International students are the “crack cocaine of academia”

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Timothy M. Devinney – chair and professor of international business at the Alliance Manchester Business School – claims that international students are the “crack cocaine” of academia and that the Covid-19 pandemic offers universities a once-in-a-generation opportunity to, among other things, wean themselves off this financial drug:

In the higher education sector, nearly all commentators and university administrators are shouting that the Covid-19 crisis represents a major threat to the system. There will be catastrophic shortfalls in university revenue, which will lead to massive job cuts and severe disruptions to learning and research…

[But] the Covid-19 pandemic represents an opportunity to undo many of the strategic mistakes universities and policymakers have made in the past…

Covid-19 has put the spotlight on the expansion of student numbers as the principal way to cover the increasing costs of running a university. Some of this has involved bringing in more local students through new courses, but the vast majority of the expansion of revenues comes from an explosion in numbers of foreign students…

For many institutions, foreign students are no longer marginal to their operations but core to their survival. The growth in their numbers occurred gradually, to help universities counterbalance what they argued was deficient government funding. In some ways, foreign student revenues became the “crack cocaine” of academia. What was a short-term fix has become a long-term addiction, serviced by a global market of agents who act as “dealers”…

Over time, these short-term fixes have exacerbated long-term structural problems…

This ultimately has limits that are often discovered only after they have been passed, as when a decline in the intake of Chinese students at its Sydney campus led to severe financial problems at the University of Newcastle in Australia in 2018-19, and when scandals erupted about the extensive use of essay mills by foreign students…

There is little doubt that the high concentration of international students at Australia’s universities, which dwarfs other advanced nations (see next chart), has led to a raft of deleterious consequences.

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Most notable among these has been the sharp decline in entry and teaching standards, as illustrated in detail in last year’s Four Corners “Cash Cows” report.

We have also witnessed a sharp decline in the ratio of teaching staff to students, suggesting the international student bounty has been wasted on administration and building ‘shiny new buildings’:

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Finally, our universities have compromised freedom of speech and democratic values by cozying up to the Chinese Communist Party (CCP), both via the 13 Confucius Institutes operating at Australian universities, as well as via Chinese groups associated with the CCP’s global spying and defence efforts.

Australia’s universities desperately need a crisis like COVID-19. They have forgotten that their primary role is to provide high quality education to Australians.

They are no longer serious educational institutions, but rather blood-sucking corporations run for profit by second-rate administrators whose main goal is to put warm bodies on seats to maximise fee revenue.

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That has meant compromising standards and democratic principles in order to flood universities with students whose academic standards are often woeful and hidden behind group assignments and soft marking. In turn, Australia’s productivity has been compromised.

It’s time to get rid of the administrators and return universities to the educators.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.