Is it OK for international students to pick up Australia’s funding slack for higher education?

The arrival last week of the OECD’s Education at a Glance confirms that Australia has among the lowest public contributions to tertiary education among its member nations.

The 456-page tome points, once again, to the unavoidable fact that Australians pay more for their tertiary education than the vast majority of countries and the government pays less.

To put it in perspective, Australia rates among the bottom four countries at 0.7 percent of GDP in its public investment in tertiary education, or about 40 percent less than the OECD average of 1.1 percent.

Public investment in tertiary education as a proportion of GDP is far more in Mexico, Estonia and Portugal. As for the Nordic countries, Australia isn’t within spitting distance.

Shockingly, even the US, home to $US1.4 trillion (A$1.75tr) in outstanding student debt, has a higher level of public investment in tertiary education than Australia.

It’s an interesting point as we, and pretty well every other country in the OECD, look to the education system to be the bedrock of future economies.

It is one of the underpinning philosophies as to why in recent years the proportion of young people with a degree has risen to 38 percent across the OECD. All the evidence points to the fact that graduates will be more capable of negotiating an uncertain, digitally transformed and geopolitically challenged future.

As the OECD notes: “Tertiary graduation rates illustrate a country’s capacity to provide future workers with advanced and specialised knowledge and skills. Incentives to earn a tertiary degree, including higher salaries and better employment prospects, remain strong across OECD countries.”

But (there is always a but), the OECD reveals that Australia’s graduation patterns are heavily influenced by the 25 per cent of our student cohort who come here to study from overseas.

While Australia has among the highest levels of post-school qualification completion in the world – 70 per cent of people aged 25-34 can be expected to graduate from a university, TAFE or private college – that figures drops by 31 per cent when internationals are taken out of the equation.

International students also artificially inflate our attainment rates in postgraduate and doctoral programs. Across the OECD, 26 per cent of students who attained a PhD did so while studying in another country. It’s the same here and much higher in STEM subjects (science, technology, engineering and maths) into which international students tend to congregate.

Australia hosted 554,100 international students in 2016. We need to remember that not only do they inflate our education credentials, they also cross subsidise domestic students and our research efforts to a significant degree.

So one of the fundamental reasons why public expenditure on tertiary education is so low — international students pick up the slack.

We just need to ask whether this is either ethical or sustainable.


One thought on “Is it OK for international students to pick up Australia’s funding slack for higher education?

  1. International fee paying students were encouraged by govt. policy in the ’80s to make the system financially ‘sustainable’?

    The data showed and still does, due to ageing increasing numbers of retirees need to be supported by govt. budgets for pensions and health care with a proportionally lower number of local taxpayers in the workforce. Accordingly, govt. has less wriggle room on funding universities while balancing the interests and needs of above median age voter.

    The risk for universities may well be small institute or higher education colleges which can be more flexible, responsive and high quality, without legacy costs or broad course provision.

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