Education industry queues up to milk international students

The rapid growth in international students (see next chart) has led to accusations that Australia’s universities are treating them as “cash cows” to be milked for lucrative fees and easy profits.

And it’s not hard to see why. According to research by Jerry Zheng, the content editor for OneClass, international tuition fees (17.88%) at Melbourne University increased 3.5 times faster than the inflation rate (5.17%), and 2.6 times faster than domestic tuition fees (6.76%) between 2015 and 2019:

International tuition fee increases year over year at the University of Melbourne from 2015 to 2019.

Looking at the tuition fees of bachelor of commerce students at Melbourne university highlights these trends more closely. According to Zheng, international students saw a whopping $6,456 increase in tuition fees between 2015 and 2019, 9.3 times larger than the increase in domestic tuition fees over the same period ($692):

University of Melbourne's bachelor of commerce tuition fee increase from 2015 to 2019.

It’s a similar story across New South Wales, where international student fee revenue has eclipsed domestic fee revenue since 2015, according to the NSW Auditor-General:

Now private education providers are lining-up to cash in, with international students services business, Education Centres of Australia, preparing for an Initial Public Offering (IPO) off the back of surging revenue from international students. From The AFR:

ECA told fund managers it made about $100 million a year at the revenue line, had more than 15,000 applications in 2018, takes on more than 7000 students a year and has had more than 50,000 graduates…

The company reckons it can take international students through various stages – from assisting with English language courses, to pathways to university, through their degrees and internships and full-time employment post degree.

ECA founder and CEO Rupesh Singh delivered the pitch to fund managers in Sydney and Melbourne late last week, alongside CFO Naresh Bishnoi and chief operating officer Gavin Dowling…

ECA was pitched as a leading Australian education provider to international students. It said 54 per cent of its students came from India and Nepal, while 16 per cent were from the Americas, 13 per cent from Asia, another 13 per cent from other sub continental countries, and 5 per cent from elsewhere.

It is interesting that ECA’s main clients are from India and Nepal. As we have documented previously, these students tend to be of lower quality and are overly represented in cases of academic misconduct, plagiarism, and underperformance.

Thus, providers like ECA could be facilitating the degradation of tertiary education standards as documented in last month’s Four Corner’s expose, and elsewhere.

Indeed, these types of outcomes are precisely the result of Australia’s higher education system being commercialised, with international students being milked as cash cows for easy profit.

Basically, a system has been created where international students pay big fees to effectively purchase a qualification, often for the purpose of gaining permanent residency and/or working rights. In the process, both entry and teaching standards have been progressively eroded in order to keep the numbers of international students (and profits) flowing.

The obvious losers from this system are domestic students and recent graduates, who are having their degrees devalued, alongside residents and workers in our major cities, who are having to put up with both rising congestion and lower wages as international students are exploited across the labour market.

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Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Comments

  1. It is fantastic that some foreign “students” now have to pay $6,456 more than the foreign “students” of 2015.

    What better way to reduce overcrowding?

    Every foreign “student” should be required to pay $6000/year to the ATO and that $6000/year can be refunded if the graduate get a $150k/year salary (and most will never get a $100k/year salary).

    • You think students who can afford hundreds of thousands of dollars at the top university in Australia wont be able to get a 100k salary? Maybe you lack of intelligence is why you are working a minimum wage job at MacDonald while ranting here like a loser!

    • Also the fees went up by 6000 but you currency fell by over 20 points in that 4 years so it actually alot cheaper than it was in 2015.

      • I got a 8.0 in my Ielts and finished a three year degree in Monash so i think my English language skills are better than yours. How does it feel to know that you will never be as rich as these international students you keep whining about?

  2. How to get in on this? What do I need to set up a training institute filled with cashed up international students?

    • It’s pretty easy mate, there are consultants out there who do this for a living.

  3. reusachtigeMEMBER

    I take great pleasure in milking international students dry. There’s so much profit potential in accommodating them. I’ll squeeze in up to 4 bunks per room so can get 24 of them into my bigger 3 bedders, or even more if there’s celling height for triple bunks, and charge them a competitive rent of 250 bucks each. Drowning in it!

    • @reusachtige “drowning it” sums up the attitude of your average drone in Australia.

    • I also take pleasure in milking Australian tourist and business when they operate in my country. its great pleasure to see them pay many times more than what it actually costs and milk them dry!

      • @SATZ the students are complicit in this behaviour, they simply arrive here to obtain a migration outcome, in effect, they’re paying for the privilege of permanent residency via an illegitimately obtained qualification.

      • What goes around usually comes around Satz. Since you’re so sour about Australians exposing your country’s rorts here, obviously you’d never want your PR or Citizenship and that is probably best for the good of this country.

      • No i dont want your citizenship, i came here for a decent education and international exposure but if this is your attitude toward international students like me who have dumped over 200000 dollars into this country and not worked a single day of my life here.Your markets fight so aggressively to get international students to come to your schools. If i had know better i would have gone to the U.S or U.k where talent is better appreciated.

      • And honestly your country isn’t all that great.Your economy is declining , no industry, crumbling infrastructure over-reliance on natural resources. Even your dollar is down by 25 points in the last e years.You need to see how many Australians are queuing up in Singapore to get a PR. Maybe it time to charge them 5x the price of everything!

      • And honestly your country isn’t all that great.Your economy is declining , no industry, crumbling infrastructure over-reliance on natural resources. Even your dollar is down by 25 points in the last e years.You need to see how many Australians are queuing up in Singapore to get a PR. Maybe it time to charge them 5x the price of everything!

  4. “It is interesting that ECA’s main clients are from India and Nepal. As we have documented previously, these students tend to be of lower quality and are overly represented in cases of academic misconduct, plagiarism, and underperformance.”

    Culturalist!