Which universities are most exposed to international student losses?

Ian Marshman and Frank Larkins from the Centre for the Study of Higher Education at the University of Melbourne have released research assessing which Australian universities are most exposed to the downturn in international students.

Below are key extracts:


The predicted revenue losses of 38 Australian universities to 2024, as a result of the decrease in overseas student revenues linked to the COVID-19 pandemic, are modelled in this study. A 2020 outcome and two longer term scenarios to 2023-2024 are modelled. It is demonstrated that the universities face very serious challenges with varying degrees of financial management risk.

Based on the analyses conducted universities are placed into three categories in accord with the financial management risk challenges that have been identified. Universities are predicted to face either high, medium or low risks over the period from the present to 2024, because of the loss of overseas fee revenue…

Seven universities are placed in the highest financial management risk category – Monash, RMIT, University of Technology Sydney, La Trobe, Central Queensland, Southern Cross and Canberra universities. Another 13 universities are assessed to face medium financial management risk. The remaining 18 universities, just under half of the total sector institutions, have been categorised as facing management risks that are of lower severity.

The nature of the risk varies according to the relative reliance on international fee revenue and the underlying financial resilience of individual institutions. The adverse consequences of the COVID-19 pandemic on the university sector are both immediate and can be anticipated to endure for many years…

Data and Analysis Methodology…

For the purpose of the present in-depth modelling the universities are clustered into four groups determined according to the size of their international student activities as listed in table 1. Group A is the cluster of 5 universities profiled previously (1) with overseas student revenues in 2018 in excess of $500m. Group B includes 7 universities with 2018 revenues between $200m and $500m. Group C has 14 universities with overseas revenue in 2018 between $100m and $200m. The remaining 12 universities in group D had overseas student revenues of less than $100m…

The relative importance of the four clusters of universities in aggregate in terms of their contribution to international student activities is shown in table 2, ranked in appendix A according to overseas fee revenue…

The 12 universities in groups A and B enrolled 57% of the overseas students in 2018 and received 70% of the fee revenue. The group A revenues were 3.4 times greater than the 2009 result and the group B revenue 2.6 times the 2009 figure. Collectively, these universities are the dominant players in the overseas student market and ended 2018 in a strong financial position…

At an individual university level, the Group A Universities (Sydney, Melbourne, UNSW, Monash and Queensland) achieved the most sustained rate of increase in international student fee revenue of more than three times the 2009 figure over this period (appendix A, column 6).

Other strong performers in group B with a multiple of more than three times were UTS, Deakin and ANU. A small number of universities in group C and D also reported strong growth over the decade as their international activities expanded from a comparatively low base. The 13 universities with exceptional growth are shown graphically in figure 1. The five group A universities are shown in red…

These data would indicate that Australian universities have enjoyed a decade of remarkable revenue growth as a result of the expansion of international education. This would suggest that, assuming the exercise of prudent financial stewardship over the past decade, most universities will have had the capacity to build up reserves to help deal with at least a temporary major revenue shock occasioned by COVID-19. The subsequent analysis indicates that this is not the case for all universities. Some of those with pre-existing weak balance sheets or with very large international student programs appear not to have been able to build an adequate buffer of reserves…

Some 12 universities have a dependence greater than the sector-wide average of 26.2%. These universities in rank order are: Federation (39%), RMIT (36%), Sydney (35.4%), Melbourne (34.7%), UTS (35%), Monash (34.1%), UNSW (33.4%), Central Queensland University (33%), Macquarie (30.6%), Queensland (29.1%), Deakin (28.7%) and Southern Cross (27.4%) It is noteworthy that all the group A universities (shown in red) are among universities with the greatest dependence. The average for all universities is shown in green…

The 2018 expenses on continuing operations as a ratio of the cash and investments held by universities is shown in figure 3. The universities are again ranked from the highest to the lowest ratio. A number greater than one means that the university has annual expenses greater than their accumulated total cash and investments reserves. RMIT is the most vulnerable university with annual expenses being 8.6 times reserves. ANU is in the strongest position with annual expenses less than reserves at a ratio of 0.62…

Integrating the data shown in figures 1 and 2, there are nine universities for which international student fee income constitutes at least 30% and there are seven universities with 2018 expenditure that is more than three times 2018 cash and investments…

Three large metropolitan universities, RMIT, UTS and Monash are the only ones included in both of these extreme subsets. These are potentially the least resilient and among the most financially exposed to a loss in overseas fee revenue…

Based on the analyses conducted, consistent with the scenarios modelled, universities are placed into three categories in accord with the financial risk management challenges that have been identified. The categorisation of universities as facing high, medium or low financial risk over the period from the present to 2024 is based on the impact of loss of overseas fee revenue. Other sources of potential revenue loss have not been considered in the present analysis but are briefly covered in the Conclusion below. The categorisation of universities is shown in table 3…

This analysis and associated modelling demonstrate that both in the short term and the longer term under both benign and more lasting impact scenarios of COVID-19 several Australian universities appear to have little funding capacity, in terms of readily available current assets, to be able to absorb the likely loss in revenue as a result of a significant decline in international student enrolments. Within the sector a number of universities will be greatly challenged by the consequences of COVID-19. For a few this may create existential issues in terms of ongoing financial viability…

Three of the most vulnerable universities and ten of the 13 medium risk universities are metropolitan universities for which the scale of international student enrolments has become the greatest risk factor.

The universities in the High Risk category face significant financial challenges well above their capacity to absorb within available reserves. This suggests that without an alternative source of revenue growth they are facing a significant period of cost containment as a central part of any longer term financial sustainability strategy in the event actual COVID-19 impacts reflect the assumptions on which both the optimistic and the pessimistic scenario are based.

Four of these universities were identified in section 4 as already the least resilient irrespective of the consequences of the COVID-19 pandemic.

Clearly, the concept of risk management has escaped many of Australia’s universities. Rather than taxpayers coming to their rescue and rewarding their poor judgement, they should be exposed to their folly.

Otherwise, Australia’s universities will be incentivised to take greater risks in the future to maximise revenues, knowing that Australian taxpayers will bail them out when things go bad.

Full report available for download here.

Leith van Onselen


  1. Exposed to their folly? Sure, they already are. But, what should be the consequences?
    Lafge staff redundancies? They can handle that, historically speaking. Any other suggestion?

    • The people that Leith suggests should bear this pain are the very people who had no say in this’ ‘folly’.
      Secondly, the taxpayer has been off the hook from funding unis over many years. The proportion of funding has fallen from ~80% to less than 40%. My point is Government are totally complicit in this folly.

      • Take a look a the APRI’s report from yesterday. The Go8 unis, which have benefited most from the international student deluge, have actually decreased the number of domestic students on their books.

        The notion that the Unis have been underfunded by taxpayers is laughable. Instead they have pissed the bounty on bulking up administration, bullshit research, and shiny new buildings. It hasn’t gone into actual education of Australians – their primary purpose.

    • DominicMEMBER

      This is the argument for bailouts every time: But … but … save the jobs!

      BS. If an institution is facing restructuring /demise anyway, those jobs are going like it or not.

  2. the problem with international uni students is just a tip of the iceberg of the international student problem.
    Just small fraction of all “foreign students” are actual uni students on our public universities – huge majority are fake students who just use student visa loophole to come here to work.

    we could easily deal with real students but over half a million people and their dependents on student, special, bridging, graduate, … visas who do not study are the problem.

    • I’m surprised by how many foreign ‘students’ have partners and babies / children. What a drain.

  3. Arthur Schopenhauer

    Letting 170 years of capital investment fall in a heap is idiocy, Leith.
    It has taken 8 generations to build up University infrastructure in Australia. Proposing it collapse in a chaotic way works against the interest of the nation and its citizens.
    A serious prune is required, but letting it collapse will see all that capital plant and know how move offshore. It’s against Australia’s strategic interests.
    I get the anger, and the Universities should not have been left off the leash, but there are more pragmatic options than“Burn it all!”.

    • GlendaFMEMBER

      Whilst I tend to agree. The bottom line is that if they don’t suffer any pain, then they just continue down that same old path with no changes. This society that we have created seems to be childlike in that it can’t seem to learn from its own mistakes without some ‘tough love’.

      • I reckon that’s the root cause of everything…nobody can deliver or receive bad news.

      • Arthur Schopenhauer

        Yeah, they certainly need to be pruned and IMHO there needs to be a reconstitution of Vocational Colleges/Institutes of Technologies and removal of private TAFE providers.
        Putting a cap on administrative staff salaries (say $350k per annum for a VC would be a start.)

    • gibber_blotMEMBER

      Indeed. Forget about all the work that universities have done and are doing during this crisis, just dump the huge research and teaching critical mass that has been invested in during the last 100 years.

      Universities are not a private business — they are a public good. The fact they haven’t been funded as so is a problem. Letting them collapse is not a great solution. The ones that will go are the regional campuses, not the Go8 universities with the millionaire vice chancellors, which is the narrative MB are pushing.

      • Actually, we need a royal commission into the whole corrupted mess. The University sector have become rent-seekers to rival Australia’s banking industry. They’ve trashed entry and teaching standards, sold out to an autocratic foreign power (China), and have become key middle-men in Australia’s immigration scam.

        They have moved so far past their initial purpose it’s beyond a joke.