The number of students seeking an international education experience is ever-increasing. The number enrolled in higher education outside of their country of citizenship has risen dramatically, from 600,000 worldwide in 1975 to 3.3m in 2008. This is estimated to reach 8m by 2025. Typically, it is the English-speaking destinations that command the highest demand, regardless of the nationality of the student. According to UNESCO, the top three English-speaking destinations for international students are the US, UK, and Australia. However, a recent spate of articles in the media has highlighted a slump in international student numbers in Australia: students from China and India are favouring North America and the UK.

The contributions that international students make to their host economies cannot be overstated. They include:

– Injecting money into the host economy: it is estimated that international students contribute nearly $20bn to the US economy through tuition and living expenses, and A$16.5bn ($17.3bn) in Australia, including A$9.6bn from higher education alone;

– Providing a source of specialist skills for the host workforce;

– Adding cultural diversity;

– Benefitting foreign affairs by promoting the host country’s reputation abroad as a student and alumnus.

A decline in international student numbers should therefore be a worrying feature for any national government. For Australia, total enrolment numbers across all sectors dropped in 2010 after a strong period of growth since 2002. Higher education commencements by Indian students fell 49% from 2009, and international student visa applications fell by 20%. From Indian offshore students, visa applications fell by 63% and by 24% from Chinese students. English-language courses have also been hard hit, with enrolment falling 14% in Navitas colleges, a large private education provider.

The main reason that has been suggested for the fall in international student applications is the strong Australian dollar. Other sources suggest that it is the confluence of factors involving the destination country and the source country of the student. For example, in a June 2011 report commissioned by Universities Australia, Deloitte Access Economics concluded that the downturn in international higher education students is due to overseas reputation factors concerning the safety of international students, a tough stance on visas and the skilled migration programme, and the active recruitment of international students by competitor countries. The China People’s Daily Online reported that international students ‘suffered higher than average rates of robbery’ even though they are less likely to be victims of physical assault, citing findings from a study released last week by the Australian Institute of Criminology.

But there may be another underlying cause. StudentPulse data from the International Graduate Insight Group (i-graduate) examines perceptions and opinions among prospective international students in established and emerging markets across the globe. It suggests that while the cost of education for international students in the US and Australia has now become broadly comparable due to the shifting exchange rates, the reputation of institutions in the US is better, and China’s and India’s increasing wealth make it possible for students to seek to study where the institutional quality is perceived to be higher.

This year, StudentPulse responses have been received from more than 14,000 prospective students, of which the largest share came from India (16%) and China (14%). The results show that while many Chinese indicate they are interested in Australia, the majority are interested in the US (see table 1). For prospective Chinese students, only 16% of those who considered the US also considered Australia as a study destination, 30% considered no other country, and only 12% who considered the UK also looked across to Australia. This can be compared to 24% of prospective Chinese students who also considered the US if they considered Australia. Canada appears to be the closest competitor to Australia for Chinese students: 29% of prospective students considering Canada also considered Australia.

For prospective students from India, Australia is not a popular consideration for those considering the UK, US, or Canada as a place to study. Again, Canada and the US are the closest competitors to Australia, with 25% considering either of those countries after considering Australia (see table 2 below).

The next step is to look at results from the StudentPulse survey over the last few years to examine how student perceptions from major source countries have changed with respect to the attractiveness of destination countries.

In terms of reputation, both prospective Chinese and Indian students highly rate qualifications from the US, UK, and Canada compared to qualifications from Australia (see table 3 below).

Prospective student ratings on reputation would likely be influenced by publicised world rankings of higher education institutions in the press (29 out of 50 of the top-ranked universities are in the US, versus one in Australia).

Tuition fees and currency fluctuations

A new report by i-graduate for the UK Higher Education International & Europe Unit, ‘International Pricing Study: A snapshot of UK and key competitor country international student fees’ (available to UK university readers), examines international student fees in ten international student destination countries (including the US, UK, Australia, and Canada) in four disciplinary areas and three study levels (UG, PGT, PGR).

In general, it was found that the range of the cost of study in Australia is comparable to the US (fees range from US$15,400 – $45,000 in the US and US$20,100 – $49,450 in Australia). For a Chinese student looking to study in Australia, the cost of study has changed only marginally in the past three years (2008-11). However in the same period, the Chinese Yuan Renminbi strengthened by 13% against the US Dollar, and 37% against sterling (figure 1).

For Indian students looking to study abroad, it would generally be more expensive to do so now than in 2008 (figure 2). The US is 11% more expensive and Australia 18% more expensive. However, across the same period, the Indian rupee (INR) has strengthened by nearly 10% against sterling, making a UK education cheaper.

Furthermore, Indian students are prepared to pay less for an overseas education in Australia compared to Chinese students and consider a more limited range of acceptable prices compared to prospective students from China (see figure 3 below).

As the buying power of the Chinese Renminbi and Indian Rupee increasing with respect to the main destination countries, it should come as no surprise that Chinese and Indian students are looking to destination countries whose institutions feature higher in the world rankings.

Deloitte Access Economics have painted a bleak picture for the coming years for Australia. Projections for international student numbers well into 2012 are still on the decline, which will affect Australia’s supply of skilled labour. Australia has already taken the first step by conducting another review of the student visa programme, inviting submissions from education institutions, businesses, and relevant organisations.

Australia could also evaluate the other concerns noted here to improve their perceived institutional quality and reputation factors overseas. Students from China and India will keep looking to study overseas as their economies continue to expand and they seek to get more value for money.

This article was also published in The Observatory on Borderless Higher Education

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