Following a Reserve Bank decision to cut interest rates in May, the dollar has dropped almost 12%, reaching its lowest point since 2010 – around US$0.90. Experts predict it will hover around US90c for the rest of the year before dropping towards US$0.85 next year.
This is good news for international education which has seen enrolments slide over the last few years as the cost of study soared due to the high dollar (a result of the country’s commodities boom). Overseas student expenditure fell from $18.1 billion in FY2009-10 to $14.7 billion in FY2011-12, with tougher visa rules in 2009 (since reformed), attacks on Indian students and an increasingly competitive student market also to blame.
In a statement, chief executive of Universities Australia, Belinda Robinson, said the drop would make “a world-class education at an Australian university a more affordable proposition for millions”.
“The recently released International Student Survey by Australian Education International showed how important affordability was for international students,” she said.
“51 per cent of international students in Australia were satisfied with living costs… compared with 87 per cent of students with their overall experience”
“It found that 51 per cent of international students in Australia were satisfied with living costs. This compared with 87 per cent of students who were satisfied or very satisfied with their overall experience and 88 per cent of students who were satisfied or very satisfied with support services.”
The survey, which drew responses from tens of thousands of international tertiary, vocational and English language students, also found dissatisfaction with the cost of accommodation and ease of earning money while studying. As The PIE reported earlier this month, there have also been complaints about the soaring costs of using the public healthcare system; general living and transport costs are thought to be too high as well.
The dollar will ease such costs, but Phil Honeywood, head of the International Education Association Australia, said government action was still needed to make Australia truly competitive. “Until such time as these key issues are addressed, the fall in the Australian dollar will only provide assistance to our international education sector at the margins.”
Others add that a lower dollar may benefit some sectors more than others. International higher education students, for example, are often willing to ignore currency price fluctuations, viewing study abroad as a long term investment in their career and possibly a route to migration. English language schools, which offer a higher volume of short courses, could feel more benefit however.
The impact on English language schools could be more marked
“As the most commoditised of all the education sectors, I believe the strong dollar had the biggest negative impact on the English language sector,” Sue Blundell, CEO of English Australia, told The PIE News.
“Whilst the sector has worked hard to ensure that students get real value from their educational experience, the cost of study and living expenses has been a deterrent to some markets. As a result, I believe that any decline in the exchange rate is going to have a significant positive impact.”
According to modelling from IEAA released in 2012, Australia’s international education sector is expected to bottom out in 2013-14 at AUS$14 billion before returning to full health by 2020.