The value of Australia’s international student sector is expected to plunge 50% as border closures persist, new modelling from Victoria University’s Mitchell Institute shows.
Currently, more than 150,000 international students are stuck outside Australia, and with the COVID-19 virus overwhelming the health systems of India, the US and Brazil, there are fears that borders will remain closed well into next year.
The Mitchell Institute’s ‘Stuck in transit: International student update report’ uses the latest data to examine the impact of a third academic year of no international student arrivals on Australia's economy. For the first time, the report also examined the impact of online learning.
According to the modelling, Australia’s international education sector will shrink from $40.3bn in 2019 to $20.5bn by the end of 2022, putting massive financial strain on universities already struggling to recover.
Figures released in February by Universities Australia found that Australian universities lost more than 17,000 jobs due to the financial impact of COVID-19.
Universities Australia Chief Executive Catriona Jackson said the “brutal reality” of COVID-19 means that universities should settle in for a multi-year hit to their revenues.
“Continuing border closures mean universities face the double whammy of fewer returning students in 2020, and reduced numbers in 2021. The cumulative impact won’t be felt just in 2020 and 2021, but for years to come,” Jackson said.
The latest modelling by the Mitchell Institute shows that by November 2020, only 17,000 new students had enrolled from overseas, just 3.3% of total enrolments – well short of the 120,000 new students who would normally enrol every six months.
"While current students studying online from overseas helped stem the losses felt by education institutions in 2020, the trend is strongly down from this point onwards", report author, Dr Peter Hurley, said.
“While most of the economy is recovering, Australia’s third largest export sector is yet to hit bottom. Currently about 260,000 fewer international students are living in Australia than before the pandemic, a 45% reduction. This is greater than the entire population of the Northern Territory”.
Dr Hurley said the majority of the $20bn loss of economic value is in the form of goods and services spent in the broader economy: about 36% on accommodation and another 36% on hospitality and retail.
Is the worst yet to come?
The report warned that as students finish their courses and leave the country, the pain will worsen, with new students unable to enter the country to commence their studies.
“Missed intakes disrupt the pipeline of international students – who usually study for two to three years. This means low enrolments today will continue to impact for several years,” Dr Hurley said.
The report also found the most important factor to any recovery is the rate at which international students can enter the country again. The fate of Australia's international education sector now rests on Australia's border policy.
“Currently 150,000 students are stuck outside Australia. Even if the country allocated half of its current quarantine program to international student arrivals – it would take a year just to bring those students into Australia,” Dr Hurley said.