Australian universities have spent so lavishly to?recapture overseas enrolments that some make little money from their international operations, which may even be?operating at a?loss.
Consultancy Nous Group said mid- and lower-ranked Australian universities’ expenditure on?agents and discounts had all?but erased profit margins from foreign students, who – in financial terms – are now barely distinguishable from their domestic counterparts.
Compared with other major destinations, Australia recruits almost twice the share of international students through agents and pays commissions that are up to twice as high, Nous said. Many universities also offer “scholarships” of up to 25?per?cent.
These outlays might leave universities with as little as A$17,500 (?8,800) of a A$30,000 tuition fee for a foreign student’s first year, and A$23,750 in year?two.
These estimates exclude universities’ marketing and attrition costs – 13?per cent of overseas university students drop out within a?year, according to Department of?Education .
Nous’ global head of 中国A片, Zac Ashkanasy, said that when acquisition costs reached 50?per cent of the fees, universities were “probably only just breaking even. In?high-infrastructure courses [like] health or engineering…they’re most likely losing money.
“If they’re only just covering their teaching costs, they [will] be struggling to develop sufficient surpluses for future years’ investment…whether it’s better technology [or] building infrastructure, let alone subsidising research.”
Mr Ashkanasy said universities had pursued a “volume-based approach”, sacrificing “margin” to?restore their pre-Covid student flows. This was a “big risk” given government efforts to?stifle student numbers.
He said that regardless of any future international enrolment caps, prospective student interest had plummeted. “I?would be really encouraging universities to think much more carefully about scholarships and agent fees. I?don’t think they need to discount as heavily as they have historically, and they really need to think more carefully about maximising student retention.”
While universities say visa processing changes have denied them billions of?dollars, Nous’ research suggests that their internal practices may be costing them even more dearly. Mr?Ashkanasy said the failure to rein in acquisition costs was particularly acute at master’s level.
“In part, this is because different parts of the university are responsible for it,” he said. “I?might have the scholarships budget, you might have the marketing budget, someone else might have the agent commissions budget – and those things just aren’t being put together.
“That’s part of a broader narrative…around how universities need to improve their financial stewardship. They have tended to invest in the cost side before [getting] visibility of the revenue side.”
Nous research has found that 13 per cent of Australia’s foreign students are recruited directly by institutions, compared with well over 20?per cent in other education destinations. “We’re using direct entry only half as much…as our competitor jurisdictions,” Mr?Ashkanasy said.
This was “ironic”, given that Australian universities were increasingly bypassing state admission centres for domestic recruitment. Universities needed to “think differently” about international recruitment because “a?level of?laziness” had crept?in.
They also needed to respond to student applications much more quickly, ideally within 48?hours. Mr?Ashkanasy told the recent Australian International Education Conference that up to half of international student enquiries went unanswered.
“If you’re not getting your applications turned around within three weeks, you are doubling your in-house admissions costs,” he warned.
后记
Print headline: Campaign costs ‘all but erase’ enrolment gains
