Losing a Grip on the Foreign-Student Market

Gwenda Kaczor for The Chronicle

January 27, 2011

On May 22, 2009, two men approached an Indian student named Baljinder Singh as he was leaving a railway station in Melbourne. They demanded money. Before Singh could hand over his wallet, one of the men stabbed him in the stomach. Singh screamed, "Don't kill me," but his assailants only laughed. That brutal attack followed several other assaults on Indian students earlier that month including the vicious beating of a student on a commuter train.

The attacks, much publicized in India and elsewhere, were the most newsworthy of a series of events and policy decisions that have led to an exodus of international students from Australia in recent months. The country's universities, once leaders in overseas recruiting, are grappling with a precipitous decline in the number of students from India and possibly elsewhere.

Australia's rise and (potential) fall as an academic destination should be a cautionary tale for higher education around the world. While many factors contributed to today's problems, a key one is that educational providers sought international students as way to bolster their bottom line. They forgot their core mission to educate individuals; instead they saw them as dollar signs.

3rd Biggest 'Export'

In the six months following the attack on Baljinder Singh, the number of Indian students applying for visas to study in Australia shrank by 46 percent. (Since then, the figure has continued to drop.) University leaders were concerned because Indian students represented Australia's second-largest source of international students (China was, and remains, first). In a public campaign to mobilize support to end the violence, they pointed out that education is Australia's third biggest "export" after coal and iron ore.

It may seem strange to think of higher education as an "export" but international students do provide foreign income because they transfer money for their tuition fees and living expenses from their home countries to Australia. For that reason, a decline in international students could significantly affect the balance of trade. It would also play havoc with university budgets, which were (and are) heavily dependent on the fees paid by international students.

It was not always like this. In 1990, Australia enrolled only 47,000 international students; today there are more than 600,000. Around a third are enrolled in universities. The rest are studying in technical-education institutions, English-language schools, or high schools.

For universities, the growth in international students was spurred mainly by financial exigency. Beginning in the early 1980s, Australian governments of all political persuasions gradually reduced the public contribution to higher education from close to 100 percent to less than 40 percent (and at my institution, Macquarie University, only 28 percent). Universities have replaced the lost income with the fees paid by large numbers of international students. Those students, who are charged whatever the market can bear, subsidize Australian domestic students, whose fees are fixed by the government. The government also makes money from international students by charging them high visa-processing fees.

Given the money they must spend to study abroad, international students gravitate toward subjects that will provide an economic return on their investment. Not many choose to study philosophy or classics. But income is not their only motivation for choosing a course of study. A substantial number of international students are interested in staying in Australia permanently. Until recently, qualifying for an occupation listed on the government-maintained Migration Occupations in Demand List, or MODL, assisted an international graduate to immigrate. Accounting was one of the occupations on the MODL. Proving once again that people respond to incentives, the course of study with the largest enrollment in practically every Australian university is accounting.

Rise of Questionable Courses

Australian education is generally high quality, but any policy can be scammed and the MODL was a gift to those out for a fast profit. Cooks, hairdressers, and airline pilots were included in the MODL. Not surprisingly, technical-education students who wanted to migrate sought to enroll in training for those careers, and unscrupulous providers were quick to respond. The result was cooking schools without kitchens, hairdressing courses without salons and, wouldn't you know it, pilot-training schools without any airplanes. It took a while to uncover such abuses because students were not particularly bothered by those scams. Their aim was not to learn to cook, style hair, or fly, but to obtain permanent residency. The program diploma was simply a means to an end.

As journalists delved further into the back story of Indian students targeted for attack, it became clear that most were not enrolled in universities but in bogus technical courses. Recruited by unscrupulous commission agents in their home country, the students were promised permanent residency if they completed their program. "Completion," in this context, did not mean successfully mastering a body of work or learning a skill; it simply meant paying the required tuition and receiving a worthless diploma. Students lived many to a room sharing a single bed (a practice known as hot-bedding) while they drove cabs or worked in fast-food restaurants to earn money to pay their tuition. Although Australian student visas allow students to work for only 20 hours per week, many worked long hours to earn their tuition.

Clamping Down

The public was appalled, the political backlash was terrible, and it was clear that something had to happen. In February 2010, nine months after the incidents in Melbourne, it did. The government canceled 20,000 permanent-residency applications, revoked the MODL, and revised the visa-assessment process. Shortly thereafter, Australia had a federal election in which immigration was a major issue. Not surprisingly, visa requirements were subsequently tightened not just for traditional migrants but for students as well. Students from high-risk countries (those with a history of students who overstayed their visas) are now required to demonstrate that they have sufficient funds in the bank not just to pay their tuition fees but also to pay for food and accommodation for the length of their entire study program. After an outcry from educational providers and others, the government in December promised to review its visa policies again.

Although the tightened visa rules were largely intended to curb the abuses of bogus education providers, university students have been affected as well. A Chinese applicant for a visa to enroll in a three-year accounting degree now has to show evidence of having around $100,000 in the bank for at least six months prior to applying. The new financial requirements—coupled with an appreciating Australian dollar, the long waits for visas, and competition from other countries such as the United States—have resulted in a marked downturn in the number of students applying for visas to study in Australia. If the trend continues, universities will no longer be able to depend on increasing numbers of international students to make up for decreasing public support and inflexible domestic student fees.

Internationalization enriches the learning environment for all students. By studying with students from other countries, domestic students not only learn about other cultures, places, and languages, but they also learn communication skills, tolerance, and fair play. Those are vitally important lessons.

A problem arises, however, when international students are recruited for the income they bring. Universities that pursue that strategy make their budgets hostage to immigration policy, international financial conditions, even to a few domestic hoodlums. Students do not think of themselves as foreign "exports," and we in higher education should not think of them in that way either.

Steven Schwartz is vice chancellor of Macquarie University, in Sydney.


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