International Student enrolments lacking in diversity?

The coronavirus outbreak has raised questions over Australia’s reliance on international students from China. What does this mean for VET providers set on growing their future CRICOS business?

Prime Minister Scott Morrison would have found the decision to close our borders with China due to the coronavirus a difficult one. With the Australian economy so deeply integrated with that of China, it was clear that the decision would entail a significant downside risk for Australia’s economy.

This included the impact on our tertiary education sector. With so many Chinese students marooned before traveling back for the beginning of their 2020 studies, the impact on our fourth-largest export was expected to be large – leading to large financial impacts on tertiary educators.

The coronavirus event raises serious questions. By bringing to light the number of students both universities and VET providers rely on from China in the most direct way possible – many not turning up for class – it forces us to ask whether our reliance on China as a source market is sustainable.

Over-reliance on Chinese students in Australian tertiary education

The government estimated that – as a result of the ban – there were almost 107,000 student visa holders from China caught outside the country on 1 February this year when it was enforced. Of these, most were enrolled in higher education, which had about 100,000 students overseas.

However, the VET market was not left unscathed. There were 2,669 international student enrolments from Australian VET providers stranded by the travel ban. Thankfully, many VET students were present and accounted for in the country; almost 11,000 were safely inside Australia at the beginning of February.

Australian tertiary educators have been relying heavily on Chinese students. Across the sector, there were 212,264 students from China in Australian education as of December 2019. This represented a 28 percent share of all international students and was 4 percent up on the prior year in 2018.

The VET sector accounts for 24,091 of these Chinese students. Half (or about 12,000) are studying at the Diploma level, with the vast majority at Certificate III or above. Predominantly, management and commerce is the field of study that most Chinese students pursue via VET providers (16,597).

Building a diversified CRICOS future for VET

Since the travel ban from China was imposed, the cost of reliance on Chinese students has been quite public – particularly for universities. While the true cost will depend on the length of the ban and whether measures like offering study online or deferrals are successful, first semester fees are in question. Standard & Poor’s put a potential $2 billion price tag on the crisis for our top universities.

VET has less of a financial problem but should be no less aware of the risks of reliance on any one market. In recent times, there has been relatively more growth coming from markets like India (up 45 percent year-on-year to September 2019 in the VET market) and Nepal (up 64 percent). These growth rates were much higher than China (which was only growing by 11.5 percent year-on-year).

While super growth rates in markets like Nepal raise their own questions, there is no question that sustainable diversification into more global markets is something that will benefit VET providers reporting CRICOS enrolments over the long-term. With a world-renowned system for delivering the skills employers need, there is no reason why demand can’t come from a broader footprint of source countries.