Trying times for tertiary education

Education is one of Australia’s largest exports, bringing around $32.4 billion of revenue annually into the country. Over time, the consistent rise of international student enrolments, particularly in tertiary education, has served as a steady and flowing income source.

However, with a pandemic that has forced international border closures as well as coming off a two year government funding freeze, universities are under pressure to make quick but significant adjustments in order to survive. These changes will definitely create waves that will affect students finishing their last years of high school.

Challenges faced by universities

Closure of international borders

With border closures that have been in place for most of 2020, Australian universities have lost a key component of their income, international student fees. Due to the drop in revenue, universities are estimated to lose at least $6.4 billion in research funding over the next five years.

The after-math of the government funding freeze

Universities are still reeling from the two-year freeze on government funding which only finished at the end of last year. Due to the heavy impacts of COVID-19, the effects of the freeze have amplified substantially. Even the government’s latest decision to inject $1 billion towards university research funding has been deemed by many across the industry as nowhere near enough to make a dent in the amount of funds lost.

Dealing with new demand for domestic enrolments

On top of having to deal with lost overseas demand, universities are struggling to manage the surge in demand for domestic enrolments with more young people applying this year . Approximately 43,000 have already applied for early offers, almost a 10% increase from last year. The potential increase in this revenue stream is still not enough to substitute international student fees. Without an adequate amount of funds, universities are starting to make the tough call to turn away domestic students as they are unable to provide them with the resources needed for their studies.

Universities’ response and how this may impact future uni students

A lot of media coverage has been placed on universities’ cost cutting strategy to reduce their workforce, with 12,000 job cuts so far this year. However, many more decisions are having to be made across the industry that will have a direct impact on students planning to enter university in the coming years.

Slashing of university courses

Some schools are responding to lost revenue by cuts to the number of courses they will be offering. For example, Macquarie University has flagged at least 30 courses in the science and engineering faculties to be discontinued alongside more than 30 specialisations and majors.

This evidently can alter a student’s decision on what degree they want to take if their first choice is part of the cull. It can also play a big part in choosing what university a student can attend if they are seeking for a particular specialisation.

Enrolment cuts and increasing ATAR cut-offs

In NSW alone, almost double the number of Year 12 students have applied for university from last year. However, as universities enter survival mode and bring down cost levels as much as possible there is a subsequent compromise in the resources to cater for their students. Kim Paino, the head of marketing and engagement at the University Admissions Centre summarised this ripple effect simply, “if you have increased demand and no increase in supply, then the entry rank will go up”.

Limited course spots and a higher ATAR cut-off can throw a curve-ball for many Year 12 students. If a student doesn’t meet the required ATAR, it can change the course of their university journey from choosing to take a bridging course to attending a different university with a lower entry threshold or changing degrees all together.

Tertiary education is one of the many industries that have been hit hard by the pandemic. The consequences of COVID-19 this year will create headwinds for both universities and their prospective students that are expected to last for the foreseeable future.

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