Australia fears crisis will affect overseas students

PUBLISHED : Saturday, 21 March, 2009, 12:00am
UPDATED : Saturday, 21 March, 2009, 12:00am

Australian universities are particularly vulnerable to the global financial crisis because of their heavy reliance on fees from international students, a Melbourne academic has said.

As the government announced a multimillion-dollar plan to promote Australian universities abroad this week, Monash University academic Chris Nyland said international students contributed up to 25 per cent of some institutions' income.

'This money is so important to the universities that they are highly vulnerable. Even a small reduction could be significant and a major reduction would be terrible,' Professor Nyland said.

The government will spend A$3.5 million (HK$18 million) on a campaign to help maintain the country's share of the lucrative international student market amid fears that the economic crisis may result in fewer students heading to Australia.

The latest figures show, however, that international student enrolments have continued to rise.

Figures released this week by Australian Education International showed international student enrolments at universities, vocational institutes and schools had increased 21.4 per cent in the year to January.

Vocational providers experienced the biggest increase, with enrolments rising 46 per cent compared with a 7 per cent increase at universities.

Enrolments by mainland Chinese, the largest group of overseas students, rose to 127,276 last year, a 19.7 per cent rise compared to 2007. Hong Kong enrolments dropped 6.2 per cent to 17,449, however.

The Study in Australia 2010 campaign will target Australia's major source countries for international students, including China, India, South Korea, Indonesia and Malaysia, over the next nine months.

International education is Australia's third-largest export, contributing A$14.2 billion to the economy in the 2007/08 financial year.

University of Melbourne, where international student numbers have increased to about 11,400 this year, welcomed the government funding.

'Like all Australian universities, the University of Melbourne has long been cautious about the reliance on international student fee income to support academic activities and, in this time of economic downturn, we will be watching the situation closely,' director of international, Tony Crooks, said.

In a speech to international educators in Canberra, Education Minister and Deputy Prime Minister Julia Gillard said the next few years would be challenging.

'While the early signs in 2009 are encouraging, we need to be ready to act. The current global financial crisis is unprecedented and the outlook is uncertain,' she said. 'Our 2009 enrolments are holding up but the challenge is maintaining our position in a tough financial climate.'

Ms Gillard said the campaign - including speeches by top Australian educators at major international events - would focus on raising the country's reputation.

Professor Nyland said universities were also concerned that the 'Obama effect' may prompt more students to enrol in US universities.

'A lot of people would not go to the US while Bush and Co were there. A lot of people feel differently about [US President Barack] Obama,' he said. 'What we are concerned about is that the combination of Obama and the crisis could lead the Americans to begin actively competing against us and the British, and if they do we expect that could be quite devastating.'

Professor Nyland said the Australian government's decision to cut back on its skilled-migration programme could also affect student numbers.

Universities Australia, which represents 38 institutions, welcomed the government's plans.

Chief executive Glenn Withers said the funding would help universities address international students' needs and ensure they were strategically positioned in the market.

'China is our number one international student market and is very important to Australian higher education,' Dr Withers said. 'However, we are diversifying into a number of other countries to ensure our market for international higher education is robust.'

Despite the concerns, Hong Kong-based consultant Alan Olsen said data suggested international education may be resilient in a recession. Unesco figures showed there had been no drop in the number of students studying overseas from 1975 to 2004, a period marked by several economic downturns.

'Families in countries such as China and India, lacking facilities to provide quality education to their most capable young people, do not see education as discretionary spending,' Mr Olsen, director of Strategy, Policy and Research in Education, said.

Fund flows

International education contributed A$14.2b to Australia in 2007/08

Fees paid by international students accounts for this much income for some Australian universities: 25%