Influx from Asia drives up profits

Australia's earnings from foreign students soar as sector widens catchment sphere. John Gill reports

July 3, 2008

An influx of Chinese and Indian students has made education one of Australia's most successful exports of the past decade, echoing recruitment successes by UK higher education, a new study shows.

A report by the Reserve Bank of Australia says that while earnings from resources, manufacturing and tourism have wilted over the past year, the country's income from education has soared.

In 2007, foreign students spent A$12.1 billion (£5.9 billion) in Australia, and education "sales" have been rising at a rate of 13 per cent a year for the past seven years after allowing for inflation.

This buoyancy is a far cry from a decade ago, when financial crises in Asia saw the flow of students from Thailand, Indonesia and Malaysia dry up. Universities that had become overreliant on income from students from South-East Asia were badly hit, prompting them to expand their recruitment efforts to other parts of the world.

Since then, there has been a rise in the number of students coming from Latin America and Africa, but the major surge is from China and India, which accounted for just 8 per cent of education exports in 1997 but 36 per cent last year.

The glowing assessment of Australian efforts comes in the same week as a report by the Quality Assurance Agency that analyses similar issues in the UK. The study paints a broadly optimistic picture of overseas student recruitment, concluding that universities are aware of the "substantial learning and cultural issues involved" and "appreciate the importance of meeting expectations and providing specialist support".

It states that in some UK institutions, particularly in London, international students account for between 20 and 30 per cent of the total student body, with plans for more expansion a common feature.

The study is based on audits of 59 institutions of which 90 per cent had overseas students, who are increasingly important to UK universities because of the fee income they bring in. It suggests that even relatively small institutions are avoiding the pitfalls of an overreliance on particular countries as a source of students.

In one example, an institution with about 6,000 students had 600 international scholars from a total of 67 countries.

However, the report raises concerns about specific problems encountered, including claims that recruitment agents used by universities sometimes supplied inaccurate information to prospective students.

Another problem facing both students and institutions is the language barrier, with the QAA study suggesting that smaller, specialist institutions found it hard to provide necessary English-language support.

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