Australian language colleges and education agencies ‘collapsing’

More pain in store for Australian universities, as bankruptcy beckons the colleges and agencies that scaffold their international operations

March 30, 2021
collapse scaffold scaffolding damage destruction construction fall over fall down symbolising collapse of English language colleges
Source: istock

Australia’s vaunted international education industry is at a tipping point, with fears that scores of bankruptcies of colleges and agencies could stifle student inflows for the next decade.

Insiders said the industry was in crisis, as borders remained closed to international students and the JobKeeper wage subsidy scheme – which has kept many Australian international education businesses afloat through the pandemic – was wound up.

The International Student Education Agents Association (ISEAA) said up to 80 private colleges faced closure and the prospects for agencies were equally bleak after coronavirus eroded 60 per cent of their business. Board member Michal Sestak said 60 to 70 per cent of agencies could close.

“The longer this goes, the less recruitment channels we’re going to have when the borders open,” he said. “That will have a direct impact on the time required to regain [students] after Covid.”

Mr Sestak said his 25-year-old agency had been forced to shutter four offices in Europe and Latin America. “I have the resources to restart when the borders open but [some] agents would not have the money. They just run their balance to zero; they might have mortgaged their houses. We will end up with a handful of agents and half of the schools.”

The losses would pervade the economy, with a paucity of overseas students depriving housing and hospitality businesses of crucial income. Even the health system would suffer, with the loss of onshore international enrolments costing hundreds of millions of dollars in medical insurance premiums.

Universities would be significantly disadvantaged by a collapse of private colleges and agencies that scaffold their international operations. While international higher education enrolments declined by just 5 per cent last year, the number of new students fell 23 per cent – a downturn that will flow through to subsequent years, irrespective of any future recovery.

Education department figures suggest worse to come, with English language colleges – a major feeder sector for universities – suffering a 43 per cent downturn in new students last year. This understates the damage because the data exclude students on tourist and working holiday visas and those with combined visas for English and further study.

Brett Blacker, chief executive of representative group English Australia, said member surveys suggested commencements were 68 per cent lower in the last quarter of 2020 than in the equivalent period of 2019. He said new student numbers last year had slumped to 2006 levels. “Fourteen years of growth was just wiped away.”

Applications for visas to study in standalone English language colleges have fallen 80 per cent in the past 12 months, according to the Department of Home Affairs. “We’ve got no pipeline of [visa] lodgements [and] no students here onshore,” Mr Blacker said. “Normally, 31 per cent of our students go on to higher education.”

He said five English language colleges had already closed their doors, along with the five Australian and New Zealand campuses of global giant EC. “There’s no cash flow because there’s no business. How can you continue to pay rent and staff when you don’t even know when a student will be allowed back into Australia?” Mr Blacker asked.

“We’re on the cusp of seeing a lot of closures, particularly the independent small-to-medium businesses that attract students outside the main source markets such as China and India.”

This financial year, more visa applications to study higher education have been lodged from within Australia than from overseas. Education agents are relying largely on commissions from tourists switching to study or current students switching between institutions or sectors.

Onshore applicants from Nepal, Australia’s third biggest higher education source market, outnumbered those applying from overseas by almost four to one. “Everybody is fishing from the same pool,” said ISEAA’s deputy chair, Regina da Silva. “These students will eventually disappear.”

Executive officer Robert Parsonson said many students who had not seen family for years would leave when the chance arose. English language teachers would follow them wherever they could find work. “You lose a lot of expertise. Capacity has to be rebuilt, and that takes time.”

JobKeeper officially concluded on 28 March, with the last payments due in mid-April. ISEAA said agents and English language colleges would be the education businesses in most jeopardy because of their reliance on open borders.

“The industry is collapsing,” said board member David Riordan. “Parts of the industry might require some sort of assistance, but the biggest solution to this problem is to start bringing international students back.”

Register to continue

Why register?

  • Registration is free and only takes a moment
  • Once registered, you can read 3 articles a month
  • Sign up for our newsletter
Please Login or Register to read this article.

Related articles


Featured jobs