COVID-19 is reshaping the world as we know it, and its impact will likely be felt across all sections of Australian society for many years to come. One institution which has been particularly impacted is our universities. These institutions felt the impact of the coronavirus earlier than most, as over 100,000 Chinese students were left unable to enter Australia from China after the Australian government banned all non-resident travellers in early February.
As universities face an uncertain future with severe budget shortfalls, a vulnerability has been exposed which some had been warning of for a long time: Australian universities are too reliant on international students, and particularly those from China.
Tertiary education is one of Australia’s most successful exports, accounting for 8 per cent of our total export market in 2018-19. While Australia’s reputation as a quality tertiary service provider has drawn many foreign students, some have raised concerns that Australia’s universities have become too reliant on international students as a source of income.
While international students come from all over the world, including an increasing number from India, by far the largest group are from mainland China. A 2019 report by Salvatore Babones, an Associate Professor from the University of Sydney, found that approximately 50 per cent of international students across major Australian universities were from China, with Chinese students’ fees accounting for anywhere between 13 to 23 per cent of their total revenues. Babones describes universities’ approach to Chinese international students as “high-risk” and a “multi-billion-dollar gamble”. With their budgets so heavily reliant on students from China, Australian universities are particularly vulnerable to shifts in the international student market, such as the one being caused by COVID-19.
So what does COVID-19 mean for the future of Australian universities?
In the early days of the travel ban, some universities hoped the damage caused by COVID-19 could be kept to a minimum. The University of Melbourne delayed the start of semester with an optimism that the ban would soon be lifted, while other institutions announced they would allow international students the option to enroll late or defer studies.
In late February, some universities attempted to subvert the travel ban by offering students financial grants for them to travel through a third country (such as Thailand) so they could enter Australia. Not only was this move condemned as risky, it also showed an extreme short-sightedness in dealing with the systemic problem of an over-exposure to a particular overseas student market. In more recent weeks, universities have been rushing to move their classes entirely online, where they will likely remain for some time.
As travel bans continue and the federal and state/territory governments start to put in place tougher social distancing policies, universities will be facing an even murkier future.
The loss of international students’ business is likely to be sustained for the remainder of the academic year and longer than the period of the virus taking hold itself. The travel bans have left many international students angry and confused, with some in the industry believing the reputation of Australian universities overseas will take a hit. It may take some time for international student numbers to reach what they were in 2019, and in the meantime, universities will be severely out-of-pocket.
Last week, the University of Tasmania announced it will cut the number of degrees being offered to remain financially sustainable. Vice-Chancellor Rufus Black said that an “over reliance” on international students from China and the fallout from COVID-19 contributed to this decision. This is a difficult move which will impact both local and international students, and potentially signals the direction that other universities may need to follow.
Studying abroad in Australia can be an excellent way for foreign students to engage with Australian people, and to learn about our culture and values. It’s also a valuable opportunity for local students to benefit from the exchange of ideas by studying within a more diverse student cohort. Australian universities have for too long narrowly viewed international students as sources of larger income compared to local students and have built unsustainable business models as a result. COVID-19 has not only exposed this vulnerability, but exacerbated it, leaving the university sector scrambling to find a more sustainable business model for the coming months and years ahead.
Callum Irving is a Chinese and International Relations student at Macquarie University, with a particular interest in East-Asian geopolitics.