EDUCATION

As funding for local students shrinks, universities have become hooked on the lucrative revenue from international students. But global competition is hotting up and Australia’s reputation is under stress.

A CASH cow is all very well, and a fine thing when it is happily chomping in the field. But what happens when it grows horns, turns nasty and demands that you feed it more and look after it better?

It is a problem Australian universities have been trying to tackle since a sharp fall in Commonwealth funding per domestic student left them heavily dependent on international students – their very own cash cows – to bring in the money to keep the higher education sector afloat.

Universities used to be places of learning, but increasingly they are also places of earning. And it’s telling that what was once the higher education sector is now an “export industry” – and an exceptionally lucrative one too.

The unabashedly mercantilist approach to the internationalisation of higher education – or the intense recruitment of fee-paying students from other countries particularly in the past decade – has been a phenomenal success. Australia now has the highest proportion (19%) of international students of any OECD country. It is the world’s fifth-largest provider of higher education to international students, behind the USA, UK, Germany and France.

These students have been crucial in building international education into a $12.5 billion industry, making it Australia’s third-largest export after coal and iron. It’s enough to make economists weep for joy.

But if higher education expert Simon Marginson’s cash cows growing horns and turning nasty is a colourful analogy, it is also apt. International demand for study in Australia is still growing, but it has slowed, and there is pressure on the industry from without and within. Increasing competition from foreign universities in the global race for market share, Australian universities at capacity, and a growing perception that Australia’s international students have been exploited on one hand, and neglected on the other, are biting hard.

Now there is increasing concern over “fragility” in the sector, with universities reliant on international student fees for an average of 15% of their funding. Education Minister Julia Gillard has referred to this dependence as a “dangerous over-reliance”. (Foreign students at the University of Central Queensland provide half of total revenue.)

And the shift from scholarship to dollarship, as some experts describe it, has come at a price. Private income might substitute for public income in dollar terms but it does not fund the same level of academic capacity (that’s teaching and research), says Professor Marginson, of Melbourne University’s Centre for the Study of Higher Education. It has been estimated that universities, on average, spend about 10% of revenue on marketing and recruitment of international students.

Moreover, domestic student participation is flat and academic staffing ratios have deteriorated sharply – all creating “downward pressure” on research and the quality of teaching, Marginson says. Market share, managing costs and customer satisfaction, rather than academic excellence, learning or education innovation have become the key objectives for many universities, he says.

“What drives the export industry without a shadow of doubt is the underfunding of the domestic system, (which) undermines quality and reputation.”

The consequences may be far reaching. Education and research are crucial in a knowledge intensive world. Already, says Marginson, the world is dividing into strong countries, that lead the way in innovative research, and weaker countries that rely on knowledge and research from overseas. There are no Australian universities listed in the top 50 of the Shanghai Jiao Tong University annual index – the best available world measure of a university’s research output. Only ANU and Melbourne University make it in the top 100.

“We can’t take off with research,” warns Marginson. “We just can’t get enough thermals under our wings to fly because we just can’t put extra money into it.”

There are also doubts that the internationalisation of higher education has achieved its aim of enriching universities by helping staff, students and institutions create strong personal, cultural and intellectual links with other countries.

Australian Education International (AEI), the international arm of the Department of Education, Employment and Workplace Relations, has had the job of promoting growth in the international education market. It is understandably proud of its achievement. But its job extends further than just raking in the dollars from Australia’s 370,000 foreign students.

Its website states: “What we do helps people and institutions around the world create long-term personal, cultural and intellectual relationships whose benefits reach well beyond bottom lines.”

So, after years of sustained growth in the industry, is Australia reaping the non-financial benefits? Marginson is not entirely convinced. While frenetic growth in international students numbers has added to the Australian cultural map and helped Australia integrate into the Asia-Pacific, he believes many domestic universities are yet to generate richer and deeper links with foreign universities and staff.

The global positioning of Australian higher education is about becoming part of the network of “knowledge cities” where universities everywhere are connected, he says. Research extends beyond borders and educational trade is fluid.

“A global knowledge city is a mecca for visitors, ideas, creative talent and capital and is open to newcomers on the basis of merit. The global dimension is a network of global knowledge cities. This is the A game. We must be part of it,” he warned in a lecture last year.

Dependence on international student fees is a problem acknowledged by vice-chancellors around the country. Professor Richard Larkins, chairman of Universities Australia, says future demand from foreign students is not predictable and there is “over-reliance and fragility in the system”.

And he goes further: universities have reached capacity and can’t continue taking large numbers of international students. Demand from foreign students is growing, but has slowed; the strong dollar is making Australia a more expensive place to live and study; and competition is fierce, not only from popular study destinations such as the US and Britain, but also Asian countries.

It’s a recognition that in the end, those countries with international-standard knowledge hubs will be the leaders in a world increasingly dependent on, and hungry for, technological advancement, in areas such as science, engineering, climate change or digital innovation.

So far, Australia has been successful in marketing itself as one of the best places to study, but the factors outlined by Larkins mean it can’t afford to ignore the key tension points that threaten the higher education export bonanza.

Another tension point has been worrying education institutions and has the potential to derail the sustainability of the international education export industry: any threat to the safety and wellbeing of international students, says Professor Chris Nyland, an expert in international business at Monash University.

He says there is a widespread belief that education exporters see international students as cash-cows rather than human beings. And a “head-in the-sand” attitude by state and federal governments shows no respect for basic principles of social responsibility and gives Australian education institutions a bad name. Welfare deficiency is a critical issue and policies need to be developed to manage hardships faced by international students, he says.

Many of Australia’s foreign students have happy experiences, but a sizeable and vocal minority are furious about what they say is an appalling and callous lack of welfare support for students navigating their way through a crippling lack of affordable housing, workplace exploitation, cultural roadblocks and threats to personal safety.

For the past two months Malaysian international student E-thing Gee, 18, has been living on the generosity of a friend who lives in Vermont South. Numerous applications to rent a place of her own have been rejected with no explanation.

Every day she travels one hour by tram and bus, without concessions, to get from Vermont South to Monash University’s Clayton campus, where she is studying psychology.

Before she moved into her friend’s house she was living in a shared house with 11 students in Caulfield. Her share of the monthly rent was $823. She moved out because it was busting her budget.

Gee has been in Australia less than six months and anxiety over her lack of permanent accommodation is gnawing at her. “I haven’t told my parents because I don’t want to worry them. They can’t do anything about it. But I have no idea why I can’t find a place.”

Lack of housing for students is also creating tension within suburban communities. This month a local newspaper reported that Malvern East residents were objecting to a developer’s proposal to build student apartments in the area on the grounds that noisy and unclean student housing ruined neighbourhoods.

Accommodation for students also came to the fore in January when three Indian students died in a Footscray house fire after a faulty computer monitor exploded. Firefighters failed to find any smoke alarms in the house.

Eric Pang, president of the National Liaison Committee for International Students in Australia says universities should do more to help students find suitable accommodation and better educate them about the dangers of the Australian landscape.

In March two students from Pakistan died after a wave washed them off rocks at Phillip Island. At the time, police spokeswoman Cassie Stone reportedly said: “Victoria takes pride in being a preferred destination for students from overseas, yet the repeated occurrence of fatal incidents involving international students suggests we are falling well short in our duty of care.”

A debate about how much duty of care educational institutions can reasonably be expected to exercise towards their students flared as early as 2005, when an international student from China, who was studying at the University of Canberra, was found dead in her flat. Her body had lain unnoticed for seven months.

Kanan Kharbanda, 26, an Indian student studying for a master’s degree in accounting at the Melbourne Institute of Technology had been in Australia for five months when he was attacked by a group of people at Sunshine station in March. Punches to his head have left him blind in his right eye. “My story was reported in newspapers in several states in India,” he says.

There are fears among education experts that negative publicity overseas and within Australia about the plight of international students could start a reputational bushfire that might have serious ramifications for the international education market.

Questions are also being asked about workplace exploitation of international students, who are permitted to work a maximum of 20 hours a week during term. An international student from Pakistan, who was paid $1.26 an hour for 158 hours’ work as a security guard at the Australian Open tennis is now suing several companies for being treated like a “slave”.

Nyland says there is sufficient evidence to show that the higher education sector sees international student safety and welfare as an issue best not researched, in case information is revealed that challenges claims that Australia is a safe and welcoming environment for them.

Several months ago the Victorian Government promised to establish a taskforce to investigate ways to tackle welfare deficiencies, but it has so far made no formal announcements and has refused to answer questions from The Age.

Instead, Jacinta Allan, Minister for Skills and Workforce Participation, whose portfolio covers the area, responded through her media spokeswoman Lidija Ivanovski with the following sentence: “We take student welfare extremely seriously and would urge anybody aware of any mistreatment to contact the department or police.”

The Federal Government is similarly tight-lipped about international student welfare. Asked what measures, if any, the Government had taken to handle welfare problems, Kimberley Gardiner, a media spokeswoman for Education Minister Julia Gillard said, via email, that a review of the higher education sector had been commissioned, but did not specifically answer questions posed by The Age. The review is due to report at the end of the year.

Meanwhile, Australian Education International has signalled a change of course in its approach to international students. The agency charged with building the education export sector will now shift its focus from growth to “sustainability”. That means broadening the range of countries from which international students come, encouraging diversity in the courses they study, getting the best out of links between Australian and overseas institutions, and getting the international student numbers right. (About 65% of foreign students come from Asia, with half of them studying management and commerce, mostly in Melbourne and Sydney.)

“Certainly, I would say that sustainability is the aim” rather than growth as in previous years, says Fiona Buffinton, chief executive of AEI.

To draw students from a wider range of countries, AEI has opened offices in the Middle East and Latin America, to “future-proof” the sector from economic downturns, she says.
For students such as E-Thing Gee, who are navigating their way around the social, cultural and political road map of Australia, concerns are more immediate. Gee has left her own country, but without a place of her own to live in, she is yet to feel at home in Australia.

Sushi Das is an Age senior writer.