The Sustainable Growth in International Higher Education report, which analysed the performances and enrolments make-up of Australia’s 39 universities, found only 10 had recovered to or surpassed international undergraduate and postgraduate enrolment levels from before the 2010 market collapse.
“The four most prestigious universities are attracting a disproportionate number”
The report noted limited diversity across HEIs, highlighting an emerging ‘Group of 4’ taking in the most students – Melbourne, Sydney and Monash Universities, along with the University of New South Wales.
“In effect, Australia appears to have evolved into a new market paradigm with the four most prestigious universities in the two largest cities [Sydney and Melbourne] attracting a disproportionate number of international students,” the report observes.
Jon Chew, principal at Nous and one of the report’s authors, said the findings raised questions of some provider’s sustainability and highlighted an over-reliance on Asia.
“The concern is the current boom; how much of that is sustainable?” he said.
“The trend… since 2010 is that if you want significant growth, then that comes from [a concerted] effort in [China or South Asia]. But there aren’t very many universities that have done well in both and grown very rapidly.”
Speaking with The PIE News, Chew stressed that reliance on Asia wasn’t itself bad, observing that due to its size, the region is already major trading partners of other Australian exports, but added there were other implications.
During the 2010 downturn, the report notes universities reliant on South Asian (namely Indian, Nepalese and Pakistani) students were heavily impacted as almost two-thirds of the market dried up, while those who had more Chinese students were less impacted than others.
While acknowledging the important of universities diversifying their markets, Group of 8 chief executive Vicki Thomson challenged the notion that Australia was too reliant on certain markets.
“We are a demand-driven system in an international context, meaning we are meeting the demand [that] at this point in time is coming from China,” she said.
“I don’t think it’s a problem that Australia and the Go8 have a large proportion from students coming from overseas and in fact quite the reverse.”
Thomson also challenged the report’s observation that a recent freeze on university funding was driving providers to seek out international students to cover research costs.
“The problem is… actually not an international student [problem]” she told The PIE.
“It’s that we have an over-reliance on a particular source of income, and in our case, we use that teaching income to support our research because we have a distorted funding model.”
“The concern is the current boom; how much of that is sustainable?”
IEAA chief executive Phil Honeywood said the report was a substantial contribution for future policy setting, but added it raised as many questions as it answered.
He said there was a need for analysis of other education levels, as well as Australia’s use of agents, and how political talking points around regional migration may disrupt the market.
Speaking on two observations from the report, an increased proportion of postgraduate enrolments and a “paradox of competition” – in which providers reduce their margins by increasing marketing costs – Honeywood warned for care to ensure providers “don’t finish up with a race to the bottom”.
“A trend has started that could have unfortunate consequences,” he said.
“Whilst the report doesn’t refer to scholarships, clearly as Australia moves towards being more of a postgraduate destination… it does raise a prospect of more discounts disguised as scholarships being the lever to beef up your postgraduate profile.”
A London Economics report from early August revealed a $9.76 return on investment for every dollar spent on research in Go8 universities.
Issue 19 of The PIE Review explores Australia’s opportunities and risks in international education.