Recent announcements by the Australian government to curb international student numbers have sparked significant concern among education stakeholders.
These measures, aimed at reducing immigration pressures and ensuring quality education, might inadvertently push the nation’s higher education sector towards a financial precipice reminiscent of the alarming situation currently unfolding in England.
Prof. Amit Chakma, Vice-Chancellor and President at The University of Western Australia, in a LinkedIn post warned: “Australia, be aware!”
“The perils of ill-conceived policy unfold in the United Kingdom in real-time. Let’s not follow this self-destructive path that will weaken our universities and the economy! We can’t say we did not see it coming!”
A recent report by the Times Higher Education (THE) says international student recruitment woes could leave eight in 10 English universities in deficit
According to the Office for Students (OfS), more than 80 per cent of English higher education institutions could face a deficit within three years due to collapsing international student recruitment and stalling domestic demand.
Phil Baty, Chief Global Affairs Officer at Times Higher Education (THE), said in a LinkedIn post that this dire prediction suggests that some universities may be forced to close, euphemistically described as “exiting the market” by the OfS.
The projected worst-case scenario models a net reduction in annual income of £9.7 billion, leading to deficits in 226 providers (84 per cent) and low liquidity levels for three-quarters of institutions by 2026-27.
Baty says over 50 English universities have initiated redundancy rounds to cut costs, with the OfS warning that even more drastic measures might be necessary.
“The ‘consolidation’ and ‘rationalisation’ of courses – along with providers potentially exiting the market, could ‘reduce the range and diversity of providers and limit student choice’ the report says, with institutions’ research and contribution to local and national economies also at risk.”
Undoubtedly, such actions could profoundly alter the size, shape, and reputation of the English higher education sector, both nationally and internationally.
For the Australian stakeholders, the parallels to English universities are striking: international students represent a substantial portion of university revenues in both countries.
By imposing restrictions on their numbers, the Australian government risks precipitating a similar financial crisis. The loss of international students would not only diminish direct financial inflows but also reduce the cultural diversity and global perspectives that enrich the academic environment.
Moreover, the economic repercussions extend beyond universities. As international education has been valued at $48 billion in 2023, accounting for more than half of Australia’s economic growth and employing more than 200,000 people. International students contribute significantly to the local economy through housing, retail, and other services. Their absence would result in a notable decline in economic activity, affecting communities that rely heavily on the vibrancy and spending of this demographic.
Vicki Thomson, Chief Executive of Group of Eight, says that it is wrong to suggest that international students are somehow responsible for the economic challenges that our community faces. It “shows an unfortunate lack of understanding for just how important this export sector is to our economy.”
“We wouldn’t do this to the iron ore sector, nor to the wine industry or other critical exports. It seems very short-sighted and misguided to target our most successful services export sector.”
To mitigate the risks to higher education, experts suggest that the Australian government should consider a more balanced approach. Instead of populist policies and blanket restrictions, targeted measures to enhance the quality of education and ensure that international students meet high academic standards could achieve the desired outcomes without jeopardising the financial stability of higher education institutions.
In my opinion, the experience of English universities serves as a stark warning for Australia. The Australian government’s current trajectory threatens to replicate these same challenges, undermining the financial health and global standing of its higher education sector. This is a line in the sand moment: Albanese and Dutton must demonstrate foresight and flexibility to protect the future of Australian higher education, ensuring it remains a robust, inclusive, fair, and globally competitive brand.
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