Blood sucking capitalists fasten on international students

The extraordinary growth in international student numbers (see below chart) has led to accusations that Australia’s tertiary education providers are using them as “cash cows” to be milked for easy fees and profits:

And it’s not hard to see why. As illustrated in the next chart from the NSW Auditor-General, fees from international students roughly doubled over three years and now dwarf those from domestic students:

The easy profits on offer has seen private education providers spring up like mushrooms in a bid to get in on the action. Last month we reported how services business, Education Centres of Australia, is preparing for an IPO off the back of surging revenue from international students, especially from India and Nepal:

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 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…

It said 54 per cent of its students came from India and Nepal…

Last week, FTAlphaville ran a similar report on Navitas – another company which is cashing in providing agency services to Non-English Speaking (NES) students seeking to study in Australia:

Earlier this year, a consortium of buyers took an Australian company private in a multi-billion-dollar deal. The move wasn’t a play on commodities, real estate or any other of the other lines of business you might associate with the country’s economy.

Instead, it was all about education.

Navitas, which was founded in Perth in 1994, was bought for $1.5bn USD by a consortium which included private equity firm BGH, Australiansuper, the country’s largest pension fund, and Rod Jones, its former chief executive.

Its business model relies on the huge rise in international students looking to study in English-speaking countries. Navitas is part of a little-understood network of companies and agents that influence where these students end up — and which university receives the lucrative fees they are willing to pay for a Western education…

Navitas had an annual turnover of $930m in 2018, and has 45 partnerships with universities around the world, which provide more than half its revenues…

Other business are involved in the increasingly valuable supply chain for international students. The following graph, from the Navitas takeover documents, captures the scale of the commercial opportunity which Australian institutions have flocked to participate in…

It is worth highlighting that these private companies are targeting NES students, such as those from India and Nepal. As MB has documented previously, such students are over-represented in cases of plagiarism, academic misconduct and underperformance, as documented in May’s Four Corner’s expose and elsewhere. They also tend to use education visas as a backdoor to accessing working rights and permanent residency

Therefore, providers like ECA and Navitas are likely to drive further degradation of tertiary education standards across Australia.

Put simply, Australia’s higher education system being has been commercialised into a system where international students pay huge fees to effectively buy their qualification, often for the express purpose of gaining work rights and permanent residency.

This process has been facilitated by the tertiary institutions themselves, who have relaxed both entry and teaching standards in a bid to maintain the flow of international students and fees.

The big losers from this scam are domestic students and recent graduates, who are having their degrees devalued. Residents and workers across Australia’s major cities are also having to put up with rising congestion and lower wages as international students are exploited en masse across the labour market.

Given the plethora of scandals reported across the tertiary education sector via the international student trade, removing the direct link between studying in Australia and permanent residency is essential to cleaning up the system.

Australia’s education sector must be forced to compete on quality and value alone, not as a means of circumventing immigration policy for backdoor permanent residency.

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.

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Comments

  1. why these companies are even called “educational” institutions?
    they are all about money, selling visas and giving nothing else

    and while number of international student visa holders doubled in last few years number of international students actually fell
    none looking for a degree wants a fake Aussie degree

    • St JacquesMEMBER

      Yep, if I was a bright spark from Asia, where would I want to earn my degree? Oz, USA or UK? derrrr……The obvious that needs stating over and over again. Well said Doc X. Again.

  2. internships and full-time employment post degree

    Only Aussies should be allowed to intern for free – foreigners should be required to get a $150k/year salary or be deported. After all, they are supposedly better than us.

    • reusachtigeMEMBER

      I disrespectfully disagree! Our corporations should be able to hire the best people on the planet freely and that means the best graduates or at least those willing to work the cheapest!!!

  3. reusachtigeMEMBER

    There’s no need for the “blood sucking” thank you very much. It’s just “Capitalists”. Youse all hate anyone who have a go at making any profits.

    • St JacquesMEMBER

      Too right oh mighty big one, Straya is a KAPITALIST KUNTRY, and its life source is sucking KAPITAL, not blood.,

  4. Jumping jack flash

    Not just universities profit from the international students.
    These students, usually fully funded by parents, are happy to work for very little and so facilitate wage theft which is now required in this ultra-competitive globalised environment for business owners and employers to increase their own wages, and therefore the amount of debt they can own.

    A business owner “employing” an international student has hit the jackpot. They could probably get away with paying them 3.20 an hour or something like that. After all, thay dont really need the money and they’re grateful for the experience.

    • kiwikarynMEMBER

      The parents are happy to fund them as once the kids get permanent residency, they can bring the parents over for free healthcare and a Govt pension. Paying for the kids to study overseas is their retirement plan.

  5. To the extent that the market is responding to opportunity, yes that is capitalism.

    Given that the opportunity has been gifted directly by Govt policy, that is cronyism.

    It would be hard to blame capitalism for any of the world’s problems today. If you look at things with open eyes you’ll see that almost all problems have their nexus in Govt policy. Governments pick winners and losers and the money flows to the winners — it’s that simple.

    Absent a government presence the economy would be a free-for-all and the winners would get there on merit.

    It is in the government’s power to destroy ECA if it wishes, by simply removing the the path to PR for all foreign students.

  6. Is ▪️712,000 foreign students and ‘partners’ ▪️

    The table only shows the primary visa holder via DHA.

    ▪️ 615,000 foreign students primary DHA across a spray of visa rackets.

    ➕63,000 as foreign student ‘partners’ no English test full work rights as the ‘secondary’ off the above primary.

    ➕ 34,000 as special visas, scholarships/ DFAT.

    ➡️ 712,000 Foreign Students and Partners ▪️

    They only pay $8.3 billion in fees nationally
    (only NSW $3.4 billion is shown).

    From money earned here. Illegally.

    Their so called declared funds are heavily frauded.

    The Chinese etc just have to say they have the money as ‘self declared’ no checks. Unbelievable.
    And when it is checked, that’s like something out of Monty Python once – the money whisked in – ‘a statement’ and then back out of the bank account by the Nepalese, Indian or Bangladeshi agent trafficker to use for the next in line for unskilled migrant visa fraud.

    An absolute farce.

    They work illegally – in visa breach.
    75% (UTS & Sydney Uni report on this)
    This is in addition to part time or full time work rights as well.
    So many are working 1.5 or 2 FTE jobs illegally.

    It has massive unemployment and Australian wages impact.
    Each foreign student often with 2 or 3 jobs cash in hand fake id etc – organised by the foreign criminal agent procurer before entry.

    -> That’s at least 534,000 Australian jobs stolen.

    534,000 Australian unemployed costs the Australian taxpayer some $9.6 billion in Newstart.

    So the entire foreign student industry earns less in fees than the unemployment cost impact to Australians.

    And those fees were paid by money earned here illegally in jobs that made Australians unemployed.

    This is the dirty money the unis & colleges take as fees.

    The foreign students are not an export industry.

    Their money is earned here
    And Illegally, in visa breach.

    They are only here to work illegally, to repay their agent procurer loan debt, to send back remittances and to try & secure a PR for chain migration.

    The education itself is a joke.

    Only 3.6% of all the foreign students ever achieve a high income professional vocation in Australia or in their home country. (Migrant Pathways A decade On 2015 report)

    That’s right- 96% fail to be anything.

    Even the Productivity Commission said they are not a suitable migrant or PR intake.

    So here we have a third world migrant trafficking racket that produces no human capital value.

    One that destroys our education to Australians as it prostitutes itself as a migrant guestworker visa alibi

    That destroys housing affordability – esp for our youth and poor.

    Destroys jobs – all consumed by the foreign criminal syndicates and the guestworkers influx.

    Destroys wages – fallen 6.8% in real terns due to this.

    And the self evident congestion, filth, squalor, vice, crime & even terrorism associated with this migrant trafficking industry.

    🔻Socially corrosive
    🔻Economically destructive
    🔻Degrading our standard of living

    Why isn’t our youth picketing these fake campus’s / protesting in the streets, pilloring and shaming these vice chancellors?

    -/-

    The Australian people need to petition the Governor General for a Royal Commission into this whole grubby mess & shut it down.

      • boomengineeringMEMBER

        So good in fact that it warrants the petition to be started with MBers clamoring to be first on the list.

    • boomengineeringMEMBER

      Slash and burn via low quality immigration to destroy Aust in case of sovereignty challenge by Dutch or Aboriginals.

      • boomengineeringMEMBER

        Meaning there must be reason, is it that the ruling elite are happy with the puppets in charge or just globalization.