Tertiary education exports in 2021: Can Australia achieve an education export-led recovery?

10 minute read

While COVID-19 is ravaging the planet, the need for first-class education is still acute. Regardless of the challenges posed by the pandemic, Australia is working hard to defend its position as the third-largest exporter of tertiary education services.

Australian economy depends on the income derived from its international education sector. Over the past six years, the numbers have been rising steadily, reaching $37.6 billion in 2019. That's comparable to the revenue from the country's top commodity export — iron ore.

As some countries are slowly recovering from the havoc wreaked on their economies, others are working hard to stay afloat. The new environment will affect the way students and their families feel about a tertiary education for some time to come. Australia will need to position itself aggressively if it is to be well placed as the recovery gathers momentum.

Can Australia achieve an education export-led recovery? What can the country do to hold on to one of the pillars of its economy?

5 serious challenges faced by the Australian education sector

Five Australian universities hold spots in the top-50 of the World University Rankings. More than 720,000 international students were enrolled across various sectors in September 2019. That was an 11% increase over September 2018 figures. As expected, September 2020 shows a severe reduction in enrolment figures.

Australia is also currently facing a variety of challenges that may delay the recovery of the international education sector.

1. Relations with China

Chinese students make up the largest proportions (about 30%) of international students in Australia, followed by India (15%) and Nepal (7%). The heavy reliance on students from China is having a negative effect on the international education sector.  

In 2020, Australia and China are working through issues including allegations of cyber espionage, election tampering, and foreign political interference. Additionally, Canberra's push for answers on the origin of the virus has irritated Beijing, leading to sanctions and travel warnings to its potential overseas students.  

This is highly likely to affect the number of Chinese students seeking an education in Australia - even after borders reopen. 

2. Travel restrictions

At this moment, Australian borders are closed to anyone but citizens, residents, and immediate family members. This makes offline international enrolment impossible. Once the country starts opening borders, some restrictions are likely to remain.

For example, a 14-day quarantine period may stay as a necessary measure to protect Australian citizens. Such a quarantine requirement could lead to extra living expenses for international students.

3. Financial issues

COVID-19 has had a serious effect on the financial wellbeing of many people in different countries. For example, in India (the second biggest international student market for Australia), strict quarantine measures have seen the economy shrink by 24% with a corresponding reduction in purchasing power. The same is true for other potential markets such as Nepal and Brazil.

With decreased disposable income, there will be potential students who simply can't afford an overseas tertiary education any more, thereby reducing market potential.

4. Online education

As the pandemic hit, many universities began to reinvent their offers and provide online versions of their offline courses. While this supported in-country students, it also gave international students an opportunity to study online without travelling overseas.

A student who may have chosen Australia for its climate, safety, and affordability over, let's say, London, may now make another choice. Without travel expenses, climate, and environment to consider, students may settle for other universities with, perhaps, higher brand profiles.

5. Health worries

Until there is a tried and tested vaccine, many potential students and their families will worry about contracting the virus while away from their home country. Being stuck in another country while ill without the possibility of contact with your loved ones could become a significant psychological barrier to travel.

Even though Australia is affected by the virus to lower levels than many of its competitors, some students may decide to stay at home to wait out the pandemic.

7 ways Australia can defend its tertiary education exporter status after the pandemic

With all these challenges on the agenda, the Australian government and universities are assessing their options. But it’s clear that, to survive in the post-COVID realm, a rapid shift to address the new aspirations and needs of international students while mitigating the barriers they face will be vital.

In this ever-changing environment, fast and flexible decision-making is also vital. For major university and government machines, changes of direction can be difficult. That's why it's imperative to prepare for these changes as early as possible.

1. Exploring new student sources

In the past decade, Australia's dependency on China has been growing rapidly - and not just in the education sector. The need to balance this economic dependence with Australia's own values and interests is a pressing issue.

Just over a year ago, a paper by University of Sydney sociologist Salvatore Babones titled The China Student Boom and the Risks It Poses to Australian Universities addressed the issues of Australia's heavy dependence on Chinese students. This paper moved universities to rethink their enrolment requirements and alternative admission routes. It is an excellent source of inspiration for working with prospective students from countries other than China. 

It points to other key student markets including India, Nepal, Malaysia, Brazil and Colombia. And while Jakarta and Canberra finalise new free trade agreements, Australian universities should be positioning to attract Indonesian students after borders reopen.

It's worth noting, however, Chinese students will not disappear as a market. Regardless of the relations between the two governments, once the borders open, China will remain a significant market for us - just not to the same extent as in previous years.

2. Managing housing and visa costs

The average cost of living in Australia for an international student is just over $20,000 per year. Almost 50% of this amount goes toward covering rent, internet and utilities.

As the pandemic is decreasing the buying power of many potential students, Australia's relatively high cost of living may become a problem for applicants who are struggling to meet their tuition costs.

To help students from such countries as India, Nepal, Brazil and Indonesia bear the high costs, Australia may implement support programs. Modest housing subsidies would make Australian universities more appealing to students whose families took a financial hit during the pandemic.

An example of how this could work can be found in the NSW government’s arranged temporary crisis accommodation for international students who were at risk of eviction. A similar program could be instituted to ensure students in 2021 or 2022 choose Australia over other destinations.    

The Australian government may also consider cutting costs of visa applications to help students who suffered financial challenges due to the pandemic.

3. Simplifying the visa obtainment process and integration

Once the pandemic hit, students who hadn't entered Australia stayed beyond the borders. To keep these students interested in continuing education in the country and attracting new candidates, Australia has relaxed some visa and eligibility requirements.

The government is granting student visas in all locations outside Australia, so when borders reopen, students can enter immediately. Applicants will receive additional time to provide English language results, biometrics, and health reports in places where the pandemic interrupted such services.

By continuing to process visa applications, the Australian government is working toward a smooth student arrival process as borders reopen. Additionally, it could set up programs for enrolling international students to integrate them into the local student community while maintaining pandemic restrictions such as social distancing.

Psychologically, the pandemic can be taxing on international students. They face the added pressure of living and studying in a new country without family support. Helping them deal with isolation and other social issues could improve their experience and contribute to better academic achievements.

Finally, while borders are closed, some people can still travel to Australia if they fall into one of the exempt categories. As the epidemiological situation improves, Australia may consider creating a special exemption category for international students with a 14-day mandatory quarantine upon arrival.

4. Facilitating the transition to permanent residency

International students from such countries as China, India, Nepal, and Brazil often choose the education destination based on permanent residency (PR) prospects. Many tertiary education exporters (including Australia in the past) have taken advantage of the appetite for PR status to attract talented candidates.

Canada, for example, is currently making the transition from the student visa to PR much easier. These steps are allowing it to gain a competitive advantage over the USA, which is currently making obtaining any kind of visa or residency more complicated.

Since July 2020, overseas students at Australian institutions have had the opportunity to apply for the temporary graduate visa (subclass 485) to stay in the country for two-to-four years after graduating and gain permanent residency.

So the Australian government isn't far behind Canada but could do more in this vital area to increase the appeal of Australia as a tertiary education provider. This measure could also be used to drive students to pursue postgraduate education as a means of increasing their chances of getting PR. 

5. Focusing on degrees that sell

Attracting international students calls for strong institutional positioning. This is currently achieved by equipping agents to represent university brands effectively. The niche promotion of the unique attributes of the university's brand is a simple way to make it appealing to students from other countries and reduces the impact of overall university rankings. Griffith University, for example, is rated as the global number two institute for hospitality courses. It leverages this specialist positioning powerfully in attracting its student cohort.

Furthermore, after the pandemic subsides, degrees that sell may be different from those that students expressed preferences for were before COVID-19. Focusing on research projects and infrastructure most relevant to the national interests in the post-COVID reality will show the world that Australian universities are adjusting to the new normal by focusing on high demand degrees (healthcare, marketing, IT).

6. Stressing safety

In the post-pandemic world, health and safety may become the deciding factors for students when choosing an education destination. Just like crime rates, COVID-19 case-fatality ratios are turning into an important metric.

Australia managed to do a comparatively excellent job containing the virus. We have a 2.9% case-fatality ratio compared to Canada's 6.9% and the UK's 11.9%. The rate is also lower than in Indonesia, Brazil, and China.

Strict preventive measures have helped Australia deal with the pandemic in a timely way and keep the population relatively healthy. This could turn into a trump card when attracting international students who may otherwise consider the United States, Canada or the UK as education destinations.

7. Promoting the destination

Promoting universities and degrees more effectively is just part of a high-energy education marketing strategy. I would advocate for Australia promoting its international education credentials as effectively as we have traditionally promoted tourism based in attributes including:

  • A warm climate
  • A low crime rate
  • A low case-fatality ratio during the pandemic
  • A wide choice of top universities (five of them in the top-50 of world rankings)
  • A feasible permanent residence opportunity

A high-quality marketing campaign has the potential to open up new student markets while kick-starting demand from existing ones.

So, while each university or institute is creating its own identity, Australia could consider funding a global initiative to position this country for post COVID success. A unique world-leading initiative, it would have the potential to move Australia to a higher position on the preference list of top tertiary education exporters.

Powering up the road to recovery

Institutions the world over have suffered losses due to the COVID-19 outbreak. 

As one of the world-leading exporters of tertiary education, Australia was among the hardest hit due to border closures. As the pandemic subsides, however, each education exporter has the opportunity to position for success. The earlier we begin working toward recovery, the faster we will gain competitive advantage and recover lost ground.

Australia has all the resources to support its status as the third-largest exporter of tertiary education services. Positioned correctly, we can emerge from COVID in even better shape than our primary competitors. Some measures are already in progress. Others are worth serious consideration and heavy support.

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