Covid-19 Leaves Colleges Short on International Students—and Money

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Covid-19 Leaves Colleges Short on International Students—and Money

SYDNEY—Australia’s decision to close its borders protected it from the coronavirus. But that policy is wreaking havoc on the country’s universities, which relied on lucrative tuition from foreign students who are stuck overseas.

Experts say it will take years for the schools, among the best in the world, to recover from the economic damage. Already, Australian universities have cut more than 17,000 jobs, according to industry group Universities Australia. It said operating revenue fell 4.9% last year and is expected to fall another 5.5% this year.

“As students finish and we haven’t got new ones coming, we’re yet to hit the bottom basically,” said Peter Hurley, a policy fellow at the Mitchell Institute for Education and Health Policy, which forecast that the country’s universities could lose up to $15 billion in international tuition through 2023.

Leaders all over the world have needed to balance protecting their populations from the virus with the economic damage that those policies can cause. But with a vaccine rollout expected to start in Australia soon, pressure is ramping up on conservative Prime Minister Scott Morrison to provide clarity on how and when international students could return.

Leaders in the nation’s states and territories have pressed for some places in the quarantine system to be reserved for international students, but Mr. Morrison has argued that returning Australians must come first. Thousands of Australians remain stranded overseas because the government has imposed caps on returning travelers, part of an effort to ease pressure on its hotel quarantine system and to minimize the risk of highly contagious variants of the coronavirus from spreading into the community.

The matter could be discussed at a cabinet meeting later this week. Any change in policy could signal whether Mr. Morrison is ready to loosen border restrictions with vaccines on the horizon.

Phil Honeywood, chief executive of the International Education Association of Australia, said overseas students are starting to doubt that they will return to Australia this year. He is concerned some students may drop out and go study in other countries like Canada, the U.K. and the U.S.

“The stickability of those students is now in question,” he said.

Ahmed Korayem, a 32-year-old in Egypt, wasn’t sure whether to start a master’s program in compliance and regulation at an Australian university because of the country’s border closures. He worries that studying online wouldn’t be the same as being there in person and that it would be difficult to interact with his professors because of the time difference.

Mr. Korayem has decided to enroll at school, but he said a prolonged period of border closures could force him to drop out later.

“If it’s three months and then I would be able to move and continue my studies face-to-face, I can handle this. If it’s more than that, then I think no,” Mr. Korayem said. “The uncertainty can be stressful.”

Foreign students, particularly from China and India, have been lured to Australia by its relative proximity to Asia, easy access to visas and high-quality schools. Australian universities charged them higher fees than domestic students; international tuition at one point made up more than 40% of student revenue at universities, according to an estimate from the Mitchell Institute.

Although students can study remotely online, international-student enrollments were already down 14% as of November, according to Australian government data. The number of international students physically in the country has fallen further—and is down about 35% when compared with pre-pandemic levels—according to the Mitchell Institute’s Mr. Hurley.

“I don’t think anybody had on their risk scenarios literally no international travel,” said Paul Duldig, chief operating officer at Australian National University in Canberra, the capital. The school estimates its international-student tuition fees fell last year by about 30%.

Aside from cutting staff, universities are delaying campus improvements and eliminating fields of study. Australia’s reputation for producing important academic research is also at stake, given that universities used much of that international tuition to fund scholarly pursuits. About 11% of Australia’s researchers, including postgraduate students and staff, could lose their jobs due to the decline in fees from international students, according to research from the Melbourne Centre for the Study of Higher Education.

To make up for the revenue decline, the Australian government included about $770 million in aid to fund university research in this financial year’s budget. But a long-term solution depends on allowing international students back into the country, according to academics who have studied university finances.

Melbourne University’s near empty campus in September.

Photo: Carla Gottgens/Bloomberg News

Before the pandemic, Australia was the third top destination for international students, behind the U.S. and the U.K., according to United Nations data. Australian universities were also more reliant on international students than other countries. In 2018, 27% of all students in higher education in Australia were from overseas, according to data from the Organization for Economic Cooperation and Development, a group of wealthy countries that has 37 members. That was the second highest percentage in the OECD, behind tiny Luxembourg. In the U.S., just 5% were international students.

At Monash University, one of Australia’s top research schools, tuition from international students fell $85 million last year and overall revenue dropped by $270 million, a nearly 5% decline. The school is cutting 277 jobs and eliminating 2% of its courses. It is also shelving or deferring long-term building plans, including a new medical educational center, a biomedical teaching facility and an artificial-intelligence and data-science building.

Margaret Gardner, president and vice chancellor of the university, said having international students on campus enriches the academic experience for domestic students who get exposed to different cultures and viewpoints even if they are going to school close to home.

“It’s not just about plugging a hole,” she said. “I can’t begin to tell you how much difference it makes to the education you provide.”

Will the coronavirus pandemic lead to long-term changes in higher education? To better understand the challenges facing U.S. colleges and universities, WSJ’s Alexander Hotz spoke with administrators, students, and a higher education futurist. Photo: Robert F. Bukaty/AP (Originally Published May 19, 2020)

Write to Mike Cherney at mike.cherney@wsj.com

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