The fallout from the boom in international education

Alex Millmow, Federation University Australia

What if they built it and no one came? That thought must be running through the minds of some university vicechancellors and real estate developers about sinking resources and fortunes into building swanky student housing near the campus.

Some struggling universities have already offloaded city properties that were meant for teaching or accommodating their studentsSo far there is no sign of international students coming back until 2022. That too is looking conditional upon how the vaccine roll-out proceeds.

The poor state of our relations with China means that the numbers that do come from there will not be as great as they once were. It seems there will be plenty of empty student accommodation when things get back to normal.

No Australian city is more geared to the international students than Melbourne. Up until 2020, Melbourne was the ‘Boston of the Yarra’ which is how former Prime Minister Julia Gillard imagined us a few years ago. Just about every Australian tertiary provider had a presence in the Melbourne CBD, either in the form of a shopfront or an actual campus. Little wonder Victorian car licence plates proclaim it ‘The Education State’. The city precincts used to be crawling with students, especially near the university city campuses. Not now.

Yet there is still a wave of construction activity erecting more purpose-built student housing premised on the fact that the boom in international education will return. The same could be said of Australia’s other capital cities. Some of the latest accommodation being erected boasts hotel style catering to rather well-off students.

Universities were pointedly excluded from the Federal Government’s JobKeeper program on the premise that they lined their pockets from the boom in international education.

Even the new Education Minister, Alan Tudge did not credit reports that the sector had already shed nearly 20,000 jobs. Yet the closing of the Australian border has left all Australian universities under some financial stress.

The Government’s attitude seems to be that universities were foolish in putting all their eggs in the one basket and neglecting the domestic market. Yet it was Canberra that encouraged the Australian universities to be entrepreneurial as they pared back federal funding of higher education over the years.

Much of the revenue from the international education boom was spent upon hiring hot-shot researchers as well as erecting swanky new buildings to enhance student life on campus.

There is no doubt now that the higher education sector faces contraction. Universities have recently been culling the size of the executive ranks, tenured academics and rationalising their courses. Having a considerable pool of casualised staff means it's relatively easy to cut some costs. However, their greatest and most successful response to the lockdown and border closure has been to adopt blended learning using their digital platforms. This revolution, though, has its limits. Graduation ceremonies where the names of graduands are rolled out on screens with pre-recorded speeches by university chancellors and vice-chancellors is a terribly awful look.

The big question is: if more courses are to be online and virtual ,then is there really any need to come to campus?

This unwinding of the student accommodation building boom and how students now do their learning has ramifications for the economy. One irony is that Scott Morrison’s chosen people – tradies – and those small businesses that cater to meeting students’ needs or use their labour, will feel the pinch.