How universities milk the international student ‘cash cow’

Last month’s Four Corners report on Australia’s $35 billion international student trade described the industry as a “cash cow” that is being milked by Australia’s universities for easy profit:

“In terms of attracting international students, universities will do whatever they need to do…they are the cash cows. There is no doubt about it.” Academic

Last week, I presented research from Jerry Zheng, the content editor for OneClass, which used official data to estimate that international enrollments could surpass domestic enrollments at the University of Melbourne by 2020.

That is, in 2014 international students represented 31% of the University of Melbourne’s student population. But in only four years, that percentage rose to 46% after international student enrollments soared by 83%. By contrast, domestic enrollments have fallen in consecutive years (2017 to 2018). Therefore, if current trends persist, international students could outnumber domestic students at the University of Melbourne by 2020.

As I noted last week, similar forces are at play at other Group of Eight universities:

In 2017, the University of Sydney, Monash, ANU and the University of NSW all had higher international student shares than the University of Melbourne after they also experienced explosive growth. Presumably then, it also won’t be long until they too are dominated by international students, assuming current trends persist.

Jerry Zheng’s research also shows the alarming extent to which the University of Melbourne has pushed up tuition fees for international students alongside student numbers.

In a nutshell, international tuition (17.88%) increased 3.5 times faster than the inflation rate (5.17%), and 2.6 times faster than domestic tuition (6.76%) between 2015 and 2019. And if we use the University of Melbourne’s bachelor of commerce tuition as a case study, tuition fees for international students increased by $6,456, whereas domestic students only saw a $692 tuition increase between 2015 and 2019:

In 2018, 4178 new international students enrolled in 2018. That makes last year the largest intake of international students ever by the University of Melbourne.

As more foreign students come to study at the University of Melbourne every year, their tuition continues to increase along with it.

International tuition fee increases year over year at the University of Melbourne from 2015 to 2019.
Average international tuition fee increase from 2015 to 2019: 4.5 per cent.
On average, international tuition fees have increased by 4.5 per cent every year from 2015 to 2019.

For students in the Bachelor of Commerce program, international tuition fees were $33,760 (lower bounds) in 2015. To study in the Bachelor of Commerce program in 2019, it costs international students $40,216 – a 19.12 per cent increase in four years.

The bachelor of commerce program is the primary field of study for international students at the University of Melbourne. In 2017, more than one-third of foreign students chose this program.

graph of the most popular fields of study for international students at the University of Melbourne in 2017.
*This figure shows the field of study choices of international students at the University of Melbourne, irrespective of year of study.
Hypothetically, if 38.2 per cent of the total international students (19,988) enrolled at the University of Melbourne’s bachelor of commerce program in 2017, the university would have nearly gained $281 million from international tuition fees alone…

The university would need 29,633 domestic students enrolling in the bachelor of commerce program to match the revenue gained from international students – nearly 10,000 students more

For commonwealth supported students, the domestic tuition fee has increased year-over-year at a considerably slower rate.

On average, domestic tuition fees have increased by 1.6 per cent every year from 2015 to 2019.

Looking only at the tuition fees for the bachelor of commerce from 2015 to 2019, domestic students saw an increase of $692 to their tuition, while international students saw a whopping $6,456 increase between those four years – a difference of 9.3 times.

University of Melbourne's bachelor of commerce tuition fee increase from 2015 to 2019.
UniMelb’s bachelor of commerce tuition for international students has increased by 9.3 times that of domestic tuition in a span of 4 years.
Student contribution amounts are capped by the government, unlike international tuition fees.

This means that international tuition fees will continue to soar unabated for as long as international students will keep flocking to the University of Melbourne.

Let’s look at how both domestic tuition fees and international tuition fees at the University of Melbourne stacked up against the Australia’s annual inflation rate.

Comparing the University of Melbourne's tuition to their domestic tuition and the Australian inflation rate from 2016 to 2019
Domestic tuition increases from UniMelb is slightly above the inflation rate. International student tuition is 3.5 times that of the inflation rate in the period from 2016 to 2019.
Using the current inflation rate for 2019 and, again, the bachelor of commerce tuition fees as a reference point, we can see domestic tuition increases has hovered slightly above the annual inflation rates on average.

Using the current inflation rate for 2019 and, again, the bachelor of commerce tuition fees as a reference point, we can see domestic tuition increases has hovered slightly above the annual inflation rates on average.

International tuition, however, has ballooned to 3.5 times that of the inflation rate from 2016 to 2019.

Tuition price increases for international students weren’t designed to keep up to pace with inflation, they were designed to accelerate the rate at which universities like the University of Melbourne could generate revenue.

Especially since the revenue generated from domestic students are only a fraction of what an international student can bring in.

In addition, it’s both prosperous for the school as well as the Australian economy given the purchasing power of the international students coming in.

Conclusion

With the current trends, the University of Melbourne, along with other Australian post-secondary institutions, will continue to enroll more and charge more to international students in the near future…

The combination of international enrollment increases and international tuition fee increases will only amplify the revenue generated from the international students in the coming years, and institutions like the University of Melbourne will continue to harvest from them.

No wonder Australia’s university sector is so opposed to reforms, such as tougher English language standards. They are making out like bandits from the international student boom, while the negative externalities on education standards, overcrowding in Australia’s major cities, and wages (given international students are key victims of exploitation and wage theft) are ignored.

Given the myriad of issues that have come to light from the Four Corners report (and elsewhere), Australia desperately needs a holistic assessment of the international student trade from a respected independent organisation like the Productivity Commission (PC). We need the PC to undertake a public inquiry and cost-benefit analysis to ascertain whether the international student industry is maximising the welfare of Australians, and to provide recommendations on how the system could be improved.

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Leith van Onselen
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Comments

    • I saw the title, thought about posting it, then thought I’m probably too old for that. Thanks for brightening my day.

      As a side note – not that i’ve tried jelqing, but a friend did. Apparently the outcome is not unlike our current economic situation. Yes it’s bigger, but never as hard or functional as the real deal and you can’t get the job done as well, although it aesthetically looks better.

  1. James navarro

    This doesn’t stop unless there is a major financial crash, ww3 or global pandemic .

    Aust students dont have bollocks anymore and to state the obvious it question this is rac1st and the worst crime imaginable. Aust students have had bollicks removed by years and years of feminist and sjw indoctrination by their leftist teachers starting in kinder how they should be ashamed of who they are and should give up their country anyway as it never belonged to them.

    • reusachtigeMEMBER

      As much as I believe that students should, and are, supporting boosted intakes of foreign learners I do agree that the communists have taken over our public education system and that is why I advise everyone to send their children to private schools or good Christian schools that still teach men how to be men and women how to be ladies. This is why I believe our tax dollars should not be spent on education and it should be privatised so that communist interests are minimised.

      • @reusachtige the government is now in the business of regulating how individuals interact with each other at Universities in response to the contrived Human Rights Commission report in 2016 into ‘rape’ at Universities.

      • HadronCollisionMEMBER

        some of the comments on this site have taken a worrying turn hard right

      • @HadronCollision I don’t see any problem with Govt bureaucrats who are nothing more than political activists dictating to young men on how they interact with members of the opposite sex.

  2. $35 billion foreign student Industry. Let’s examine that.

    It may be $35 billion in ’gdp economic activity’ in the 712,000 foreign students & partners onshore.

    just like if we brought a couple of million Bangladeshi into Australia to work at $5 a hour – that’s also a ‘$35 billion gdp activity’…

    but the overall effect of the foreign student industry is tens of billions negative social & economic cost to Australian citizens, taxpayers & our youth.

    The vast bulk of foreign students & partners are enrolled in very low level courses – averaging some $11,657 a year each for the visa & partner alibi.
    And the money to pay those fees earned here.
    Often illegally.
    Most of the courses & enrollments are at grubby little foreign owned & or sham fronted ‘colleges & institutes’ with no international recognition – or the Universities cashing in on the foreign student cash cow in ‘special needs’ segregated education – part time day & evening classes, short weeks, very long breaks & low level skill educators providing deliberately easily cheated or frauded courses – ‘courses & education’ that is available online or often for free in the migrants home country.
    One indicator of the scale of failure is the Productivity Commission in 2016 ruling that ‘foreign students are NOT a suitable or skilled intake for permanent residency. Or the 2015 report Migrant Pathways A Decade On – which found only 3.9% of foreign students ever attained a higher than average income or professional vocation – 96% did not.
    Exposing just what a farce this migrant intake & so called international education is.
    Third world adult migrant unskilled poor, willing participants paying bribes and in loan debt to foreign agent procurers – coming in on visa pretexts and nonsense courses to work & live illegally.

    To repay foreign criminal syndicates loan debt, to send back family remittances, as willing participants the foreign run criminal underground, job theft, vice or blackmarket activities, to attempt to secure a PR for Medicare & Welfare, and for the cash back when able in turn to be a sponsor / anchor in further third world chain migration.

    -/-

    The ‘Great Australian International Student industry $35 billion ‘Export’ Myth” exposed.

    The oft repeated claim:
    “The number of student visas has increased with the booming international student export industry in Australia, now worth an estimated $32 billion*.” (Prorated now to $ 35 billion in 2019 numbers)

    *The original source being a Deloitte Access Economics study commissioned by the Australian Education & International Students lobbyists.

    ➡️It may be $35 billion of ‘economic activity’.
    That is true.
    But they are not a $35 billion ‘Export’ industry.

    The original source.
    A 2015 Deloitte Access Economics Report paid for by the Department of Australian Education. Pure paid off propaganda.

    The ‘export $$ number’ has then been prorated from those 2015 numbers by the growth in foreign student numbers to now be a ‘ $35 billion export’.

    Original source – Deloitte 2015.
    https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economics-growth-opportunity-australian-international-education-011215.pdf

    Key takeaway.
    The report misleadingly describes the foreign student ‘economic activity’ as a ‘services export’.

    But it is one sided, not exposing their declared funds or actual source of income (which is primarily working illegally) or the foreign student wider social & economic cost impact to Australians.

    March 2018: 672,000 foreign students & partner across all visa categories.

    These include international student & secondary partners, post graduate & partners*, special visas, and DFAT scholarships & education visas.
    *Partners enter on a secondary visa with full work rights and no English test.
    All visa categories are heavily frauded in entry and funds.

    By visa groups.
    March 2018 International student 536,000
    March 2018 Graduate 65,000
    March 2018 DFAT / Other 12,000
    March 2018 ‘partners’ secondary visa 59,000
    Total = > 672,000

    Fact check.
    The sources to check this include VisaSure, DHA/ABF & Australian Education gov snapshots websites.
    This VisaSure link gives a simple summary & at bottom further links to the DHA detailed data.
    https://www.vsure.com.au/many-temporary-residents-working-australia/

    Last years growth rate was 5.7% (DHA quarterly report)

    ➡️ March 2019 Foreign Students & partners across all visa categories = 712,000.

    During 2018-2019 there has been a 5.8% growth rate (DHA or Dept of Home Affairs quarterly reports). It could be higher as the DHA statistics lag by up to 9 months.

    ➡️🔻 Now.
    March 2019: 712,000 foreign students & partners onshore is a conservative estimate…

    Their actual fee income paid?
    $8.2 billion Mode 2 onshore foreign students in the report, the other modes are fractional.
    And all the rest of the ‘economic value’ like family visits & so on added on again without cost impacts.

    So only $11,657 per foreign student / partner avesfd of about $1,000 a month for the visa alibi.

    See report in link Mode 2 Fees : $4.7 billion – $5.7 billion then, Page 74 footnote 24 hidden down the bottom)

    And now with growth of numbers est at $8.2 billion) are matched to the costs & profit taken by providers in delivering the ‘education service’.

    Cross check on those foreign student funds & offshore sources of income.

    This is the only real ‘import’ of money to spend here to claim as payment of an ‘exported education service’

    It turns out the money to pay even the primary applicant student fees is EARNED HERE.

    The foreign students come in with under $2.4 billion in declared funds, often rorted (DHA Declared Funds Report 2017) so what’s happening is that’s just enough to pay that new entire intake first semester fees.

    The rest is never checked, or borrowed from an agent procurer loan debt & fee or via a paid ‘uncle sponsor’ – the money only in the bank account long enough to get the visa, then whisked out again.

    And all the rest of the money earned here.

    Many are in agent procurer loan debt, even for just those first semester fees.

    The test being that if all foreign students funds had to be declared, all fees for the 4 year course paid upfront, plus government held bonds or monitored accounts on funds their 4 visa years living expenses of $28k a year as per most country intake rules (eg China) – then almost immediately 95% of our current intake would fail that criteria.

    Human capital value.
    Deloitte adds on a very arbitrary $8.7 billion human capital value (page 49) as they get the PR etc.

    What they fail to mention is that only 3.9% of the foreign students ever progress to a high income professional vocation (2015 A Decade On Migrant Pathways Report).

    So 96% of foreign students & partners DO NOT achieve a high income professional vocation in Australia (as a PR) or back on their home country.

    Cross check.
    The later Productivity Commission Report also found that foreign students were a very low quality unskilled & unsuitable PR intake.

    They rated them as negative human capital value compared to a more desirable highly skilled & proven human capital value intake.

    Their overall summary is that the vast bulk of foreign students are from third world countries, unskilled, not particularly young (many 30 year old adult) -and are doing very low level courses, so not a good PR intake.

    And we know that there is systemic fraud, easily cheated courses, manufactured ‘Education & courses that are readily available in their home country (often high school level in that country, but here dressed up as a certificate or diploma with no international recognition.
    And much of the ‘education’ is even free online globally.

    The overall view is that the foreign students are not here for the ‘education’ but to work illegally, to snag a PR, to be an anchor for chain migration, and many come in with significant foreign agent procurer debt, reinforcing their intention to work illegally in visa breach.

    The biggest issue however in the Deloitte report is their total failure to quantify the economic & social impact of the foreign student industry to Australians.

    Impacts for example that have now degraded Australian Education sector (fallen 10 places globally), created mass congestion, housing contention, and allowed almost 3/4 of a million foreign students to enter, live & work illegally, with large scale visa fraud and breach of their visa conditions & COE.

    Here are the details missing in the Deloitte Report by Economic & Social category:

    It uses the March 2018 672,000 foreign student & partner number, even tho this has now increased to 712,000.

    🔻1. Job theft & lowered wages for Australians. We now have 1.5 million Australians unemployed & 1.3 million seeking work.
    But we also have 75% of the 672,000 (2018 number) foreign students working illegally (Syd Uni & UTS studies), so that’s 505,000 in visa breach stealing over 505,000 Australians jobs, & lowering wages for all other Australians.

    Those 505,000 Australian unemployed cost $9.6 billion in Australian tax funded unemployment benefit costs.
    That alone exceeds the entire foreign student fee income (and of which most of which is earned here illegally).
    So on just one simple measure, the entire foreign student industry is economically negative (fees paid v illegal work & Australians unemployment impact)

    🔻2. Australian Wages Impact.
    The evidence is that the foreign students and the wider Temporary Resident group lower wages for all Australians in both the race to the bottom in wages paid, illegal work and casualisation of employment – costing tens of billions in Australian direct wages loss, loss of permanent jobs & plus taxation loss or avoidance.

    The estimate is that they lower all Australian wages by 6.7% or $48 billion, and the indirect tax loss (from no wages growth for all Australians, so less tax paid at what would be a higher rate) – that’s a hard loss taxation impact of $16.3 billion.

    🔻3. Australian Housing Impact.
    The report is silent on the fact that the foreign students & partners are long stay to very long stay (4 to 9 years is common in COE & visa extension & churn).

    The report is also silent on the fact that the 672,000 foreign students & partners occupy at least 134,000 ex Australian dwellings at say 5 per dwelling.

    They don’t mention the concentration but that is 91% or 603,000 foreign students in just Sydney or Melbourne.

    96% of 91% of foreign students & partners rent in ‘private shared accommodation’
    (DHIA & SCC housing studies) as the Universities & colleges only provide a tiny fraction (under 3%) of Sydney or Melbourne accommodation & its high cost. Far less affordable than foreign owned & run high density cram bunk share subletting.

    At an average of $180 a week each being the widely advertised market rent in Sydney for bunkshare – that’s $6.3 billion cash rent paid, but only $3 billion in what is ‘legal occupancy’ rent able to be declared, so $3.3 billion taken as cash plus negative gearing claims of another $0.5 billion.

    Plus add on the contention / rent impacts on Australian renters of at least another $3 billion negative.
    $6 -8 billion negative.

    Plus 116,000 Australian homeless & 360,000 Australians seeking affordable housing or on housing assistance costing the Australian taxpayer $3.7 billion.

    So at least $10 billion negative impact.

    🔻4. Congestion / public infrastructure.
    The foreign students drive some 108,000 cars on international licences (RMS/Vic Roads).
    Their fines are not even collected by NSW SDRO as it’s so heavily frauded in identity fraud.
    No registration, checks on identity or location or address systems are in place, or links to immigration & law enforcement.

    They heavily congest our trains & public transport. As anyone can attest to. Sparking massive infrastructure projects such as Sydney Light Rail ($4 billion) that they will never pay for.

    Tens of billions lost.

    🔻5. Environmental impact.
    There is also no mention of power or water usage impact, 300,000 foreign students & partners in just Sydney alone – the Desal plant, emissions impact & all the other folly of mass concentration – costing the Australian taxpayer even billions more.

    🔻6. Visa breach/criminal activity.
    No mention that the foreign student industry is the epi-centre of crime & the foreign run vice industry, willing participants trafficked in on a student alibi, or resorting to that as their main income onshore.

    No mention of the foreign student used as ‘mules’ in mass scale foreign criminal money laundering.

    No mention of the tens billions of dirty money washed in by the foreign criminal syndicates to buy those modest Australian established dwellings via a PR proxy for the rivers of untaxed cash in migrant subletting, vice & crime.

    No mention of the Foreign students queued up at Xwing to launder back their debt repayments & remittances offshore – some $5.3 billion flowing out from their $31 billion illegally earned here.

    🔻7. Impact to Australian Education.

    No mention of the cost & social impact to Australian youth now denied an affordable quality education, as the education sector prostitutes itself as a migrant visa alibi.

    Tens of billions in immediate & long term impact to Australians.

    -/-

    And it only gets worse.

    A ‘modest’ goal of 1 million foreign students in the medium term. (next 5 years)
    Deloitte Report prepared for Austrade.
    It’s a shocker.
    https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economics-growth-opportunity-australian-international-education-011215.pdf
    ——————————————————

    In summary.
    The foreign student Industry may be a $35 billion ‘yearly GDP activity’.

    But it is NOT an ‘Export’ at all, none of it.
    In is a massively corrupted, economically & socially negative program.

    At a very minimum $17 billion negative.
    Up to $26 billion negative.

    Each and every foreign student & their ‘partner’ – in any simple measure is at least negative $25k each in their individual economic & social impact.

    And that is just one set of our TR visa categories that are totally corrupted.

    The wider crisis.
    We had 2.431 million temporary residents in Australia in March 2018.

    Fact check / source.
    https://www.vsure.com.au/many-temporary-residents-working-australia/

    It has grown subsequently by 130,000 net new TR or 5.3% to now 2,561,000 as of March 2019.
    (The DHA website & quarterly tables at the bottom of the VSure page)

    2.3 million or 89% of the Temporary Resident visa holders are concentrated in Sydney & Melbourne (ABS)

    🔹Sydney pop 5.2 million.
    🔻1.3 million Temporary Residents.
    ◽️1 in 4 people.

    🔹Melbourne pop 5.0 million.
    🔻1.05 million Temporary Residents.
    ◽️1 in 5 people.

    We need a Royal Commission into our totally broken & corrupted Temporary Resident Visa system.

    And what better place to start that the fraudulent, corrupt, economically & socially damaging ‘international student industry’.

    • it is NOT an ‘Export’ at all

      Yep. It is only an export if the “student” is deported within 12 months of “graduating”.

      I have seen rich foreign students go back to Saudi Arabia, India, Sri Lanka, Thailand, Vietnam, China, Hong Kong.

      The dirt poor ones stay here and work for $10/hour – which is a dream salary for the dirt poor “graduates”.

      It all makes sense.

      As usual, the fake left does not understand what is going on.

      • proofreadersMEMBER

        And in the end, they do like being waited on hand and foot after they have ordered their smashed avo and their latte?

    • McPaddyMEMBER

      Another important point to note is that the influx of foreign students willing to work for anything (both before and after they have their degree) effectively sucks away a large proportion of the “sh1t” jobs that young people need to get their first work experience – where skills are not required, but work ethic is. This was is a critical step in career development for me. My kids won’t get that chance. More of them staying at home for longer without the chance to gain independence at the proper time. Hacks me off. We all pay for this.

    • Can we get Cameron Murray from SAP to do the economic case in support of smashing the Great International Student Myth?

  3. The oversease student visa scam has become so lucrative, one of its major proponents is taking their company public.

  4. reusachtigeMEMBER

    The more overseas students we can encourage to study at our universities the better it is for everyone as this sector helps boost the economy.

    • It helps boost vice chancellor salary profits. With the lowest paid vice chancellor getting $500k/year in profit, it is great for the graduation hat retailers.

      The more graduation hat buyers we import, the better it is for the hat retail sector of the economy.

  5. The universities are being run like small African countries. I know of one case where only 17% of the tuition paid by students is actually passed on to the school in which they are enrolled. The other 83% is embezzled away for other parts of the university, and unconscionable salaries for fatcat administrators. Mobutu Sese Seko would be proud of these guys.

    • Notice how those who push immigration in Labor, are of a certain background – either migrants or children of migrants.

      They are propelled forward in the Labor ranks because they are happy to celebrate how great immigration is, because, they, themselves are great!

      • For labor it’s the beautiful marriage of far left open border ideology (virtue signal – tick), and neoliberal growth craziness (corporatist backers – tick). A match made in heaven.

    • Morgs, Kenneally talks about immigration as a ‘cultural tool’. Really, we are pretty diverse as it is, why do we need more ‘culture’?

      • What is a ‘cultural tool’ anyway? As an economic tool its pretty clear – suppress wages push up property prices and consumption.

      • At turbo-charged rates, immigration is becoming a destructive cultural tool. Do we need more people speaking foreign languages in public places and at work? Do we really need more ethn1c food outlets? Do we need to move away from a secular society, and have more people with non-progressive cultures, such as arranged marriages, anti-gay sentiments or FGM?

      • oh good a tool to disassemble culture…thanks kent….how about you don’t fix stuff that aint broke kent? you might’ve avoided that complete c0ck up on may 18th eh? kent!