On February 1 the federal government banned foreign nationals arriving in Australia from China. That left about 98,000 Chinese people with a visa to study here stranded and universities have been scrambling to respond. Some campuses, including Sydney University, will allow students affected by the travel ban to take up their courses much later in the semester than usual. Australia’s biggest university, Monash, has delayed the start of first semester and all students will undertake study online for the first week.
Federal Education Minister Dan Tehan says international students will be given “maximum flexibility” to continue their studies, including online or remote alternatives.
There’s even talk international students could continue studies on “quarantined” regional campuses until the threat posed by the health emergency recedes.
Australian National University higher education expert Andrew Norton says universities face “huge logistical problems” even if the travel ban is lifted relatively soon. He warns that offering alternatives such as online learning will be problematic because that is not what most international students are paying for. “They are paying premium prices to study at very nice inner–city campuses and enjoying the Sydney, Melbourne lifestyle,” he says.
The coronavirus emergency has underscored the university sector’s growing reliance on international students, especially those from China. There have been warnings that the large number of Chinese students at Australian universities had left the sector vulnerable to political risks, including a shift in Chinese government policy or a slump in enrolments triggered by a geopolitical crisis at a regional flashpoint such as the South China Sea.
But Norton says having a massive cohort of Chinese students suddenly stranded because of a health emergency “was not the kind of scenario” universities were planning on.
Chief executive of the International Education Association of Australia Phil Honeywood says the timing of the coronavirus outbreak has been especially bad. “I don’t think anyone envisaged how big a set back this would be for Australia specifically because it came so close to Chinese New Year celebrations and at the beginning of our academic year,” he says.
There is a risk students stranded in China switch to alternative courses in Britain, Canada or the United States where the academic year begins in September. “There is a danger that competitor destinations make mileage out of Australia’s special difficulties,” says Honeywood.
The cost of the disruption to Australia’s international education sector depends on how long the coronavirus outbreak lasts. Norton estimates universities could loose at least $2 billion in fee income alone should the emergency seriously disrupt the first half of the university year.
Honeywood says the broader economic cost (beyond lost tuition fees) could be as much as $6 billion under a worst-case scenario.
Nationally, almost one in four international students is from mainland China, but the share is far higher at some of Australia’s biggest universities. The inner districts of Sydney and Melbourne – which host Australia’s biggest universities – have benefited disproportionately from the surge in international student numbers.
At Sydney University overseas student fees reached $885 million in 2018, more than double the total in 2014. About 70 per cent of that university’s international student revenue comes from Chinese students. At Melbourne University consolidated revenue from “fee-paying onshore overseas students” reached $883 million in 2018, up a hefty 17 per cent on the previous year.
Analysis by regional economist Terry Rawnsley shows total employment in tertiary education in the inner-Sydney region jumped by 37 per cent between the 2011 census and 2016 census. In inner-Melbourne, tertiary education employment rose by 28 per cent in the same period.
There have also been significant flow-on effects from the money spent by international students – and their visiting friends and relatives – on things such as accommodation, dining, retail and entertainment.
The NSW government said international education was worth $11.2 billion to the state in 2018 and supported over 46,000 jobs. That’s more than double the number of coal industry jobs in NSW last year.
A report by the international ratings agency Standard and Poor’s, which assesses the creditworthiness of many universities, said it is likely Australia’s tertiary institutions will be able to “absorb” the financial hit from the coronavirus-related travel ban. But it warned the episode highlights the risks from the sector’s “growing dependence on the lucrative international market, which has flourished against a backdrop of stagnant government funding and heavy investment in the pursuit of higher rankings”.
Another ratings agency, Moody’s, said the disruption would be manageable if the coronavirus is contained within the next few months but cautioned a longer outbreak “has the potential to materially dent revenue and cash reserves for Australian universities”.
Norton says it is fortunate the nation’s biggest, most financially secure, universities happen to host the most Chinese international students. “If there’s one upside to this, it is that the universities being hit hardest are wealthier unis and therefore they are in a somewhat better position to deal with it than many others,” he says. “Nevertheless it is extremely serious for those institutions if the students can’t get here.”
Rawnsley says the coronavirus emergency could trigger a reassessment by education providers with longer-term implications for the economy. “This might just be that event which makes people realise that the recent exponential growth in international student numbers is not going to go on forever,” he says. “If education providers do get a bit nervous they will keep more of their money in their pockets.”
Matt Wade is a senior economics writer at The Sydney Morning Herald.