Australian universities are entering a ¡°new era¡± where they can no longer rely on international education earnings to underwrite their solvency, according to former La Trobe University vice-chancellor John Dewar.

Professor Dewar, now a partner with advisory firm KordaMentha, told a visiting delegation of UK university administrators that a longstanding Australian practice of increasing overseas recruitment to cover rising costs was ¡°being closed down¡±.

¡°Government is sort of revoking the license that universities have had, for two decades really, to just go out and recruit more international students,¡± he told the delegates, during a Sydney round table organised by edtech company TechnologyOne.

He said foreign student flows had enabled universities to keep their revenue ahead ¨C albeit ¡°sometimes only slightly ahead¡± ¨C of costs, in a pattern that had prevailed since the mid-1990s but ¡°came to an end¡± with the?widespread deficits?of 2022.

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While that could have been a ¡°one-off¡±, the government¡¯s ¡°almost unannounced change of approach¡± to visa approvals suggested otherwise.

¡°Vice-chancellors are telling me that the financial impact¡­is almost as bad as Covid, and in some cases, it¡¯s worse. We¡¯re dealing with another Covid. I¡¯m¡­glad that I escaped the sector last year. I¡¯m not sure I would have had the stomach to go through that whole process of managing a significant downturn in revenue.¡±

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Professor Dewar said universities that had been ¡°carrying serious deficits¡± would find that their anticipated returns to surplus were no longer on the cards. ¡°They will start looking at their cash and saying, how long can we do this? I suspect they haven¡¯t quite fully absorbed the revenue implications of the new regime because they don¡¯t know yet.¡±

Federation University in regional Victoria is??from about 200 staff, or 15 per cent of its permanent workforce, after a post-Covid enrolment downturn was ¡°exacerbated¡± by the ¡°unexpected¡± change to student visa arrangements. In the UK,?almost 60 universities?have launched staff cutbacks as tightened immigration policy aggravates a funding crisis caused by rising costs, depressed domestic recruitment and a freeze on tuition fees.

Professor Dewar said the two sectors were experiencing changes that were ¡°different in nature but similar in intent¡±, as their respective governments targeted international students to reduce migration.

¡°I¡¯m not sure the politics will change,¡± he said. ¡°It¡¯s all expediency. It¡¯s playing to the gallery. But it doesn¡¯t feel to me like the gallery is going to want a different tune anytime soon.¡±

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Sharon Harrison-Barker, secretary and registrar of the University of Hertfordshire, said the UK government was yet to ¡°allow a university failure¡± but that could change.

¡°In the UK, now, the international students are paying for the education of home students,¡± she told the round table. ¡°I can¡¯t quite work out¡­how you maintain fees at ?9,250 without the extra income coming from somewhere.¡±

Australian National University policy analyst Andrew Norton said the government¡¯s apparent change of heart towards overseas students was likely to be sustained. He said that prior to the ¡°distraction¡± of the Covid border closures, international education¡¯s image had been tarnished by ¡°endless issues¡± such as cheating, underpayment, work scams and overcrowded accommodation.

¡°This has been brewing for a long, long time,¡± Professor Norton said. ¡°I think a correction was coming.¡±

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He said Australia needed to set rules in its national interest, but also had an obligation ¡°not to treat people badly¡± through the ¡°total policy chaos¡± of?baffling visa rejections?and?about-turns on work rights.

¡°The signals we¡¯re sending are all over the place. Eventually, this will come back to bite us. We need clear, stable rules where if people don¡¯t qualify, they know why¡­and are not ripped off in the process.¡±

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john.ross@timeshighereducation.com