In recent weeks, the auditor-generals of the three eastern mainland states, Queensland, New South Wales and Victoria, have warned universities they are too reliant on international student revenue particularly from a limited number of source countries.

“We’re interested in getting behind that category of ‘other'”

“International students are a less reliable customer base than domestic students, as numbers of the former are subject to change due to external factors in other nations,” the NSW auditor-general found in its 2018 audit of universities.

“As the sector’s dependence on fee revenue from overseas students increases, it will need to monitor circumstances abroad, and actively manage its recruitment programs to increase the diversity of the source countries that make up the overseas student base.”

In an interview with The PIE News, Tertiary Education Quality and Standards Agency chief executive Anthony McClaran said the findings of the three reports provided contextual background for its work regulating Australian higher education providers, and would more closely look at source markets as part of its financial review of providers.

“We conduct an annual risk assessment of every provider in the Australia higher education system, we look at it against eleven key indicators, two of those indicators are financial viability and financial sustainability,” he said.

“We are looking to see how providers are opening up other markets and successfully recruiting from them, in the spirit of the business principle of making sure that your sources of income are as diverse as possible.”

McClaran said flattening demand from China was a substantial concern, with the country ramping up its domestic offerings and improving university prestige in academic rankings. Year to March data shows Chinese commencements shrank to single-digit percentage growth for the first time in four years.

While there is pause for thought around source markets, McClaran watered down concerns that universities were too reliant on international student revenue in general.

“For 93% of the universities in the system, income from overseas students is not their largest source of revenue,” he said.

Increased scrutiny of HEI’s source markets may cause a level of alarm among providers, who’ve voiced concerns that efforts to diversify their student cohorts have been stymied by visa rejections from emerging markets, particularly Africa.

“For 93% of the universities… income from overseas students is not their largest source of revenue”

McClaran said while TEQSA liaised with other government agencies, including the Department of Home Affairs and Austrade, it was not the regulator’s role to determine visa policy.

Meanwhile, education minister Dan Tehan has confirmed that he will proceed with looking at ways to tighten English proficiency, after asking TEQSA for advice on the matter in February.

TEQSA’s response in March, which has been obtained by The PIE, indicated the regulator found no evidence of systematic failure to adhere to English proficiency standards but recommended two changes to improve current systems.

Those included the improved collection of English language information in the Provider Registration and International Student Management System and the adoption of the ELICOS Standards 2018 into the National Standards for Foundation Programs.

“We’re particularly interested in looking for more information about the equivalence to recognised English language tests on which students have been admitted,” McClaran said.

“A very significant proportion of students have been admitted with what are described very, very generically as ‘other qualifications’. We’re interested in getting behind that category of ‘other’ and finding out with more precision exactly what the equivalences are that students have been admitted with.”

Speaking with The PIE, he added TEQSA was taking a concerted interested in the circumstances under which English language requirements were being waived.

In February, TEQSA issued a guidance note on direct entry to higher education through an ELICOS provider in response to concerns of English proficiency. Further guidance will be released later in the year.