Go8 universities most exposed to Chinese international student bust

More forecasts have arrived on the financial impact from the travel ban on Chinese international students, which has blocked an estimated 106,680 Chinese students from entering the country, roughly 56% of the total Chinese student cohort.

Australian National University higher education expert Andrew Norton estimates universities could loose at least $2 billion in fee income alone should the coronavirus seriously disrupt the first half of the university year.

Chief executive of the International Education Association of Australia Phil Honeywood claimed the broader economic cost of the travel ban (i.e. beyond just lost tuition fees) could hit $6 billion under a worst-case scenario.

Whereas credit ratings agency Standard and Poor’s estimated a $3 billion loss in tuition fees.

According to Moody’s investor services, Australia has easily the biggest exposure to international students in the developed world, with the Group of Eight (Go8) universities especially exposed:

As shown above, international students accounted for one-third of total Australian university enrollments last year which rises to 40% for the Go8. This dwarfs the 20% international student concentration at second-placed United Kingdom and is roughly double Canada’s exposure.

Chinese international students accounted for 28% of total Australian international student enrollments in 2019 and, more importantly, one-third of Australia’s total $36.6 billion education exports:

The impact from the pull-back in Chinese students will be greatest in Sydney and Melbourne, given their four representatives in the Go8 rely on international students for one-third or more of their revenue:

As noted by The SMH:

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.

Obviously, the longer the coronavirus drags, the bigger the financial impact will be.

This is what happens when you put all of your eggs in the China basket.

Leith van Onselen
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  1. I hope it goes pandemic and brings the entire imigration Ponzi scam crashing to its knees. I don’t care what the cost is.

  2. I’m not so sure why this should cause a permanent shift in Chinese students –when the coronavirus washes over (which it will sooner or later) why shouldn’t thing go back to normal?

    Just saying..

    • If you’ve ever ran a business and we’re overly reliant on one client or customer and that source of income dried up even for a couple of months it can put you out of business, particularly if you were massively investing in that customer by building craploads of student accommodation etc

      • but if one runs business like that he/she should be stashing money on the way for the day when the end comes

        • ‘Should’, being the operative word. Most just see blue skies ahead. Those prone to extrapolation often end up paying a high price.

          • shawn: I don’t think Universities (government funded organisations with large reserves) are going to go out of business.

      • So unis are going to sack some casuals, then rehire some casuals when the students are back?

        Big whoop.

        • That’s what I like about you Peach – you’re a glass half full kinda gal.

          Our economy is bullet-proof. Nothing can touch it. Not even economic reality.

  3. Australian Universities aren’t selling education. They’re selling Permanent Resident visas.

    You can’t tell me the best students are choosing Australian universities over US ones for educational value or outcomes. In the US the odds of getting H1-B employment and then to be able to convert H1-B to a green card on any predictable schedule are getting progressively more difficult, especially for Indians and Chinese. None of them trust Trump, who is likely to be returned, and is likely to make things more difficult by changing the interpretation of laws on a whim.

  4. Scotty “Girls Change Rooms” Morrison preferred to protect his ego and trash the public service. Similarly, the vice-chancellors face a simple choice between protecting their egos or trashing public health.

  5. When, Phil Honeywood, whines publicly about this situation, is he making a statement of fact or is he demanding something or other from Govt?

    As in, “You must DO something!” Financial assistance? Immediate resumption of China flights? Rescind quarantine requirements? F*ck you, Phil, you parasite.

  6. Open a campus in China. Work with the CCP and they’ll have the campus built in a week and operational. Fly the lecturers and VCs over there. There. Problem solved.

    • You’re missing the point. It’s about visas first and education second. This only solves the education piece, which is just a ‘nice to have’

      • That’s even more screwed then. God, why can’t we have adults manage things around here. Just flog PR visas off for $200k a pop. Pretty sure there’ll still be as strong as demand. Why waste everyone’s time and effort churning out Mickey mouse degrees.

  7. rob barrattMEMBER

    Can’t they attend courses virtually? Since you can get a degree by online cheating I would have thought there would be no problem for our universities. The real disaster is for the rentals normally housing 15 per room.