Leader: It makes the world go round...

But the pursuit of money can be a zero-sum game, and one nation's loss may be another's gain - as the UK could learn to its cost

April 14, 2011

"Universities are all about money," writes Steven Schwartz, vice-chancellor of Macquarie University in Australia, on the blog of Ferdinand von Prondzynski, principal of Robert Gordon University in Scotland, who in turn says that these places of liberalism and learning have become "the most conservative and reactionary bodies in society".

In an unusual exchange that aims to spark global debate, it seems that institutions a world apart are wrestling with a common problem: what was once a means has become an end. Professor Schwartz cites James Engell and Anthony Dangerfield's Saving Higher Education in the Age of Money, which notes that the place of money in universities has been inverted: it used to be a necessity for the support of teaching and basic research; now universities offer courses and conduct research with the express aim of earning cash.

This can have unintended consequences. In England, the new funding regime could see overseas students supplant domestic students. As the government caps numbers of home and European Union students to limit its public spending, universities in the UK, the second most popular destination for international study, turn their sights to overseas students, on whom no limits apply. Many predict that home applications will fall in 2012 when the new system kicks in, but vice-chancellors foresee no such problem with foreign students - a steady supply of income with no tuition fee limit or pesky access agreements to honour.

Overseas students were worth £2.1 billion to English higher education in 2009-10 - 10 per cent of total income. And some institutions aim to double international student numbers in the next four years. Publicly, the Higher Education Funding Council for England says the projected 2010-11 growth already "implies optimism" on the part of universities. Privately, it thinks their longer-term plans are "unbelievable".

How times change. Where once the international market was seen as volatile, it now looks positively stable in comparison with the home market, where "there is extreme nervousness", says Les Ebdon, vice-chancellor of the University of Bedfordshire and chair of the Million+ group of new universities.

If international students are valuable to universities, they contribute even more to other parts of the economy - £10 billion by some estimates. That is why the government's plan to reduce by 80,000 the number of student visas, mostly to private colleges (a gateway used by some 40 to 50 per cent of overseas students en route to UK universities), makes little sense to anyone but avid Daily Mail readers.

The private providers affected are threatening to sue the government for discrimination over the decision to apply different rules compared with universities. The move, they warn, could lead to financial problems and possible closures. As the ensuing negative headlines reverberate around the world, vice-chancellors could also find their future income-generation plans in jeopardy.

Not everyone is unhappy, for in the money game, one party's loss may be another's gain. As one poster on our website says: "This is wonderful news for Australia, New Zealand, Canada and the USA. Thank you, UK Border Agency, for sending overseas students our way."

Professor Schwartz and his colleagues in Australia, facing their own funding problems, will indeed be grateful for the cash.

ann.mroz@tsleducation.com.

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