Universities across Australia are laying off thousands of staff and regional campuses are being shut down thanks to significant falls in revenue. With COVID-19 and Australia closing its borders international student enrollment numbers have plummeted. Furthermore, the competition to enroll domestic students next year is going to be intense and it’s likely that the smaller, regional universities will suffer as more students gain access to the larger, more prestigious institutions.
This does beg the question, why are Australian universities so dependent on foreign students for their revenue?
The universities claim that the decrease in government funding has forced their hand to seek out alternative sources of revenue, of which international students are amongst the most lucrative. Which is one part of the story.
The other part of the story, which isn’t mentioned, is that universities are starting to become big business. I was astonished to find out that we have 43 universities in Australia. For a population the size of Australia, where less than a third of the people hold a tertiary degree it is hard to understand why anyone would open a university.
However, if one scrutinizes the profits it becomes clear. The top ten universities in Australia delivered a total profit of $1.1 billion in 2019. That is up 46% on 2018. It is worth noting that for some universities international students account for up to 40% of their revenue.
OK, but what is the problem with universities in Australia?
Other than the fact that we have too many, the quality of the product is waning in order to deliver profits. I’m not saying universities should run at a loss, but once they start making $352 million dollars in a year, as Monash did in 2019, one has to wonder where the institution is focusing its efforts.
From experience, I have seen what happens to the educational product a university delivers once money becomes the dominant objective. The quality of the professors and lecturers declines, course content grows dated and students become disgruntled and feel robbed. This is especially true of post graduate courses.
In Victoria, universities are forced to report how many of their staff are employed casually or on short term contracts. So, to further highlight how important profits have become, consider that Monash and University of Melbourne reported that over 72% of their staff were employed on insecure terms. Without job security it stands to reason that the best and brightest are either looking for work elsewhere or they at least have an eye on the door while standing at the front of the lecture theatre.
What is the solution?
I’m not sure I have one yet. What I do know is that locking research and education together has benefits, but the model is growing stale. Our universities are ivory towers that have very little understanding of what happens in the outside world and seem particularly poor at preparing students for the job market.
Maybe tertiary institutions should become more like businesses. This means understanding what the customer demand is and then developing products with good customer fit. In this case the customers are students as well as the employers for whom those students will work one day.
I also believe that there is space for diversification in tertiary education. What can TAFE’s teach that universities struggle with? What can private training institutions, like General Assembly, bring to the party? Perhaps universities’ real problem is that they’re becoming all things to all people. If you’re going to be a business find a niche and dominate that space while charging a justifiable premium.
Perhaps students in the future will have a good rounded education when they’ve attended 3-4 tertiary schools. Maybe they won’t have an alma mater, but rather a unique combination of skills and knowledge they learnt at different schools that makes them better able to address an ever evolving world.
And maybe then we will need 43 universities in Australia, all exceptionally good at preparing students for specific challenges.