Universities wrong-footed by fires, a deadly virus and Brexit

Universities wrong-footed by fires, a deadly virus and Brexit

Less than a week later, after a University of New South Wales student was admitted to hospital with the coronavirus, the scope of the taskforce was broadened to include the implications of the outbreak in China.

Honeywood – whose main job is chief executive of the International Education Association of Australia and who was a Liberal MP in Victoria in the late 1980s and early 1990s – takes a pragmatic view of the effect of fires and disease on university reputations.

‘Things will settle,” says International Education Association of Australia CEO, Phil Honeywood.
 Attila Csaszar

“Give it a few weeks and things will settle.”

Australia has a clean and green reputation, which it has to protect. In China, it’s usually the parents who decide where their kids will study and they want safety and security.

“This is the most important time of year for semester one intake and it coincides with the Lunar New Year holiday,” says Honeywood. “It’s difficult to get a handle on what’s happening.

“What is yet to be ascertained is the extent to which parents in crisis-affected areas want to get their children out of the country. Normally parents will go to great lengths to find a way for that to happen.”

He says arrivals for the first semester are slowing and the second semester intake, later in the year, is the one to watch.

The outlook is complicated by the impact of Brexit.

At 11pm on Friday (10am Saturday AEST), the UK is severing its ties with Europe and opening its doors to everyone else in the world, especially students.

The UK has amended legislation which will allow foreign students to apply for a two-year work-right visa after studying a one-year Masters degree. That’s second only to Canada in generosity towards would-be students and migrants.

And it’s well above what Australia offers, which is a two-year visa contingent on having done two years of study.

In Australia, about 20 per cent of all university students come from overseas and they inject $38 billion dollars into the economy. But the international student market is vulnerable to external shocks. In 2010, Indian enrolments collapsed by nearly 50 per cent after a series of racially led attacks in Melbourne.

Post-study work-right visas are a drawcard for international students. Globally there are close to six million students studying away from home at any given time.

In the case of the UK, for the cost of one year’s post-graduate study, students from developing economies get an entitlement to work. Given there are jobs on offer, that is enough to pay off the degree, remit some money to families and apply for migration status.

The director of Universities UK International, Vivienne Stern, says the message has got through to the government: UK universities have been losing ground to other countries with big public university systems.

“Education is a significant export for the UK. Last year it was worth £20 billion ($39 billion) to universities and the knock-on effect to the economy is another £26 billion. And that message has got through to the Home Office,” she says.

Stern says the UK is targeting China and India – also the two top-source countries for Australia. New data already shows a sharp rise in Indian enrolments in English language courses in the UK, a trend which usually prefigures enrolments in undergraduate and graduate degrees.

The UK Secretary for Education, Damian Hinds, says education exports are central to the government’s post-Brexit economic strategy, and he wants education exports to hit £35 billion by 2030.

In Australia, there are more than 800,000 international students – which is more than in the UK – and at least a third of these come from China.

A 2018 report on the economic impact of universities in Australia, commissioned by the Group of Eight (Go8), which represents Australia’s leading research universities, estimates that for every three international students studying at a Go8 institution, there was $1 million in flow-on effects to the economy.

Meanwhile, Honeywood says Canada is also chasing international students aggressively and offers the most generous post-study work-right visas of any country. Foreign students can apply to migrate to Canada even before they graduate and even if they are only at the equivalent of TAFE.

We’ve never had the confluence of events that we have now.

— Group of Eight chief executive Vicki Thomson

In New Zealand, students can get a post-study work-right visa for up to three years once they’ve finished their degree. Students’ partners can apply for work visas and their children can study as domestic students, free of charge.

Tehan points out that in October he introduced Destination Australia, which offers 1200 scholarships to students who study in regional Australia. But Honeywood says regional places are not appealing to overseas students and it’s the work-right visas that they want.

The Go8 has a lot at stake. Culturally, big-name universities appeal to the parents of Chinese students. The Go8, often dubbed the sandstone universities, enrol 63 per cent of all Chinese students in the country. Experts estimate Go8 members alone have at least 3000 students originating from Wuhan and will lose $90 million in fee revenue from delayed starts and cancellations in 2020.

Chief executive Vicki Thomson said the 2009 Indian student crisis showed how the sector could recover if organisations worked together. It took five years for Indian enrolments to turnaround after the 2010 attacks and less than a decade later student numbers had returned to where they were before the crisis, at just under 90,000 annually.

“We did that with India, but we’ve never had the confluence of events that we have now,” she says.  “Headwinds is the way I describe it.”

The Go8 wrote to Tehan calling on him to stand up for the sector and to “allay some of the fear being created by the alarmist (unauthorised and unconfirmed) reports that are circulating”. This was after Tehan had created the reputation rescue taskforce.

Thomson says Australian universities are still in a good position to attract global students because they are highly ranked; seven Go8 members are in the global top 100. Many industries realise the value of international students and are collaborating on research and the universities themselves have big agent networks in source countries.

Anticipating an outpouring of anti-migration feeling if Australia went the way of the UK and made post-study work rights more generous, Thomson points out 87 per cent of international students return home.

“The other 13 per cent? We would want them to stay,” she says. “We don’t want a brain drain in Australia, we want a brain gain.”

Honeywood is also concerned about the fallout from the trade war. A phase one trade agreement between the United States and China was signed on January 15, creating mechanisms to slow down or reverse tit-for-tat tariffs.

Education experts in the US say there is nothing in phase one which signals intervention in higher education. But Honeywood argues the US wants to sell more exports into China and for Beijing an easy way to do that without disrupting its own growth plans could be to encourage students to enrol at US universities.

Data out of the largely private US higher education sector shows an increasing number of colleges have had their debt downgraded, a sign of smaller margins and uncomfortable balance sheets. These fortunes could be turned around with a friendlier approach to visas from Washington and good marketing by universities.

Emeritus professor of economics and the head of the East Asian Bureau of Economic Research at the ANU, Peter Drysdale, doubts the US-China trade agreement, when complete, will make a difference.

He says the choices made in China about buying education services abroad are made by middle-class households.

“The challenge in that market is for Australian institutions to provide a quality product that is competitively priced, and that challenge rests with Australian suppliers.”

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