Australian Education Minister Jason Clare proposed a levy on universities’ income from international student fees to fund research and student housing. The initiative is designed to support an additional 1.8 million tertiary students by 2050. However, leading universities have raised concerns that the levy could deter international enrollments, affecting their global ranking and research culture.
In an effort to cover shortfalls in student housing and research funding, Australia’s Education Minister Jason Clare has proposed a levy on the nearly AUD10 billion ($6.8 billion) in annual income generated by universities from international student fees. This initiative, Clare suggested, could support the expansion of tertiary education for an additional 1.8 million students by 2050.
However, this proposal has been met with opposition from some of Australia’s leading universities, including the University of Sydney, who expressed concerns that such a levy could deter international enrolments, subsequently affecting their international rankings and research culture.
A preliminary report from the first significant review of the university system in a decade and a half released recently criticized the current funding model, pointing out its dependence on unstable revenue streams and lack of transparency. The report also condemned past funding reforms, including fee increases for humanities subjects and reductions for science subjects, as potentially harmful to the future of Australian higher education.
The concept of a levy on international student fees, according to Minister Clare, could generate a fund akin to a sovereign wealth fund to address tertiary education shortfalls. This proposal has caused a split among universities, with the Group of Eight universities, which reap the most income from international student fees, describing it as a tax on successful institutions.
The levy, if imposed, would likely be applied to universities earning above a specified threshold, establishing a shared fund. This fund would likely redirect substantial sums from affluent universities across the sector, including regional institutions.
However, Andrew Norton, a professor of higher education policy at the Australian National University, cautioned against the levy. Norton noted that it could exacerbate the perception of international students as mere revenue sources and could potentially reduce the attractiveness of Australian universities.
Conversely, the vice chancellor of the University of Newcastle, Alex Zelinsky, saw potential benefits for regional universities and called for a continued discussion on the matter.
The Universities Accord panel is now tasked with sparking a conversation about how universities can accommodate the anticipated student increase by 2050. The panel’s report suggested improving language testing and admissions benchmarks for international students and floated the idea of a “universal learning entitlement” for all students to guarantee higher education access. The panel’s final recommendations will be presented at year’s end.
