international education
campusreview.com.au
Photo: Audit Office of NSW
Unis warned on foreign students
Report into NSW universities
finds reliance on revenue from
international students risky.
By Kate Prendergast
“ T
hirty-eight per cent of NSW
universities’ total student revenue
came from overseas students
from three countries.”
This was one key finding to come out of
a new report released by the state’s audit
office that provided summary and analysis
of the NSW university sector’s finances
over 2018, as well as recommendations
for improvement.
The three countries referred to in
the report are China, India and Nepal.
Together they contribute $2 billion in
fees – “equivalent to the NSW universities’
total revenue from domestic students”,
the report says.
Revenue from international students
continues to grow at a much faster
rate than that of domestic students,
contributing to 30 per cent of the total
combined revenue of $10.7 billion over
2018 – up 15 per cent from the previous
year. Growth is attributed to both an
increase in the number of international
students enrolling and an increase in
course fees.
For NSW’s two largest universities – the
University of Sydney and the University
8
of NSW – the overseas enrolment dollar
outstrips domestic student dollar.
The report shows they sourced over
73 per cent of their international student
revenue exclusively from Chinese students
in 2018.
The 2017 report identified this as a
potential risk. It recommended that NSW
universities “assess their student market
concentration risk where they rely heavily
on students from a single country of
origin [as] this increases their sensitivity
to economic or political changes in
that country”.
While the report notes the universities
“have developed strategies to explore the
student market in other regions as well
as expand other sources of revenue”, the
effectiveness of these strategies is not
yet clear.
Overseas student revenue is now almost
neck and neck with government grants
(33 per cent), which have been steadily
decreasing as a proportion of total revenue
over five years.
This trend is expected to continue, with
the 2019–20 federal budget indicating a
decrease in higher education funding by
0.5 per cent.
Only the regional universities – the
University of Newcastle and the University
of New England – now get most of their
revenue from government grants.
Research grants could be harder to
wrangle going forward, with the Australian
Research Council’s introduction of a new
test late last year, under the Coalition
government, requiring research proposals
to outline how their project will “advance
the interests of Australia”.
While revenue was up from the previous
year, with a combined operating surplus
of $378 million, expenses also increased
to $9.5 billion, despite ongoing efforts to
optimise cost efficiencies.
Rising costs are related to an 8 per cent
rise in employer-related expenses, as
well as a rise in expenses for scholarships
and grants.
This signifies a 17 per cent decrease in
universities’ combined operating margin
per student.
Another key finding of the audit report
was philanthropic contributions, with the
two largest universities receiving 69 per
cent of the total.
The University of Sydney received
$80.9 million last year – more than double
that of the second-place beneficiary,
UNSW, which received $33.3 million.
Charles Sturt was overlooked by wealthy
patrons, receiving just $1.2 million.
The final section of the report deals
with teaching, research and diversity
outcomes, with a few positive takeaways,
including better employment outcomes
for postgraduates and increased overall
enrolments of Indigenous students.
All 10 NSW universities received
unqualified audit opinions. ■