Vice-chancellor: “No regrets” milking international students

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UNSW’s outgoing vice-chancellor, Ian Jacobs, has “no regrets” about a five-year binge on international students that saw the university’s budget expand by 40%. From Times Higher Education:

UNSW was among the Australian institutions that accelerated their overseas recruitment from 2014, after domestic enrolments had plateaued. The university’s income from international students soared from A$378 million (£211 million) in 2014, shortly before Ian Jacobs took over in February 2015, to A$872 million in 2019.

The international windfall fuelled a 40 per cent increase in UNSW’s budget, transforming it into a A$2.4 billion enterprise. By 2019, foreign students were providing 36 per cent of its revenue…

Professor Jacobs said international tuition fees had bankrolled the university’s “extremely ambitious, altruistic and idealistic” 2025 Strategy, unveiled in 2015. “I’m absolutely sure it was the right thing to do,” said the vice-chancellor, who has announced his departure from UNSW next January…

Australia’s top university leaders have come under fire after the pandemic exposed their reliance on international tuition fees. Former Australian Catholic University boss Greg Craven said the “terribly precarious” system’s collapse had been “utterly” predictable. “We really walked into this,” he said. “No sensible milk bar owner would have planned their business on this basis.”

Why would Ian Jacobs have any regrets? After all, he was among the highest paid vice-chancellors in the nation earning a whopping $1.33 million in 2019:

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The exorbitant salaries paid to Jacobs and his ilk far exceeds those paid to vice-chancellors overseas, as noted by Michael Sainsbury:

The average annual vice chancellor’s (VC) salary in Australia in 2018 was just under $1 million, in stark contrast to the United Kingdom where the average was £270,000. Cambridge University vice-chancellor Stephen Toope, second highest paid in the UK, was on a basic salary of £431,000 in 2017-8 – a little over $A800,000…

So, it is little wonder that Duncan Maskell moved from a senior position at Cambridge University to Glyn Davis’s job the University of Melbourne when Davis was paid an Australian record $1,589,999 in 2018 in his last year as VC…

Hot on his heels was University of Sydney’s aggressive, pro-China vice chancellor Michael Spence, who has seen his pay soar more than 60% in the past five years…

Rounding out the G8, UNSW vice-chancellor Ian Jacobs received $1,288,478 in 2018 and University of Queensland’s Peter Hoj $1,199,999, Monash University’s Margaret Gardner (Glyn Davis’s wife), $1,109, 999, University of Adelaide’s Peter Rathjen $1,175,000 and University of Western Australia’s Dawn Freshwater, $1,095,000…

These salaries might be justified if they resulted in a better student experience and high quality teaching. Sadly, the evidence shows the opposite.

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Entry and teaching standards have been gutted and the number of front-line university staff have failed to keep pace with the explosion in international students numbers.

This is evidenced by the ratio of students to academic staff ballooning across Australia’s universities:

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The same phenomenon has occurred at Ian Jacobs’ UNSW:

The same cannot be said for administrative (non-academic) staff, whose numbers have bloated:

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In the nine years to 2018, the number of academic staff across Australia’s universities grew by 8,512, far less than the 13,344 rise in non-academic staff numbers.

Meanwhile, domestic students have been forced to carry Non-English Speaking Background students via group assignments, thus effectively acting like unpaid tutors to international students, cross-subsidising their marks and ensuring they pass.

And let’s not forget that our universities have also allowed Chinese influence to run rampant, threatening both free speech and free thinking.

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The curious thing is that Australia’s universities are run as ‘charitable organisations’. Yet the degree-factories they run, which rely on funneling large volumes of international and domestic students through cookie-cutter courses, are more akin to the very worst profit maximising corporations.

With regards to international students specifically, the whole ‘education industry’ has transformed into an immigration scam, with universities acting more like migration agents than educators.

Ian Jacobs may have “no regrets” at the transformation of our universities from ‘higher learning’ to ‘higher earning’. But I’m sure many of his staff at the coal face and many students would tell a very different story.

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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.