There are three big sources of revenue for Australian universities – Australian students, international students and research. The balance between all of these revenue sources is interdependent:
- Funding from students typically subsidises research work
- Universities charge international students up to three times as much as Australian students (which can be used to subsidise research and local students)
- Numbers of Australian students are limited by government targets and funding limits (although that changes next year)
When you’re dealing with universities, it’s good to know what’s going on with each of these funding streams. About 22% of revenue comes from research grants, and a further 18% comes from international students (although in some universities, this can be up to 30%) – that’s over $4 billion.
Deloitte have just finished a report, paid for by Universities Australia (the body representing 39 Australian universities) which looks at the effects of changes in international student numbers. Of course, it may not be entirely unbiased – with education being a major export (third largest) for Australia, there’s an agenda here about ensuring the government support increasing international students. But it does contain some interesting reference points:
- In 2010 there was a slowing in the growth in international students, following tighter visa rules, the stronger Australian dollar, attacks on international students and more international competition for students.
- The forecast for 2011 is a fall in new international students of 23%, resulting in a drop of 3.2% in overall international students
- Further ahead, 2012 is forecast to be another weak year, and then growth returns after 2012
- The impact of all of this is a reduction in revenue for universities of half a billion dollars a year
Read the full Deloitte Report ‘Broader implications from a downturn in international students’
Read ‘Lost international student enrolments may cost Australia billions’ on The Conversation