Reliance on overseas students played only a minor role in Australian universities¡¯ financial fortunes during the turbulent first year of the pandemic, a new study has confirmed.

An analysis of 37 publicly funded universities¡¯ 2020 accounts has found that the institutions which ended the year in best shape had only modest exposure to international education revenue. But so did most of those that sustained the biggest losses.

The Melbourne Centre for the Study of ÖйúAƬ??shows that institutions with overseas student earnings of about A$1 billion (?532 million) suffered only modest financial reversals, in both proportional and absolute terms. ¡°Group of Eight universities appear to be ¡®in the pack¡¯ rather than out in front in terms of financial impact,¡± says the report, by Frank Larkins and Ian Marshman.

¡°Of those universities which appear to have experienced the greatest decline¡­only a limited number are [particularly] exposed to the international student market. Other factors such as institutional strategy, leadership and nimbleness in risk management all made a significant contribution to¡­financial well-being.¡±

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But international education losses may come to the fore as lockdowns and border closures continue, the report warns, as the ¡°financial challenges¡± escalate this year.

¡°Incomes from student fees and charges are expected to be lower and staff termination costs higher for many universities in 2021, [which] is now likely to be the proving ground for the strategies and pandemic responses each university has adopted ¨C whether explicitly or implicitly ¨C in the first year of the pandemic.¡±

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The report says that lost income due to the pandemic proved much lower than most analysts ¨C including the authors themselves ¨C had predicted, with universities reaping A$1.8 billion less than in 2019. The sector collectively spent just A$100 million or 0.3 per cent less than in the previous year, with 19 of the 37 universities increasing their outlays.

Fourteen universities registered deficits in 2020, up from just three in 2019. But 23 institutions still managed to record surpluses, with eight improving on their 2019 results.

The analysis offers some hope that the unexpectedly buoyant 2020 results could be repeated in 2021, with rising redundancy costs and plunging fee revenue likely to be ¡°partly counterbalanced¡± by a recovery in investment income.

State by state, South Australia weathered the first year of the crisis most successfully. Its public universities collectively increased their income by 0.3 per cent and all three institutions notched modest surpluses.

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But Western Australian universities¡¯ 7 per cent decline in earnings ¨C the highest of any state ¨C was ¡°anomalous¡±, given the ¡°relatively limited exposure to the international student market and little direct impact of the pandemic¡±.

john.ross@timeshighereducation.com