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.
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University efforts to retain online students neglect the main causes of most dropouts. They tend see these as beyond their control, but a new study shows why they need to rethink their approach.
Australia’s major competitors in the international education market are already rebounding from the pandemic and have issued record numbers of student visas.
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.
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.
The budget splashed out extra money for almost every sector deemed important to economic recovery (or politically sensitive). But with universities in a state of financial crisis, they missed out.
International students have been admirably persistent in studying online for more than a year. But as other countries open their doors, Australia risks losing them if it fails to show they are wanted.
Our current quarantine capacity would take six months to handle the return of 150,000 existing students, but 70,000 new students every six months would also be needed to halt the fall in enrolments.
Treating online education as a cheap alternative to lectures will be a mistake. At first universities will probably have to allow more preparation time and invest more in training and technology.
The focus on rankings has been more a symptom than a cause of the challenge Australian universities face, namely a structural change in their revenue base.
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.
A collapse in revenue and a lack of government support have led to university workforces being decimated to cut costs. This presents a number of longer-term risks for universities and the nation.
Australian universities face a huge revenue hit from falling international student numbers due to COVID-19 and tensions with China. Some institutions should consider merging rather than downsizing.
For every $1 lost in university tuition fees, there is another $1.15 lost in the broader economy. This means loss of university revenue can cost the Australian economy more than $40 billion by 2023.
The University of Sydney took in about A$750 million from international students in 2017. Two-thirds of that – about $500 million – came from international students from China.
Top contributors
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Policy Fellow, Mitchell Institute, Victoria University
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Honorary Principal Fellow, Melbourne Centre for the Study of Higher Education, The University of Melbourne
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Professor Emeritus and Former Deputy Vice Chancellor, The University of Melbourne
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Policy Fellow, Mitchell Institute, Victoria University
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Professiorial Fellow, The University of Melbourne
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Professor in Marketing, Charles Darwin University
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Associate Professor in Political Economy, University of Sydney
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Melbourne Centre for the Study of Higher Education, The University of Melbourne
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Chief Data Officer, University of the Sunshine Coast
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Masters Graduate, University of Liverpool
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Senior Associate, Grattan Institute
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Senior Lecturer in Higher Education, The University of Melbourne
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Honorary Fellow, Asia Institute, The University of Melbourne
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Senior Lecturer, Economics, University of Technology Sydney
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Honorary Senior Fellow, LH Martin Institute, The University of Melbourne
