Overseas students cash cows? Far from it: Babones

Julie HareEducation editor

Dec 13, 2021 – 6.04am

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Far from being the cash cows for Australian universities as they are popularly portrayed, international students are “unprofitable” and do not pay their fair share towards their education, according to a new book.

The book, Australia’s Universities: Can They Reform? also claims that most of Australia’s universities would be more financially sustainable if they capped overseas student enrolments at 2010 levels, which would also make them “small, healthier and more stable institutions”, says the book’s author, Sydney University sociologist Salvatore Babones.

Australian universities are far from underfunded and have miscalculated international students’ financial contribution, says Salvatore Babones. Steven Siewert

“I had bought into the narrative that international students were highly remunerative for Australian universities,” said Dr Babones.

“But when I started adding up the amount of revenue that Australian universities generate on the basis of their domestic student enrolments, a different picture emerges.”

By Dr Babones’ reckoning, domestic students are funded by the federal government to the tune of $654,396 per student at the Indigenous Batchelor Institute in the Northern Territory. Acknowledging Batchelor as an outlier, Dr Babones also calculates per-domestic student funding at Australian National University to be $69,563, $45,080 at the University of NSW and $42,727 at The University of Melbourne. The average, he says, is $29,000.

International students at those universities pay, on average, $39,750 at ANU, $40,740 at UNSW and $38,171 at Melbourne, he estimates. The average revenue per international student is $29,500.

Dr Babones’ calculations are based on an accounting sleight of hand that ascribes all student tuition and research funding to domestic students. So, for example, funding the ANU’s Mt Stromlo telescope is attributed to domestic students but not to international PhD and research students who may actually use it for their studies.

His reasoning is that under the Higher Education Support Act, including associated research monies, all government funding is for the purposes of educating domestic students.

However, Andrew Norton, a higher education policy expert from Australian National University, disagreed with Dr Babones’ rationale.

“I don’t think including research funding in domestic student funding makes sense for comparing income per student, since research funding is allocated on criteria that do not include coursework student numbers,” Mr Norton said.

Using the Commonwealth Grant Scheme, Higher Education Loans Program fees and upfront domestic student contributions and fees as the revenue base for domestic students, Mr Norton estimated average per-student revenue of $20,000 a year in 2019.

Dr Babones said Australian universities’ hunger for international student revenue was so they could pursue “idiosyncratic” goals.

“Australian universities set strategic goals of their own. It’s their decision if they want to start a nanotechnology centre or rise in the rankings. Vice-chancellors presumably have written in their contracts performance benchmarks that are set by the university, not by the government,” Dr Babones said.

Julie Hare is the Education editor. She has more than 20 years’ experience as a writer, journalist and editor. Connect with Julie on Twitter. Email Julie at julie.hare@afr.com