When COVID-19 travel restrictions were announced for travellers from mainland China on 1 February 2020, then for all foreign nationals (excluding Australian permanent residents) from 20 March, student visa holders and the higher education sector began to feel the impacts. Universities Australia has estimated $16 billion in revenue will be lost between June 2020 and 2023, and widespread job losses have been reported across institutions.
The factors influencing the financial positions and decisions of institutions are complex. While the publicly available financial information is not sufficiently detailed to enable a full assessment of universities’ current situations, this FlagPost provides an overview of some key data to understand the status of the sector prior to COVID-19, and the emerging impact of the pandemic.
Pre-COVID-19: Higher education enrolments 2013–2019
Higher education enrolments and commencements (enrolments in new courses) of overseas students have grown strongly since 2013. As shown in Table 1, growth has predominantly been from India and China, which together accounted for 58% of higher education enrolments in 2019.
Table 1: Higher education enrolments, overseas students, top five source countries, 2013–2019
| |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
| Nepal |
Enrolments |
8,005 |
10,144 |
12,176 |
15,123 |
21,339 |
28,120 |
34,403 |
| % total |
3.5% |
4.1% |
4.5% |
5.0% |
6.1% |
7.1% |
7.8% |
| Indonesia |
Enrolments |
8,717 |
8,469 |
8,470 |
8,733 |
9,272 |
9,883 |
10,614 |
| % total |
3.8% |
3.4% |
3.1% |
2.9% |
2.7% |
2.5% |
2.4% |
| Malaysia |
Enrolments |
14,962 |
14,348 |
14,395 |
14,586 |
14,647 |
13,982 |
13,080 |
| % total |
6.5% |
5.8% |
5.3% |
4.8% |
4.2% |
3.5% |
3.0% |
| India |
Enrolments |
16,653 |
26,237 |
35,135 |
44,311 |
54,012 |
71,668 |
90,333 |
| % total |
7.2% |
10.5% |
12.9% |
14.5% |
15.5% |
18.0% |
20.5% |
| China |
Enrolments |
85,724 |
89,087 |
96,768 |
112,505 |
133,542 |
152,534 |
164,458 |
| % total |
37.2% |
35.7% |
35.6% |
36.8% |
38.3% |
38.3% |
37.3% |
| All other countries |
Enrolments |
96,658 |
101,065 |
104,697 |
110,048 |
116,271 |
121,936 |
128,107 |
| % total |
41.9% |
40.5% |
38.5% |
36.0% |
33.3% |
30.6% |
29.0% |
| Total |
Enrolments |
230,719 |
249,350 |
271,641 |
305,306 |
349,083 |
398,123 |
440,995 |
Source: Department of Education, Skills and Employment (DESE), Basic pivot table 2002 onwards, extracted 23 July 2020.
Overseas student fee revenue
University finance data as reported by DESE shows that in 2018 (latest year available), fees from overseas student enrolments accounted for 26% ($8.8 billion) of university revenue. As shown in Table 2, this reliance has increased since 2013.
Table 2: Total Australian university revenue from fee paying overseas students, 2013–2018
| |
Total revenue from
all operations
($’000) |
Change from
previous year |
Revenue from
fee paying
overseas
students
($’000) |
Change
from
previous
year |
Percentage of
revenue from
fee paying
overseas
students |
| 2013 |
$26,332,964 |
4% |
$4,290,808 |
4% |
16% |
| 2014 |
$27,751,858 |
5% |
$4,741,973 |
11% |
17% |
| 2015 |
$28,609,979 |
3% |
$5,349,879 |
13% |
19% |
| 2016 |
$30,147,079 |
5% |
$6,249,049 |
17% |
21% |
| 2017 |
$32,028,091 |
6% |
$7,457,002 |
19% |
23% |
| 2018 |
$33,741,910 |
5% |
$8,838,891 |
19% |
26% |
Source: DESE, Finance Publication, various years and Parliamentary Library calculations.
However, at institution level, overseas student fees accounted for between 8% (The University of New England) and 38% (Federation University Australia) of revenue among public universities, meaning the impact of declining enrolments could fall more heavily on some institutions than others.
Andrew Norton, higher education policy expert at the ANU, has highlighted various explanations for universities increasingly seeking revenue from international student fees, including to make up for government funding cuts, top up funding for teaching Commonwealth supported students and government-funded research projects, maintain a teaching-research academic workforce, and improve their standing in international research rankings.
However, reliance on overseas student fees does not fully explain universities’ financial risk exposure in light of COVID-19. Analysis from the Centre for the Study of Higher Education at the University of Melbourne suggests that planned expenses, the need for additional spending on on-line learning and student support, and domestic fee income and investment losses, have all contributed to a precarious financial position for some Australian universities, while others appear to be relatively more stable.
Since COVID-19: Are overseas student numbers falling?
Visa data
Visa data provides some indication of the impact of border closures on the sector. Prior to the impact of COVID-19, student visa grants and numbers of students in Australia in recent years were trending upwards (see the Department of Home Affairs Student visa and Temporary Graduate visa program reports). Visa granting was put on hold in line with travel restrictions, so student visa grant numbers for all nationalities, but particularly Chinese students, began falling in February and have dropped significantly since, as shown in Figure 1.
Figure 1: Primary visa grants by month, higher education and postgraduate research sectors, 2018–19 and 2019–20
Source: Department of Home Affairs, Student visas granted pivot table updated 30/07/2020.
While there have been very few student visa grants to applicants outside Australia since March, grants to applicants already in Australia, which account for about a third of higher education and postgraduate sector student visas (33% in 2018–19), have continued. For these sectors, grants in Australia are down slightly on the previous year. In addition, 80% of current higher education student visa holders were in Australia as at the end of March.
Enrolment data
DESE enrolment data currently covers up to May 2020. As shown in Table 3, enrolments have grown by 1% compared to May last year. However, commencements have declined by 14%.
In an ordinary year (2017 to 2019 in Table 3), around 20% of total enrolments, and 45% of commencements, occur after May. To equal 2019 numbers, a further 80,640 enrolments would be needed in the remaining months of 2020.
Table 3: Higher education enrolments and commencements, international students, full year 2017–2019 and year to May 2017–2020
| |
Total enrolments |
Commencements |
| |
2017 |
2018 |
2019 |
2020 |
2017 |
2018 |
2019 |
2020 |
| Total at May |
279,943 |
319,255 |
360,355 |
362,992 |
79,545 |
86,683 |
96,833 |
82,847 |
| Growth on previous year at May |
14.6% |
14.0% |
12.9% |
0.7% |
13.6% |
9.0% |
11.7% |
-14.4% |
| Full year |
349,083 |
398,123 |
440,995 |
|
148,685 |
165,551 |
177,473 |
|
| Proportion of full year at May |
80.2% |
80.2% |
81.7% |
|
53.5% |
52.4% |
54.6% |
|
Source: DESE, Basic pivot table 2002 onwards, extracted 23 July 2020.
Recommencing of grants for student visa applications outside Australia was announced on 20 July, but visa grants do not immediately equate to enrolments, commencements or arrival in Australia, particularly while borders remain closed.
While some students may continue to enrol and study from offshore, the impact of COVID-19 will be drawn out over the longer term.
This post was updated on 14 August 2020 to correct a figure in table 3.