Some Australian campuses ‘earn more from locals than foreigners’

Around one in four Australian universities earns less per head from international students than their domestic counterparts, seemingly inverting the traditional arrangement where foreigners cross-subsidise the locals.

Average international fees at nine universities in 2022 were less than the combination of fees and teaching grants for Australian students, with the difference ranging from A$31 (£16) at one suburban Melbourne university to A$6,710 at its neighbour.

Meanwhile, foreigners paid up to two-and-a-half times as much as domestic students at large, highly ranked research universities in central Brisbane, Melbourne and Sydney.

The contrast, revealed in a Times Higher Education analysis of university annual reports and Department of Education enrolment data, suggests several trends – escalating transnational activities, subcontracting of teaching and discounting of overseas students’ fees during Covid – have disrupted funding patterns.

Four of the nine universities have overseas branch campuses, and two others claim that most of their international students are located outside Australia. Students based offshore generally pay lower fees than those attending onshore campuses.

Higher education policy expert Matt Brett said offshore delivery was probably a significant contributor to the nine universities’ surprisingly low earnings from international education. But it was hard to tell, because of “moving parts” in the “opaque” data.

“There is a need to increase transparency around university financing across the board, particularly as we go into Universities Accord processes where decisions will be made around subsidies,” said Dr Brett, head of academic governance and standards at Deakin University. “If there’s ambiguity…around the way universities are structuring or financing themselves, these things need to be out in the open.”

THE calculated average earnings by dividing the revenue figures, drawn from universities’ financial accounts, by the full-time equivalent enrolments at each institution. Both sets of data have shortcomings.

Enrolment figures at institutional level do not distinguish between onshore and offshore international students, and there are inconsistencies in how universities acquit student numbers at their partner and subsidiary colleges and overseas branch campuses. Their financial accounts also vary in the treatment of scholarships, fee rebates and third-party teaching deals.

In Australia, it is widely assumed that domestic course delivery is propped up by international students’ towering fees. The richest institutions have tens of thousands of overseas students paying an average A$40,000 a year or more.

But University of Sydney sociologist Salvatore Babones is sceptical about the sector’s financial gains from international education. In a 2021 book, he argued that it was less lucrative for universities to teach foreigners than locals once infrastructure costs and research funding had been factored in.

Dr Babones calculated that, between 2002 and 2019, universities had earned on average 30 per cent more from each domestic student than each international student.

Policymakers have urged universities to diversify their international education practices, both in source markets and modes of delivery. But while universities have intensified their transnational activities, the revenue figures suggest this may come at a cost.

Dr Brett said offshore delivery was “admirable in many respects”, but it also raised questions. “Are decision-makers attuned to what that might mean for the purposes of higher education and how it’s financed?” he asked.

“What transparency measures [and] policy settings do we need to make sure that this is occurring in ways, particularly for public universities, that are aligned with the public interest?”

john.ross@timeshighereducation.com