Universities race to recapture international students to shore up revenue

When borders slammed shut, universities worldwide were forced to confront a glaring weakness in their business models: a reliance on international students to shore up revenue. Three years on, the sector shows no signs of curbing that dependence. Instead, it’s doubled down.
 

China’s reopening and demand that anyone pursuing degrees at foreign universities get back to class comes amid a heightened race among English-speaking countries to attract international students. 

In Australia, where education is the fourth-biggest export, more than 28,000 Chinese returned to universities last month, with another 35,000 visa holders from the country still eligible. That’s on top of 746,000 total international enrollments last year, with top institutions expecting numbers to return to pre-Covid levels as early as 2025. The UK, US and Canada have also seen a fast snapback.

“We’ve seen a v-shaped recovery across the board,” said Jon Chew, global head of insights and analytics at Navitas, an Australia-based education services provider. With government funding of higher education declining across advanced economies, “universities need to make up for that shortfall” and competition to attract overseas students is intensifying, he said.

The pandemic upended the multibillion dollar international student market globally. 

New enrollments plunged 46% in the US in 2020/21 as many overseas students deferred or paused their academic plans, according to Julie Baer, a research specialist at the New York-based Institute of International Education. In Australia, unions say staff took pay cuts of as much as 15% in 2020, while government figures show the higher education workforce slumped by 8.3% from 2020 to 2021.

Keen to avoid such pitfalls, universities are trying to future-proof their business models.

Australia is seeking to reduce its reliance on China, announcing a new education partnership with India this month that will make it easier for degrees earned in each other’s countries to be recognized. Deakin University will establish a branch campus in India — a common strategy that’s mitigated the impact of pandemic-induced border closures.

American and British universities are the most active in opening overseas campuses, accounting for about a third of such arrangements across the world, according to the Cross-Border Education Research Team. 

New York University, for example, also has degree-granting campuses in Abu Dhabi and Shanghai. Josh Taylor, its associate vice chancellor of global programs and mobility services, said international enrollments “remained very strong” throughout the pandemic under a program that allowed students to study at NYU campuses or centers in their home countries.

The snapback has been faster than many anticipated, with several leading US universities already seeing new international student enrollments back at pre-Covid levels. Meanwhile, the UK has hit its 2030 target of hosting 600,000 international students a decade early, according to Griff Ryan, a policy adviser for global mobility at Universities UK International.

In Australia, which saw an estimated influx of 143,000 international students last month, there’s palpable relief that the strictures of online learning are over.

“You can learn from each other better with face-to-face learning,” said Joy Xu, a postgraduate law student from Beijing at the University of Technology Sydney. “We all know that face-to-face learning gives us the best results and outcomes.”

The economic benefits are also clear.

At peak 2019 levels, when some 5.5 million students globally traveled overseas for study, education exports totaled $26.9 billion for Australia, $30.8 billion for the UK and $44 billion for the US in the 2018/19 academic year. Navitas predicts there’ll be as many as 9.5 million students traveling overseas for study by 2030.

However, economists in Australia are worried that the recent influx has downside risks.

“Inflation is a hot topic at the moment,” said Madeline Dunk, an economist at ANZ Bank. “All these students are going to be spending money while they’re here in Australia on cafes and restaurants and cinemas, and that will add to general services inflation.”

It also exacerbates a rental crisis in cities such as Sydney, where prices are skyrocketing.

“Some of my friends are actually paying around A$600 ($400) a week for a studio, which is insane,” said Inuli Subasinghe, a Sri Lankan student completing her science degree at the University of New South Wales. “And these are just for normal, really basic apartments.”

Meanwhile, surging enrollments are adding pressure to a tight higher education workforce, which has yet to recover from pandemic-induced job cuts. 

At the University of Sydney, workers locked in pay negotiations have staged several days of strikes since the start of 2022. The most recent was on March 9 when hundreds of staff formed picket lines at key entrances to the university.

“Universities need to invest in resourcing staff so they can do their jobs properly,” said Damien Cahill, general secretary of the National Tertiary Education Union. “Often the people who are charged with teaching large cohorts of international students aren’t supported well to do that.”

Striking a balance between generating revenue while safeguarding academic standards and the overall student experience will be critical as the industry continues to recover from the pandemic, according to Chew at Navitas.

“The big risk is it just feels like education becomes a bit of a commodity, rather than being this really once in a lifetime investment,” he said.