Universities and education providers are witnessing significant growth following a period of sustained decline in international student enrolments and revenue losses due to the COVID-19 pandemic. Substantial growth has been observed from the subcontinent region providing welcome relief to Australian universities. In 2022, students from India and Nepal were responsible for 156 586 student enrolments at Australian education providers. Forecasts indicate continued growth in 2023 and 2024. The UK is reviewing its policies towards post study works rights; many industry insiders expect a dramatic decline in UK international student numbers should policies be announced that restrict opportunities for students once they graduate. The proposed changes would benefit the Australian education market. However, Chinese student numbers are yet to recover following continued political instability and COVID-19.

Students from the subcontinent market are enticed by the high quality of education Australian universities provide and the employment and migration opportunities available following course completion. During the COVID-19 pandemic, many institutions focussed their attention on onshore international student recruitment. The onshore market is dominated by price sensitive students demanding education institutions provide generous scholarships.  Consequently, student attrition rates amongst international students has become a major concern for universities.

Universities located within metropolitan cities have been hit hard in recent years. The Commonwealth Government data published recently show two universities (Southern Cross University and Federation University) with attrition rates above 30 per cent at the undergraduate level and an additional two universities (Charles Sturt University and Central Queensland University) with a 57-61 per cent  attrition rates on comparable qualification level. Several universities operate a franchise model whereby third-party (private) companies manage university campuses in Australia’s large metropolitan cities. Estimates suggest the revenue loss associated with provider switching at the undergraduate level costs Australian universities $38m dollars annually.  These figures increase to $60m plus when postgraduate numbers are included per annum.

The latest trends suggest an alarming number of education agents and students are selecting Assessment Level (AL) 1 providers and Go8 universities to bypass the financial documentation required at AL2 & AL3 providers. The government allows AL1 providers to submit fewer documents during the visa filing stage and in most cases visa outcomes are received much sooner and with a higher visa grant rate. Assessment levels are the means by which the Australian government can measure the risk a student possess from an immigration perspective and how well a university performs when recruiting offshore international students. Several factors are used to quantify an individual risk, these include the nationality and location of the student when applying for a student visa and the current assessment level of the institution they have selected.

 International education providers in Australia are governed by the ESOS Act and National Code. The legislation allows international students to switch their course and education provider after completing six months at their primary provider. The legislation, which is widely considered counterproductive by Australian universities, has led many undergraduate and postgraduate students to switch to cheaper providers and study lower level courses such as Certificate III and Diploma programs. Many of these courses are managed by private RTO’s and VET colleges with a minority being owned and operated by education agents themselves. The “recycling” of students by education agents is well known and organised prior to the student arriving onshore. Education agents are motivated by the financial benefits associated with switching education providers. An initial commission will be paid by the primary provider, followed by subsequent payments by onshore VET colleges and private providers once a student changes their course and study location.

In recent years Australia welcomed a significant number of international students studying vocational courses such as commercial cookery and hair dressing. Offshore recruitment for these programs is limited; however, students changing providers and selecting courses based on the requirements published by the Australian governments Skilled Occupation List is commonplace.  A recent study in the UK demonstrated 25 per cent of students were considering switching to another education provider as the cost of living and studying continues to rise. Evidence from the USA reflects the sentiment felt elsewhere with students abandoning their primary provider for more affordable  institutions.

It is crucial the Australian Universities Accord review the loopholes that exist in the current ESOS Act which promote provider switching and the recruitment of non-genuine students to Australian universities.

To combat this trend, Australian universities employ transition, retention, and engagement teams to improve engagement and retention of students. However, once a student arrives onshore, much of the decision-making and efforts related to student retention is beyond the control of universities. Australian universities continue to advocate for international students to remain at their principal provider for at least 12-months.  Careful monitoring and performance management of education agents is crucial while the sector continues to expand.

Mahsood Shah is a professor and dean at Swinburne University of Technology, Sydney.

James Collins is a senior business development manager based in India, Education Centre Australia

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