentrated in the three largest universities – <a href="https://www.theaustralian.com.au/higher-education/universities-post-451m-operating-surplus-despite-pandemic/news-story/8aa99692b38b4730a9f90e3de437e360">Monash (A$267 million), Melbourne (A$178 million)</a> and <a href="https://www.smh.com.au/politics/federal/university-of-sydney-reports-2-2m-loss-in-remarkable-rebound-20210422-p57lh4.html">Sydney (A$107 million)</a>.</p>
<p>The extent of losses and shrinking surpluses in 2020 suggests the pandemic has already made it difficult for universities to cope with further falls in revenue forecast for 2021 and beyond.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/which-universities-are-best-placed-financially-to-weather-covid-154079">Which universities are best placed financially to weather COVID?</a>
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<h2>What has happened to international student revenue?</h2>
<p>In the short term, the greatest challenge universities face is continuing problems with enrolling international students. Since 2015, revenue from this source had almost doubled. In 2019, it totalled about A$10 billion.</p>
<p>In 2020, international student revenue fell in real terms by A$868 million, or 8.6%, to A$9.2 billion. </p>
<p>This fall was less than expected. We suggest the timing of border closures and <a href="https://internationaleducation.gov.au/research/research-snapshots/Documents/RS_DefermentUpdate2020.pdf">students deferring their courses</a> (but remaining enrolled) mean it has taken time for the disruption to international student enrolments to be fully felt.</p>
<p>The chart below shows how international student enrolments at universities began to fall in 2020. By December 2020, trend levels were about 10% below what they were in December 2019.</p>
<p><iframe id="Gfuzc" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Gfuzc/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>As the pandemic progresses, the drop in international enrolments is accelerating. In the first six months of 2021, international student enrolments at public higher education institutions fell at an annualised trend rate of between 20% and 24%.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-international-education-market-share-is-shrinking-fast-recovery-depends-on-unis-offering-students-a-better-deal-162856">Australia's international education market share is shrinking fast. Recovery depends on unis offering students a better deal</a>
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<p>This suggests every missed six-monthly intake of international students is collectively costing universities about A$1 billion to A$1.2 billion.</p>
<h2>What lies ahead?</h2>
<p>With border closures set to continue, universities face a difficult future.</p>
<p><a href="https://www.dese.gov.au/research-block-grants/research-support-program">Federal government support</a> of an extra A$1 billion in research funding is due to finish in 2021.</p>
<p>The <a href="https://www.dese.gov.au/job-ready">Job-Ready Graduates Package</a> introduced in 2020 means universities are likely to be asked to enrol <a href="https://theconversation.com/the-government-is-making-job-ready-degrees-cheaper-for-students-but-cutting-funding-to-the-same-courses-141280">more domestic students for less money</a> if they wish to maintain government funding levels.</p>
<p>Our report highlights that Australian universities have increasingly been encouraged to collect fee-for-service and commercial revenue. Government support as a proportion of total revenue has fallen.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/big-spending-recovery-budget-leaves-universities-out-in-the-cold-160439">Big-spending 'recovery budget' leaves universities out in the cold</a>
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<p>This has made universities more vulnerable to economic shocks, like the one caused by the pandemic and international border closures.</p>
<p>Universities play very important roles in Australia’s society and economy. Without further support, parts of the university sector are likely to face very difficult choices that will mean further cuts to <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">staffing</a>, <a href="https://independentaustralia.net/life/life-display/students-stiffed-as-universities-cut-courses-to-save-money,15416">courses</a> and <a href="https://theconversation.com/7-6-billion-and-11-of-researchers-our-estimate-of-how-much-australian-university-research-stands-to-lose-by-2024-146672">research</a>.</p><img src="https://counter.theconversation.com/content/166749/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Revenue fell by more than $2 billion in 2020 – less than feared – but universities are increasingly vulnerable to worsening conditions, with losses of international students accelerating.Peter Hurley, Policy Fellow, Mitchell Institute, Victoria UniversityMelinda Hildebrandt, Policy Fellow, Mitchell Institute, Victoria UniversitySam Hoang, Project Officer, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1540792021-02-03T19:01:26Z2021-02-03T19:01:26ZWhich universities are best placed financially to weather COVID?<figure><img src="https://images.theconversation.com/files/381544/original/file-20210201-19963-1nfkytc.jpg?ixlib=rb-1.1.0&rect=513%2C369%2C5475%2C3449&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">William Potter/Shutterstock</span></span></figcaption></figure><p>2021 is when the impacts of COVID-19 really start to take their toll on universities, as more than <a href="https://www.abc.net.au/news/2021-01-19/covid-international-students-anxious-return-australia/13069472">140,000</a> international students seek to return to study in Australia. My new analysis, presented in this article, reveals that if one in five international students don’t re-enrol, the loss of revenue would plunge half of all Australian universities into financial turmoil or budget deficit. While the impacts of COVID are unprecedented, modelling universities’ financial resilience shows which institutions fare better and why.</p>
<p>International students generated <a href="https://www.dese.gov.au/higher-education-publications/resources/2019-higher-education-providers-finance-tables">A$10 billion in fee revenue</a> for universities in 2019. This in turn drives <a href="https://theconversation.com/interactive-international-students-make-up-more-than-30-of-population-in-some-australian-suburbs-140626">jobs, local industry</a>, <a href="https://theconversation.com/7-6-billion-and-11-of-researchers-our-estimate-of-how-much-australian-university-research-stands-to-lose-by-2024-146672">research</a> and Australia’s reputation as a destination for quality higher education.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/2021-is-the-year-australias-international-student-crisis-really-bites-153180">2021 is the year Australia's international student crisis really bites</a>
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<p>Recent <a href="https://www.vu.edu.au/sites/default/files/international-student-update-2020-mitchell-institute.pdf">modelling</a> by the Mitchell Institute estimated more than <a href="https://theconversation.com/covid-to-halve-international-student-numbers-in-australia-by-mid-2021-its-not-just-unis-that-will-feel-their-loss-148997">300,000 fewer international students</a> would be studying inside Australia by mid-year, if travel restrictions continued.</p>
<p>Universities employ <a href="https://www.dese.gov.au/higher-education-statistics/resources/2020-staff-numbers">more than 130,000 staff</a> at <a href="https://universityreviews.com.au/map-of-australian-universities/">200 campus locations</a> across Australia. Many of these <a href="https://theconversation.com/more-than-10-000-job-losses-billions-in-lost-revenue-coronavirus-will-hit-australias-research-capacity-harder-than-the-gfc-138210">jobs could be at risk</a>. Universities Australia figures <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">show</a> at least 17,300 have already been lost.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-to-halve-international-student-numbers-in-australia-by-mid-2021-its-not-just-unis-that-will-feel-their-loss-148997">COVID to halve international student numbers in Australia by mid-2021 – it's not just unis that will feel their loss</a>
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<h2>Revenue and reputation: a self-reinforcing cycle</h2>
<p>In total, <a href="https://www.dese.gov.au/higher-education-statistics/resources/2019-section-2-all-students">32% of all full-time-equivalent enrolments</a> at Australian universities are international students. About a quarter (<a href="https://www.dese.gov.au/higher-education-publications/resources/2019-higher-education-providers-finance-tables">24%</a>) of all university revenue comes from these students. Universities’ operating revenue <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">fell 4.9%</a> in 2020, with an estimated <a href="https://www.universitiesaustralia.edu.au/media-item/17000-uni-jobs-lost-to-covid-19/">5.5%</a> fall to come in 2021.</p>
<p>International student fees are correlated with university rankings but are also a self-reinforcing cycle: more international students generate more revenue to fund more research, which in turn leads to better rankings and more demand.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chart showing links between student fee revenue, university resources and reputation." src="https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=575&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=575&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=575&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=723&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=723&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381236/original/file-20210128-21-o7t9u8.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=723&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">International student revenue increases university resources, which enhances reputation, which in turn attracts more international students.</span>
<span class="attribution"><span class="license">Author provided</span></span>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/new-global-ranking-system-shows-australian-universities-are-ahead-of-the-pack-152313">New global ranking system shows Australian universities are ahead of the pack</a>
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<p>Another risk factor for universities is the concentration of enrolments from just a few source countries. They are also concentrated in the largest institutions. One in four international students (<a href="https://www.dese.gov.au/higher-education-statistics/student-data">25%</a>) study at one of these five universities: Monash, RMIT, Melbourne, Sydney or UNSW. </p>
<p>The leading source of international students in Australia is China, with 36% of these students. It’s followed by India (14%), Malaysia (7%), Singapore (5%) and Nepal (4%). Just one or two geographic markets dominate international enrolments at most universities.</p>
<iframe title="Enrolments from top 5 source countries by university" aria-label="Stacked Bars" id="datawrapper-chart-fYfB7" src="https://datawrapper.dwcdn.net/fYfB7/2/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="1063"></iframe>
<h2>International students aren’t the only risk factor</h2>
<p>The worst-hit universities may be those with small pre-COVID operating margins and high reliance on concentrated international student revenue.</p>
<p>My analysis shows a 20% fall in international student fee revenues would leave 22 universities in deficit or on the brink with a net operating result (revenue minus expenses) of 1% or less.</p>
<p>Those with a higher reliance on international students, less diverse revenue streams or a lower return on equity fare worse in the post-COVID modelling. The chart below shows the impact on university net operating results of five scenarios involving decreases in international students by 10%, 20%, 30%, 40% and 50%. </p>
<iframe title="Reduction in operating results scenarios" aria-label="Dot Plot" id="datawrapper-chart-R9sZY" src="https://datawrapper.dwcdn.net/R9sZY/2/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="863"></iframe>
<p>The net result decreases more dramatically for those with both a high reliance on international students and a limited operating buffer. In other words, the risks already existed – COVID amplified them.</p>
<h2>Universities need a buffer to absorb shocks</h2>
<p>Many Australian universities rely heavily on revenue from international students as part of their business model and global profile. Twelve rely on international student fees for more than 30% of their total income.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Table of universities that receive more than 30% of their total revenue from international student fees" src="https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=453&fit=crop&dpr=1 600w, https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=453&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=453&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=569&fit=crop&dpr=1 754w, https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=569&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/382097/original/file-20210202-13-b4fs.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=569&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://www.dese.gov.au/higher-education-publications/finance-publication">Data source: Department of Education, Skills and Employment, Finance Tables</a>, <span class="license">Author provided</span></span>
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<p>While all the universities in the above table are registered not-for-profits, they need to remain financially sustainable. Any organisation involved in high-stakes global markets should have a buffer against rare and unexpected shocks such as the COVID pandemic. A requirement for financial buffers was legislated in the US following the global financial crisis but still remains a <a href="https://www.federalreserve.gov/econres/notes/feds-notes/the-liquidity-coverage-ratio-and-corporate-liquidity-management-20200226.htm">vexed issue</a>.</p>
<p>The average net <a href="https://www.dese.gov.au/higher-education-publications/finance-publication">pre-COVID operating result</a> for Australian universities was a healthy 5.6%. However, several started the year with a result of less than 1%. These universities included Charles Darwin (-3.1%), Notre Dame (-2.6%), New England (-1.4%), Macquarie (0.14%), Central Queensland (0.71%) and Charles Sturt (0.77%).</p>
<p>These results raise important questions for university boards. What is a responsible operating result considering the risks of the business and the markets in which it operates? Was “pandemic” already identified in risk registers? And what was done about it?</p>
<p>Significant revenue write-downs leave institutions with only a few levers to buffer the COVID shock while minimising risks to quality.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/7-6-billion-and-11-of-researchers-our-estimate-of-how-much-australian-university-research-stands-to-lose-by-2024-146672">$7.6 billion and 11% of researchers: our estimate of how much Australian university research stands to lose by 2024</a>
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<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chart showing top 10 operating results for universities assuming a 20% fall in international student fee revenue" src="https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=379&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=379&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=379&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=476&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=476&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381287/original/file-20210129-23-6cw49p.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=476&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.dese.gov.au/higher-education-publications/finance-publication">Author analysis of modelling using data from Department of Education, Skills and Employment, Finance tables</a></span>
</figcaption>
</figure>
<p>On average, the above top ten universities generate 20% of their revenue from international student fees. The sector average is 24%.</p>
<p>The University of Melbourne gets 31% of its revenue from international student fees. That’s higher than the average, but its very healthy pre-COVID operating result of 13.9% provides breathing space.</p>
<p>Newcastle, QUT, Edith Cowan and the Sunshine Coast are in the top ten universities, but under this model have a potential post-COVID result of less than the sector average of 5.6%. Their risk exposure to international student fee revenue is still average or lower.</p>
<h2>How should universities respond?</h2>
<p>Three main conclusions can be drawn.</p>
<p>First, to underpin their financial sustainability and avoid risks to quality, universities must consider not only their reliance on international student fee revenue and market concentration, but also strategies to understand and define their appetite for risk.</p>
<p>Second, the model for online education when travel across borders is limited could be a long-lasting effect of COVID. Long-term strategies and regulatory practices to deal with this “new normal” of global higher education will be needed, beyond temporary regulatory flexibility.</p>
<p>Third, disruption to higher education is here to stay. Waiting for a time when the view on the horizon is clear for all to see may be too late. </p>
<p>Global higher education requires a new organisational ambidexterity. That means universities must revisit core operating models, re-imagine future potential and succeed on the <a href="https://hbr.org/2015/12/what-is-disruptive-innovation">disruptive edge</a>.</p>
<hr>
<p><em>Note: Department of Education, Skills and Employment <a href="https://www.dese.gov.au/higher-education-publications/resources/2019-higher-education-providers-finance-tables">finance tables</a> used for this analysis may differ from institutional reports due to various accounting methods.</em></p><img src="https://counter.theconversation.com/content/154079/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Omer Yezdani does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If one in five international students don’t re-enrol, the loss of revenue would plunge half of all Australian universities into budget deficit or financial turmoil.Omer Yezdani, Director, Office of Planning and Strategic Management, Australian Catholic UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/605862016-06-08T12:18:31Z2016-06-08T12:18:31ZHow to take free public higher education from pipe dream to reality<figure><img src="https://images.theconversation.com/files/125531/original/image-20160607-15034-yhbwy7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students have been agitating for an end to public university fees in South Africa.</span> <span class="attribution"><span class="source">Nic Bothma/EPA</span></span></figcaption></figure><p>Universities are any nation’s key public institutions of knowledge development. They drive research, teach students and supervise postgraduates. By producing and disseminating knowledge, universities can fulfil their mandate as institutions of social, economic, cultural and intellectual development for democratic societies and the global environment. </p>
<p>It’s not easy to reconcile the costs of education with narrow economic goals alone. The remit of education is simultaneously individual, social and global. It has qualitative attributes that can’t be measured in conventional ways. Higher education is a public good. Providing free education to all citizens has inestimable value and limitless possibilities.</p>
<p>This is especially true in South Africa today. The country is in transition from a <a href="http://www.sahistory.org.za/article/apartheid-and-reactions-it">traumatic past</a>. Its universities must respond to the many and profound challenges faced by the state and society. The challenges faced by universities are fundamental to the reconstruction of post-apartheid society. This is why universities should be funded as comprehensively as possible, allowing them to discharge their important socioeconomic, political and cultural mandates to the best of their capabilities.</p>
<p>Free public higher education for all is <a href="https://theconversation.com/quality-free-university-education-is-necessary-and-possible-53654">possible and necessary</a>. In this article, based on a submission made to the recent <a href="http://www.justice.gov.za/commissions/FeesHET/docs.html">Commission of Inquiry into Higher Education and Training</a>, or “Fees Commission”, we will explain how to make it a reality. </p>
<h2>Research for a deeper understanding</h2>
<p>The starting point for any change is dedicated research. This must examine the costs of quality public education and must create space to open up the fiscal debate. Once this is done, ordinary South Africans can begin to understand what democratic choices could be made to inform fiscal and other policy decisions about the provision of education and potential funding sources.</p>
<p>Very importantly, research must be conducted that examines how institutional funding choices are made.</p>
<p>Student funding in South Africa depends on a variety of sources. These include parents’ contributions, bank loans, and the goodwill of business and charitable institutions; the contributions of universities who are themselves <a href="http://www.dhet.gov.za/summit/Docs/2015Docs/Annex%203_DHET_Progress%20with%20transformation%20_What%20do%20the%20data%20say.pdf">underfunded</a>; as well as other bursaries and scholarships from the public and private sector. </p>
<p>All of these sources are unsustainable. None carry any legal obligation to fund students in the first place. This is even true in the case of parents, many of whom are likely to depend on bank loans for such funding.</p>
<p>The government must increase funding by at least an aggregate amount equal to the ratio <a href="https://data.oecd.org/eduresource/public-spending-on-education.htm">achieved</a> in Organisation for Economic Cooperation and Development (OECD) countries. In 2011, South Africa’s <a href="http://www.dhet.gov.za/summit/Docs/2015Docs/Annex%203_DHET_Progress%20with%20transformation%20_What%20do%20the%20data%20say.pdf">state budget for universities</a> as a percentage of gross domestic product was 0.75%, which is more or less in line with Africa as a whole (0.78%). But it lags behind when compared with OECD countries (1.21%) and the rest of the world (0.84%).</p>
<p>No student who meets the requirements for admission to a university course should be excluded for financial reasons. Students should be funded for the “full cost of study”. This includes registration and other fees, accommodation, costs of meals, travel and books. Universities should also receive a subsidy per student from public funds that is sufficient for its recurrent operations. </p>
<p>Such a subsidy is crucial to ensure what has been called both “financial and epistemic access to university education”. In other words it’s not just about getting students into university, it’s about tackling the push-out rate – those who are unable to finish their studies – and actively retaining those students who’ve traditionally borne a higher burden.</p>
<p>A determined state should examine the structure of personal taxation that could be levied for the top 10% of income earners in the country and for high-net-worth individuals – people who earn an annual income of more than R7 million (about US$474,000 at current rates) or have assets of more than R70 million. This could generate a substantial increase in available public revenue to fund higher education. </p>
<p>This approach concentrates on the structural aspects of inequality. It puts tax revenues to good use. Some have mooted the idea of a differentiated approach to the “rich” and the “poor”. In this model, a basic means test is applied to all students. But many South African students fall into the “<a href="https://theconversation.com/in-south-africa-university-is-open-to-rich-and-poor-but-what-about-the-missing-middle-36801">missing middle</a>” – their parents don’t earn enough to pay fees, but they earn too much to qualify for state funding.</p>
<p>Our proposal supports the idea that those who earn the most pay for their children’s education through taxation and the distribution of public funds – rather than through an individually based “wealthy user pays” model. Ours is a more democratic model of public interest and public funding than individual philanthropy or subsidy – which, we argue, is not sustainable.</p>
<h2>Students have responsibilities, too</h2>
<p>But, in our model, students will not simply take their fully funded qualifications and run. All students will be regarded as beneficiaries of public funding. They will be viewed as participants in a system that prioritises the public good. As such, they’ll be expected to contribute to society when leaving university – through community service and by working in public institutions after graduation. </p>
<p>This approach will support the creation of socially cohesive attitudes among students. It is, we believe, necessary for genuine, far-reaching structural and systemic change.</p>
<p>For our suggestions to work, students should be widely consulted before any final decision is made. It is they, after all, who have led the charge for “fee-free” education. Such consultation should be meaningful, open and frank. Choices can’t be left entirely to “experts”, “advisors”, “consultants” and the agents of institutions that represent a narrow, fiscal-driven approach to the provision of public goods like higher education.</p>
<h2>Equality is the goal</h2>
<p>Of course, making education free will not magically make all individuals equal. But the spirit of the sort of policy we’re proposing must actively aim to end the culture of individualism, corporatisation and unnecessary managerialism that is pervasive in the university system. </p>
<p>This is important because of the role that higher education can play in a society with <a href="http://www.tradingeconomics.com/south-africa/unemployment-rate">high levels of unemployment</a> and <a href="https://theconversation.com/factcheck-is-south-africa-the-most-unequal-society-in-the-world-48334">chronic inequality</a>. Until now, education has been about elite transition within the framework of an ethic defined by the present market-driven capitalist system. This has engendered both uncritical thinking and an isolation from the key issues facing the vast majority of society – in particular the black working classes and marginalised communities.</p>
<p>A properly funded university system is necessary to engender and encourage cooperation, collegiality, collaboration and a new social compact based on a set of values in which knowledge is not commodified and is socially relevant.</p>
<p><em>Authors’ note: An extensive piece on these issues has been submitted to the New South African Review and a submission made to the Fees Commission. For further information, please contact lead author Salim Vally on salimvally1@gmail.com</em></p><img src="https://counter.theconversation.com/content/60586/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Free public higher education is possible and necessary. It’s also realistic, if it’s based on thorough research, consultation and students giving back through community service after graduation.Salim Vally, Director of the Centre for Education Rights and Transformation and Associate Professor of Education, University of JohannesburgEnver Motala, Researcher, Social Sciences, University of Fort HareLeigh-Ann Naidoo, PhD Scholar, Wits School of Education, University of the WitwatersrandMondli Hlatshwayo, Senior Researcher in Labour Studies and Education, University of JohannesburgRasigan Maharajh, Chief Director: Tshwane University of Technology – Institute for Economic Research on Innovation; Node Head: DST/NRF Coe SciSTIP; and Professor Extraordinary: Stellenbosch University – Centre for Research on Evaluation, Science and Technology, Tshwane University of TechnologyZolisa Marawu, Researcher at the Centre for Integrated Post-School Education and Training, Nelson Mandela UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/370932015-04-20T20:13:29Z2015-04-20T20:13:29ZUniversity balance sheets tell us only some are right to cry poor<p>With all but one exception, the vice-chancellors of Australia’s universities came out in support of fee deregulation, or removing the government’s caps on university fees, because they said current funding was unsustainable. </p>
<p>So with the release of some universities’ annual reports over the last few weeks we’re able to see how the universities are really faring. Vice-chancellors have already come out telling us <a href="http://www.theaustralian.com.au/higher-education/unis-warn-financial-surplus-inflated/story-e6frgcjx-1227306746651">not to be fooled by surpluses on the balance sheet</a>. So is the financial situation really as dire as they say, as rosy as their <a href="https://theconversation.com/drawing-positives-from-negatives-looking-back-at-the-higher-education-reforms-38890">detractors</a> say, or somewhere in between?</p>
<h2>Australia’s universities – where are we at?</h2>
<p>In February, the University of South Australia’s David Lloyd <a href="http://www.theaustralian.com.au/national-affairs/education/uni-vc-warns-of-funding-chaos/story-fn59nlz9-1227209716608">bemoaned the policy and funding chaos</a> he has found since moving to Australia from Ireland. However, the University of Canberra’s Stephen Parker <a href="http://www.abc.net.au/news/2015-03-16/parker-uni-deregulation-ideological-motives-laid-bare/6323014">sees the funding system</a> as pretty good.</p>
<p>An opportunity is emerging to better reflect on the state of Australia’s universities, as they release their (calendar year) annual reports. They have been coming in dribs and drabs, dictated by an anomaly that requires their tabling in state parliaments on various dates. Some interesting patterns are emerging.</p>
<p>First was Western Australia – whose mixed bag of results set the trend that has been repeated in Queensland and Victoria. In Western Australia, Murdoch’s <a href="http://www.abc.net.au/news/2014-10-24/murdoch-vice-chancellor-in-corrupt-investigation-resigns/5840806">organisational woes</a> coincided with a steep decline in its financial fortunes.</p>
<p>Digging a little deeper, <a href="http://www.murdoch.edu.au/About-us/Annual-report/_document/2014-Annual-Report/2014-Annual-Report.pdf">Murdoch’s results</a> were primarily driven by higher costs, static revenues and lower investment returns.</p>
<p>Later came Queensland and Victoria. Griffith, focused on two main campuses that span the south-east corner of Queensland, provides an insight into the emerging pressure the sector is confronting. </p>
<p>Its Commonwealth grant payments (essentially that part of the revenue stream contributed by the Commonwealth to pay for undergraduate education) increased from A$498 million to A$519 million between 2013 and 2014, while employee and other expenses increased from A$728 million to A$753 million during the same period.</p>
<p>All universities make up the difference primarily from student fees. Much of this comes from international students and domestic postgraduates – the majority of whom study in the increasingly contested business, commerce and economics fields.</p>
<p>In many ways, Murdoch and Griffith are exemplars in a sector under strain. During the last few years, the sector’s primary union, the National Tertiary Education Union, has had much success in “pattern bargaining” – achieving similar income increases across various universities, while also seeing pathways established for academic casuals into more secure “teaching focused” roles.</p>
<p>Both of these successes come with financial costs, and there was little concomitant increase in revenue for many universities in 2014. At Murdoch, student numbers were down, while costs were up in line with inflation and awarded salary increases. </p>
<p>Investment returns in 2014 (important as universities hold financial assets to offset long-term employee liabilities like long service leave) were down, both as ASX returns reduced from 2013 and also as interest rates halved. In organisations running on very tight margins, the impact on notional returns has been acute.</p>
<h2>Winners and losers?</h2>
<p>Australia’s universities are often considered somewhat tribal groups – the Australian Technology Network (or ATN - technology universities like UTS and RMIT), the Group of Eight (Australia’s most prestigious universities including the Universities of Sydney and Melbourne) and the regionals, for example. Is there evidence that any are riding out the current uncertainty better than others?</p>
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<p>What is clear from the above table is that generalisations are hard to make. No one grouping of universities seems to doing better than any other.</p>
<p>It is clear that those most impacted by the <a href="https://theconversation.com/learning-from-victorias-tafe-mistakes-34646">problems in Victoria’s vocational education and training system</a>, dual-sector institutions Victoria University and Swinburne, are struggling. </p>
<p>Monash is doing well – but much of its surplus is driven by one-off investment gains. <a href="https://www.monash.edu/__data/assets/pdf_file/0003/179715/annual-report-2014.pdf">Its annual report stated:</a>:</p>
<blockquote>
<p>While $52 million of this [operating result] was due to the restructure of our investment portfolio and had no cash impact, the remainder still speaks to university-wide effort and wise financial management.</p>
</blockquote>
<p>Curiously, some of the lower-ranked universities (in terms of global rankings) are doing the best financially. Toowoomba’s USQ, for example, was the most profitable university among those reporting. It has had good student growth, with limited increases in staffing costs. </p>
<p>It will be important to monitor if such financial success comes at a longer-term cost to research performance and community engagement.</p>
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<p></p>
<p>While it’s not really justified for all vice-chancellors to be crying poor, there are certainly some universities operating at losses, and many with very slim profit margins relying heavily on unpredictable investment returns. </p>
<p>Whether or not universities should be allowed to set their own fees and charge students what they like is a question for another person, another day, but it does appear that some of our institutions of higher learning need a more stable funding arrangement than what they have currently - one that relies heavily on international students enrolments and uncertain future funding arrangements.</p>
<p>The competitive environment that the government seeks comes with serious duplication and waste. Universities are spending vast sums competing for students and spending large amounts of much-needed cash on marketing and advertising. </p>
<p>The system as a whole would perform far better if these resources were directed to teaching, research and community engagement. Surely that is what we want of our universities.</p><img src="https://counter.theconversation.com/content/37093/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice works for the University of New England, however the views expressed in this article are his own. He is a member of the NTEU and the ALP. He has previously received funding from the ARC, ALTC and the Centre for Work Life at the University of Melbourne. He previously held an executive management role at the National Centre for Vocational Education Research, a government funded agency.</span></em></p>With the release of some universities’ annual reports over the last few weeks we’re able to see how the universities are really faring. Is the financial situation really as dire as vice-chancellors say, as rosy as their detractors say, or somewhere in between?John Rice, Professor of Management, University of New EnglandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/254682014-04-10T09:12:57Z2014-04-10T09:12:57ZIs the new student loan system more progressive than its predecessor?<p>Nearly three-quarters of graduates will not clear their student loans before the end of the repayment period. This means the large majority of those who go to university aged 18 or 19 will still be paying off their loans well into their forties and early fifties. </p>
<p>The new higher education finance system, introduced in 2012, will leave graduates with much more debt than under the system it replaced. But graduates who do less well in the labour market will actually end up paying back less than before, while middle and especially high earners will pay back much more. In that sense, the system is more progressive than the one it replaced and looks, for most graduates, rather like a graduate tax.</p>
<p>A <a href="http://www.ifs.org.uk/comms/r93.pdf">new report</a> published by the Institute for Fiscal Studies, and funded by the Sutton Trust, examines the implications for graduates of the new student loan system that accompanied the higher tuition fees introduced in 2012.</p>
<p>These reforms increased the cap on undergraduate tuition fees for UK and EU students from £3,375 to £9,000 per year, while scrapping teaching grants paid by the government to universities for most students. </p>
<p>Students are entitled to borrow the full amount of these higher tuition fees – plus an additional means-tested amount to cover living costs – from the government. They repay this at a rate of 9% of the income they earn above a repayment threshold (increased from £15,795 under the old system to £21,000 under the new system). Any outstanding debt is forgiven after 30 years – extended from 25 years under the old system.</p>
<p>We find that students will, on average, now leave university with more than £44,000 in debt – £20,000 more than under the old system. </p>
<p>This means graduates will pay back an average of £35,446 in today’s prices, compared with £20,936 under the old system, an additional £14,510. Yet 73% of all graduates will not have repaid their debt in full by the end of the 30 year repayment period (at which point it is written off). </p>
<p>In part, this is because average annual repayments will be lower under the new system than under the old system, because of the higher threshold above which loans must now be repaid. The graph below splits graduates into ten equally sized groups (deciles) on the basis of their lifetime earnings. It shows that the 30% lowest earning graduates will, on average, pay back less in total under the new system than under the old one. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=318&fit=crop&dpr=1 600w, https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=318&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=318&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=399&fit=crop&dpr=1 754w, https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=399&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/46020/original/58tvc8bv-1397059950.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=399&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Total real repayments and as a share of real lifetime earnings across distribution of graduate lifetime earnings (all in 2014 prices)</span>
<span class="attribution"><span class="source">IFS. Note: The % figures represent the average total repayments in 2014 prices in each decile as a percentage of the average lifetime earnings (also in 2014 prices) in that decile. These figures apply to young full-time English-domiciled students studying at the 90 largest universities in England. </span></span>
</figcaption>
</figure>
<p>But because mid-to-higher-earning graduates (those from the fourth to the tenth deciles) will be repaying their loans for longer under the new system, they will end up repaying substantially more per year later on in their careers – after the point at which they would have repaid their loans in full under the old system. </p>
<p>For example, we estimate that a middle-earning graduate – someone whose annual earnings are higher than half of all graduates at each age (including those out of work) – would have cleared their debt by age 42 under the old system. </p>
<p>Under the new system, however, they will still owe around £38,000 in today’s prices at this age. This means that they will have to pay back around £1,500 a year (in today’s prices) throughout their forties and early fifties. They will still not have cleared their debt by the end of the 30 year repayment period, at which point they would have around £31,000 written off. </p>
<p>The increase in initial loans and reduction in the repayment threshold mean that graduates will now be making student loan repayments for substantially longer. On average, it will take graduates 28 years to clear their debt (by repayment or write-off), an increase from 19 years under the old system. Even among graduates who would repay in full, the average length to clear one’s debt increases from 16 to 22.5 years.</p>
<p>The new higher education finance system has secured an increase in resources for universities by increasing the contributions made by mid-to-higher earning graduates later in their careers. The system is more progressive than the one it replaced, but many graduates are still paying back substantially more than they did before. Whether you think these reforms are an improvement on the previous system depends on how you weight these different priorities.</p><img src="https://counter.theconversation.com/content/25468/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Claire Crawford receives funding for her research from a range of government departments, research councils, charitable trusts and other organisations, including the Economic and Social Research Council, the Nuffield Foundation, the Department for Education, Universities UK, the Education Endowment Foundation and the Sutton Trust. All of her research is independent and the views expressed in this article are entirely her own.</span></em></p><p class="fine-print"><em><span>Wenchao Jin work on the student fee regime has been funded by the Sutton Trust. Her employer the Insitute for Fical Studies receives grants from Economic and Social Research Council. </span></em></p>Nearly three-quarters of graduates will not clear their student loans before the end of the repayment period. This means the large majority of those who go to university aged 18 or 19 will still be paying…Claire Crawford, Assistant Professor, Economics Department, University of WarwickWenchao Jin, Research economist, Institute for Fiscal StudiesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/229262014-02-11T05:50:40Z2014-02-11T05:50:40ZMerger with UCL a new chapter for Institute of Education<figure><img src="https://images.theconversation.com/files/41156/original/f4v592tx-1392031178.jpg?ixlib=rb-1.1.0&rect=0%2C36%2C953%2C682&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Change beckons.</span> <span class="attribution"><span class="source"> kmoliver</span></span></figcaption></figure><p>There were mixed feelings at the Institute of Education last week, after it was announced that it was <a href="http://www.timeshighereducation.co.uk/news/ucl-set-to-merge-with-institute-of-education/2011121.article">planning to merge</a> with University College London (UCL). </p>
<p>In some ways, it was a particularly poignant moment for me, as someone who first joined the Institute as a Post Graduate Certificate of Education student in 1968, returned for my Master’s degree in 1972, joined the staff as a professor in 1992 and then spent more than ten years as the institute’s director. </p>
<p>Yet it does not mark the end of the Institute of Education, but rather the next stage in its development. Although the announcement seems to have taken some people by surprise, it is actually an <a href="http://www.ioe.ac.uk/75390.html">extension of a strategic partnership</a> that has developed between the two institutions over the past year or more. </p>
<p>The Institute of Education has already had a number of incarnations during its 112 years. It started life as the <a href="http://www.ioe.ac.uk/about/62082.html">London Day Training College</a>, a partnership between the London County Council and the University of London. In 1932, it became the University of London Institute of Education and was run for many years as part of the central university. It was only in 1987 that it was granted autonomy within the federal university, with its own royal charter and its current name of Institute of Education, University of London.</p>
<h2>Economies of scale and reputation</h2>
<p>As director of the institute during its centenary celebrations in 2002, I have a keen awareness of this history. But I also recognise that we need to respond to changing circumstances. Although autonomy helped us develop to where we are now, it limits our capacity to move to the next stage. We cannot benefit from economies of scale found in multi-faculty universities and, like other specialist institutions, we are heavily exposed to risk when public policy in our particular field changes. </p>
<p>In the international context, we spend a great deal of time explaining what the Institute of Education is. We also have to explain why it does not appear in mainstream league tables and why it cannot join the <a href="http://www.russellgroup.ac.uk/">Russell Group</a> of 24 leading universities. </p>
<p>We succeeded in persuading the <a href="http://www.ioe.ac.uk/studentInformation/41459.html">China Scholarship Council</a> that we should be on their approved list. But we know of other organisations that will not even contemplate supporting our students because, although we ride high in the <a href="http://www.topuniversities.com/subject-rankings">QS subject rankings</a>, we are not seen as a department of a world-leading multi-faculty university. </p>
<p>When I first became director, there was discussion of a possible merger with the London School of Economics. This had its attractions, as the two institutions had common Fabian roots and it would have created a formidable world centre for the social sciences. But while the Institute of Education is predominantly a social science institution, it also needs to relate to many other disciplines. </p>
<p>A few years later, we created a consortium of the various specialist colleges in Bloomsbury, which brought some academic collaborations. However, there was little appetite for greater integration. </p>
<p>Becoming a faculty in UCL makes geographical and academic sense. We share at least one building and we are in the same academic league. If the Institute of Education had been part of UCL in the <a href="http://www.rae.ac.uk/">2008 Research Assessment Exercise</a>, which measures the quality of research in the UK, UCL would have risen from 11th to 9th in the overall league table.</p>
<p>Furthermore, the institute – an overwhelmingly postgraduate institution – recently embarked on a significant expansion of undergraduate numbers. Rather than developing a whole new infrastructure for this, it makes sense to join with an institution that already has well-established undergraduate provision.</p>
<h2>No need to lose the IOE brand</h2>
<p>There are, of course, legitimate fears about loss of identity. But the <a href="http://www.ucl.ac.uk/slade">Slade School of Fine Art</a> and the <a href="http://www.bartlett.ucl.ac.uk/">Bartlett</a> School of Architecture are strong brands within UCL, as is the <a href="http://www.ucl.ac.uk/ich/homepage">Institute of Child Health</a>, which itself joined UCL a few years ago. </p>
<p>Internationally, in our own field, the <a href="http://www.oise.utoronto.ca/oise/Home/index.html">Ontario Institute for Studies in Education</a> was successfully integrated into the University of Toronto, and the <a href="http://www.nie.edu.sg/">National Institute of Education in Singapore</a> is part of Nanyang Technological University. <a href="http://www.tc.columbia.edu/">Teachers College Columbia</a>, perhaps our closest peer, is also part of one of the leading universities in the United States.</p>
<p>These institutions have a variety of different governance arrangements within their parent universities. It will be for the present management of the institute to secure appropriate arrangements within UCL, as well as proper protection for staff and students. </p>
<p>But, in principle, a merger need not be a threat to the vision and mission of the Institute of Education. </p>
<p>As one of my predecessors put it when we discussed merger a decade ago, the test must be whether the institute is better able to pursue its mission successfully as part of a multi-faculty university rather than alone. In my view, the balance of advantage has shifted significantly in the past 10 years. </p>
<p>UCL’s strapline is “<a href="http://www.ucl.ac.uk/">London’s Global University</a>”. The institute is already at the heart of London education and it is also a major international player in its field. The potential synergies are huge. Now we need to realise them in the Institute of Education, University College London. </p><img src="https://counter.theconversation.com/content/22926/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoff Whitty is affiliated with the Institute of Education, University of London </span></em></p>There were mixed feelings at the Institute of Education last week, after it was announced that it was planning to merge with University College London (UCL). In some ways, it was a particularly poignant…Geoff Whitty, Research Professor in Education , Bath Spa UniversityLicensed as Creative Commons – attribution, no derivatives.