Tag Archives: international higher education

Australia’s international student dilemma

Things are looking good for Australia’s higher education export sector. In the past two years, every year, close to 300,000 international students have enrolled into Australian universities and vocational education and training programmes. This puts Australia as one of the top four countries in international higher education – behind USA and the UK, but ahead of Canada.

The reason that attracts international students to these countries is primarily the superior quality of education offered by their universities. But, apart from the fact that these are all English-speaking countries (a factor that cannot be overlooked), another major reason is the attraction of being able to stay back in the destination country after graduation to find employment, permanent residence and citizenship.

This second reason of employment, permanent residence and citizenship may offer fantastic opportunities to international students – most of whom come from higher-middle-income Asian and African families – but this regular influx of large numbers of international students can cause a dilemma for the governments of these destination countries. Australia, which receives hundreds of thousands of international students year after year, has been expressing aspects of this dilemma in the media recently.

In a post earlier this month, we had talked about one such concern over housing and quoted from an article in The Age by Michael Pascoe. In that article, Mr Pascoe writes in separate instances,

“The reworked visa system is supposed to be tighter but still attractive to foreign students in what is a highly competitive international market for their custom.”

“The private education sector as well as public universities are actively hunting the fees.”

“Such strong growth also means further urgent need for investment in student housing. The RBA [Reserve Bank of Australia] submission observes that, as well as overall population growth, its composition influences housing demand.”

“So a rise in foreign student numbers should mean a rise in demand for rental accommodation in what already are housing hotspots.”

In another more recent online article, titled Is Australia hooked on international students? in Macrobusiness.com.au, Dr Jenny Stewart, Honorary Professor of Public Policy in the University of New South Wales at the Australian Defence Force Academy, provides a detailed analysis of what this continuing growth in international students to Australia may mean to her country.

Here are selected excerpts from her article:

“The numbers are substantial. In 2013-2014, of just over 290,000 student visas that were granted, 153,000 were for study in higher education institutions. (Most of the rest were for vocational courses, which in turn offer a pathway towards onshore application for a higher education visa).”

“What do these undergraduate students do once they have completed their qualification? Many, understandably, wish to remain in Australia. Every year since 2006-2007 (the earliest year for which data at the relevant level of detail is readily available), the numbers of long-term arrivals in the higher education visa category have exceeded the numbers leaving by roughly 80,000 people per year.”

“Over the years, international students have brought a good deal of money to Australia and, each year, they continue to do so. Indeed the universities have become dependent upon them financially. The student-migrants are hard-working, and most get jobs.”

“But there are negative implications, too. Firstly, the need to attract, year in and year out, students in these kinds of numbers, has an impact on the prestige-value of Australian qualifications in the international market-place. This is because prestige is affected by the standards (including the English-language standards) that students must meet in order to graduate.”

“From a university perspective, it is enrolments that matter, so there is continuous pressure not to be too demanding when it comes to language skills, and if at all possible, to pass students as they undertake their degree-courses. (Similar factors operate in relation to domestic students).”

“If potential residency is part of the package, prestige may not matter so much to many students. But over time, we would expect it would become harder and harder to attract the best students from specific countries, as their own educational institutions mature, and ambitious families have more options to pursue.”

Dr Stewart gives us several critical pointers to how the higher education export sector may shape up for Australia in the years to come. We agree that the Australian government needs to address these concerns soon and adopt a long-term strategy towards Australia’s higher education exports, visa and immigration policies, housing, and the labour market.

You can read Dr Jenny Stewart’s entire article here.

[Citation: Foreign students set to power housing, Michael Pascoe, The Age, 4 August 2015; Is Australia hooked on international students?, Dr Jenny Stewart, Macrobusiness.com.au, 19 August 2015.]

International higher education is driving Australia’s growth

Globally, the higher education industry is in a flux. More so in developed nations like USA and the UK where rising costs of higher education is attracting fewer and fewer students to universities within their own borders.

Hence, these US and UK universities have had no choice but to woo more and more international students, typically, from Asian countries like China and India. Even then, they face strong competition from other English-speaking countries like Australia, Canada and New Zealand which see tremendous opportunities in building their own higher education sectors.

Australia, for instance, has been a higher education destination for Asian students for many years. It witnessed a drastic fall in international student enrollments after 2009 when immigration laws and student visa policies were tightened; but has put new strategies in place recently to ease and expedite student visa applications and offer limited work permits to international students after graduation.

The Australian government sees higher education as a promising and profitable export service, and is encouraging individual as well as state-wise universities to formulate their own higher education strategies. The international student community – particularly from Asian countries – is responding well to Australia’s invitation, and enrollments to Australian universities have shown an increase in the past two years.

These Australian universities, which had earlier relied entirely on local (i.e. Asian) foreign education agents with university representatives visiting Asian countries now and then as a support service, are now investing in student recruitment and marketing offices and officers of their own, locally, in countries like China and India. This had been a practice for a few Australian universities for the past six years or so, but many more Australian universities are making this investment now.

In an online article, titled Foreign students set to power housing, in The Age dated 4 August 2015, Michael Pascoe writes, “…foreign student numbers are rising sharply and predicted to regain and surpass the record 2009 level of some 120,000 in two years and then keep going.” He continues with “The foreign-students boom is a fine thing for the Australian education industry and the overall economy. It should drive substantial investment in education – some of the urgently required and missing-in-action non-mining investment.”

In fact, Mr Pascoe sums up this happy boom in Australian higher education sentiment very aptly in his article’s first paragraph: “Education is one of the stars of Australia’s rising export services sector and one that has an often overlooked multiplier on the tourism side.” Mr Pascoe feels this boom may also affect the housing sector in Australia. He writes, “It also looks like being the source of the next wave of housing price pressure, especially in Sydney and Melbourne hotspots.”

Mr Pascoe sums up this sentiment as well with “Such strong growth also means further urgent need for investment in student housing.”

[Citation: Foreign students set to power housing, Michael Pascoe, The Age, 4 August 2015.]

The market for international higher education is substantial

According to an OECD report from last year (but containing data upto 2012), “Asia is the source for more than half of today’s internationally mobile students (53%), with China, India, and South Korea the main source countries.” Even though the source countries for international higher education student mobilisation may remain the same in 2015, the distribution of higher education students to destination countries in numbers and percentages based on university and college admissions have changed.

In other words, student demand for international higher education is changing. Recent reports from the US and the UK suggest a serious decline in university admissions from international students – a trend visible from 2013. Australia, which had suffered a similar decline a couple of years ago, seems to have recovered by making conscious changes to their university admissions, visa and employment policies. The Australian government seems to have given its full support.

Although the US still remains the biggest attraction for students from China, India and other developing economies, followed by the UK (still an Indian favourite), countries such as Australia, Canada and New Zealand are showing increased eagerness to win over international students for their universities and colleges. Somewhat behind are countries like France, Germany, Sweden, The Netherlands, Switzerland, Singapore, Japan, and a few others. The federal governments of these countries are taking an active interest. Higher education is becoming an export sector for them. Hence, all these countries are stepping up their student recruitment efforts and channels.

They are building stronger relationships with developing economies and formulating their own national higher education strategies for international students. They are encouraging their universities and colleges to (a) develop courses and programmes which are more globally relevant, (b) set up student support services to ease student-university interactions, (c) reach out and market themselves to international students in their own countries and institutions, (d) recruit students through education and counselling agencies, (e) offer attractive scholarships, and (f) create multicultural student and social communities to welcome and engage international students.

And why not? The market for international higher education is quite substantial. In an article in Forbes magazine last month, titled How The U.S. Can Capture The $170B Opportunity In International Higher Education, Allison Williams (an Analyst at University Ventures), quoting Ryan Craig, author of College Disrupted: The Great Unbundling of Higher Education, writes:

Consider the following: Education is Australia’s largest services “export” sector, contributing $13.5 billion to the Australian economy, or roughly 1 percent of GDP… If the United States was able to generate 1 percent of GDP from the export of online programs, that’s $170 billion or about 7 times the current U.S. higher education “export market” (i.e., international students studying stateside). It would represent a 30 percent increase in the overall higher education market.

In theory, in a purely online world, the potential could be much larger than Australia’s 1 percent. American universities could compete with every Asian university for every Asian student—not simply for those willing to travel abroad. In practice, as average tuition per online student would be much lower than what Chinese students are paying today in Australia, 1 percent is a reasonable target and would make higher education America’s largest export, ahead of agriculture and entertainment.

[Citation: OECD releases detailed study of global education trends for 2014, OECD, 17 September 2014; How The U.S. Can Capture The $170B Opportunity In International Higher Education, Allison Williams, Forbes Magazine, July 21, 2015.]