Modelling individual Australian universities resilience in managing overseas student revenue losses from the COVID-19 pandemic
By Ian Marshman and Frank Larkins
The predicted revenue losses of 38 Australian universities to 2024, as a result of the decrease in overseas student revenues linked to the COVID-19 pandemic, are modelled in this study. A 2020 outcome and two longer term scenarios to 2023-2024 are modelled. It is demonstrated that the universities face very serious challenges with varying degrees of financial management risk.
Based on the analyses conducted universities are placed into three categories in accord with the financial management risk challenges that have been identified. Universities are predicted to face either high, medium or low risks over the period from the present to 2024, because of the loss of overseas fee revenue. Other sources of potential revenue loss and other COVID-19 related expenses have not been modelled in the present study.
Seven universities are placed in the highest financial management risk category – Monash, RMIT, University of Technology Sydney, La Trobe, Central Queensland, Southern Cross and Canberra universities. Another 13 universities are assessed to face medium financial management risk. The remaining 18 universities, just under half of the total sector institutions, have been categorised as facing management risks that are of lower severity. The nature of the risk varies according to the relative reliance on international fee revenue and the underlying financial resilience of individual institutions.
The adverse consequences of the COVID-19 pandemic on the university sector are both immediate and can be anticipated to endure for many years. Some strategic policy choices that will need to be made to varying degrees by universities to mitigate predicted losses are discussed. These choices are likely to result in changes to sector-wide operational practices more profound than anything experienced since the establishment of the unified national system in the early 1990s.
Associate Professor Ian Marshman and Professor Emeritus Frank Larkins are Honorary Fellows from the Melbourne Centre for the Study of Higher Education at The University of Melbourne.
Professor Emeritus Frank Larkins