Australian universities’ dependence on international student fees has “fuelled a culture of revenue, profit and competition” and created an unstable business model, the head of the National Tertiary Education Union (NTEU) has warned.
Critics representing various interests in the sector joined in expressing anxiety at the position universities had found themselves in as the federal government aggressively tries to wind back the number of international students.
The chief executive of Universities Australia, Luke Sheehy, said tertiary institutions had “come to rely on international student revenue to fund everything we do in the face of declining government support in recent years – from teaching and research to infrastructure projects and employing people in well-paid jobs”.
In percentage terms, Australia has more international students than any OECD country bar Luxembourg – and well in excess of the UK, Canada and the United States.
The Group of Eight (Go8) institutions are particularly reliant on international student fees, with foreign enrolments making up 47% of the total cohort at the University of Sydney and more than 35% at the University of Melbourne, the Australian National University, the University of Queensland and the University of Adelaide.
Universities earn nearly twice as much from overseas students as from domestic students. Average revenue per domestic full-time equivalent student was $22,996 in 2023, compared with $41,117 for an overseas equivalent student.
The president of the NTEU, Alison Barnes, said a growing dependence on foreign income had fuelled “corporatisation” of the sector.
“[International students] add a lot to our campuses, they’re an asset – but they’re seen as cash cows,” she said.
“There’s a systemic risk associated with relying on international student fees that was demonstrated during Covid – it’s not stable. But it’s inherently problematic beyond the associated risks.
“The aggressive pursuit of international student income has fuelled a culture of revenue, profit and competition for students.”
When the federal government released its strategy to fix Australia’s “broken” migration system late last year, international students were squarely on the agenda.
The education minister, Jason Clare, said the government was sending a “clear message” it would act to “protect Australia’s reputation as a high-quality international education provider”, announcing tougher minimum English-language requirements and targeted visa scrutiny of “high-risk” providers.
Since then, a series of levers have been pulled aiming to reduce the flow of international students into Australia, which reached record highs in February.
First, the commonwealth proposed a cap on international students, giving the education minister unprecedented powers to limit enrolments by institution and course.
Then it more than doubled the international student visa application fee from $710 to $1,600, a move described by the International Education Association of Australia as “death by a thousand cuts”.
Sheehy described the government’s approach to international students as “policy chaos” that could cost thousands of jobs. The sector needed “certainty, stability and growth”, he told Guardian Australia.
“International education is a great Australian success story and any changes to the policies that underpin this $48bn sector must be weighed carefully against its significant and far-reaching impact,” he said.
‘A victim of its own success’
Abul Rizvi, a former deputy secretary at the immigration department, has been lobbying the federal government to implement a minimum university entrance exam score in place of its proposed reforms. He said the score, similar to an Atar, would limit the incentive for institutions to put tuition fee revenue above academic excellence.
Rizvi has been a longstanding critic of successive governments’ approach to international education. He told the National Press Club in June that the “underfunded” sector had “long been chasing tuition revenue from overseas students and sacrificing learning integrity in the process”.
But he maintains that an increase in visa fees will simply mean more government revenue – not better quality students.
“We’re actually shooting ourselves in the foot,” he wrote earlier this year. “The people it will deter will tend to be good students with options.”
Gwilym Croucher, a higher education expert at the University of Melbourne, said Australia had been a “victim of its own success” in many ways.
“International student revenue has provided a lot of resources but caused inequality between institutions,” Croucher said, pointing to the University of Sydney, which derives more than 40% of its total revenue from foreign enrolments – more than the funding it receives from the government.
“That is an extraordinary amount, it’s brought them a huge bounty, but for the government, there’s often no need to make decisions about the allocation of resources … because there’s been a lot of money flowing into the system that can smooth over the gaps.”
Of the $34.7bn in revenue universities received in 2022, $8.5bn came from international students. In 2012, the figure was around $4bn.
And while international student revenue has more than doubled, federal government investment has lagged for three decades. Current investment in research and development sits well below the OECD average.
Croucher said the drift dated back to the global financial crisis, leading to a gradual unwinding of investment in bodies such as the Australian Research Council (ARC).
“It’s a hard conversation we have to have,” Croucher said. “Research is a long-term investment, but difficult for politicians to sell.”
The deputy chief executive of the Group of Eight, Matthew Brown, said international student revenue was necessary to make up for government underfunding of research and teaching in “key disciplines” such as engineering, health and science.
“All Go8 members are in the top 100 universities globally and this reflects the support of international student revenue to make up for the underfunding of government,” he said.
“Where this reliance on international student revenue is greatest is in university research – the backbone of the national research effort – where Go8 members carry out 70% of Australia’s university research.
“The government is making a critical mistake by using international students as a scapegoat to manage a short-term spike in migration and ease housing pressure.”
Students’ debt trap
Barnes said there had been a “massive growth” in marketing and recruitment spending in recent years, but little had been done to ensure international students received adequate levels of support. There is barely any regulatory policy requiring universities to ensure the welfare of their international students.
“I’ve taught many international students, they’re a great joy to teach but … these are kids in a country without family support [or] friends, English isn’t their first language and they’re paying a lot of money for their degrees to not be adequately supported in what they need to achieve,” Barnes said.
“I’ve seen students who may have plagiarised, not because of malice but [out of] desperation and lack of support.”
Between 2016 and 2019, the Monash Graduate Association assisted with 500 academic integrity cases. Between 2020 and 2024, the number tripled to 1,500.
Its president, Sahampath Hettiarachchi, said there was a direct correlation between a student’s financial circumstances and the likelihood that they would engage in academic cheating. He said he had helped international students who told him they were driven to cheat as they could not afford to repeat units because their family had already over-borrowed for them to study in Australia, or because they could not afford to pay rent.
“It’s a last-ditch effort – they don’t have other options,” he said. “These students are working largely in isolation, new to the country, with little to no social support.
“There’s a troubling myth international students are wealthy but in reality they’re under heavy rental stress, they’ve had to take out a loan or sell a house just to pursue their studies, not to mention staggering visa costs and airfares.”