There was much speculation by higher education commentators and peak bodies such as Universities Australia and the Group of Eight universities in 2020 as to the impact of the COVID-19 pandemic on the enrolment of fee-paying international students and subsequent adverse impacts on university finances.

In a paper published in May 2020 we used a predictive model to estimate the financial impact on Australian universities of overseas student fee income losses from 2020 to 2024. The predictive model was based on Australian university financial performance for 2018, the most up to date information published by the Commonwealth Department of Education. It was estimated that losses could be cumulatively as high as $18bn over five years.

At the time this appeared to be a credible prediction as Universities Australia also nominated a similar outcome with corresponding job losses and a severe impact on the cross-subsidisation of research. The prediction from our model was that $8.4bn of those losses would occur in 2020 and 2021. The actual outcomes for these two years are now available, based upon university annual reports and Commonwealth Department of Education financial publications.

What was not apparent at the time of our earlier analysis was that universities had achieved growth in 2019 fee-paying overseas student revenues of $1 140m over the 2018 result. This growth of 23,000 EFTSL continued the decade-long expansion since 2010 and built greater overall financial capacity to meet challenges created by the pandemic.

For 2020 and 2021 the results were very different. Overseas student EFTSL declined by 29 000 and revenue was $0.76bn less than for 2019. For 2021 there was a further decline of 25 000 EFTSL and 2021 revenue was $0.5bn less than for 2020. Hence, the cumulative loss over the two years, relative to the 2019 base, was $2bn – only one quarter of our and other commentator’s predictions.

Furthermore, a study of the balance sheets of 37 Australian Universities from 2018 to 2021 revealed that collectively universities experienced strong growth during the pandemic years, with total assets increasing by 24 per cent ($19.7bn) and net assets by 18 per cent ($10.6bn).

A summary of domestic and overseas student enrolments and financial parameters for the Australian Universities sector from 2018 to 2021 is presented in the table. An insight into trends during the peak of the COVID pandemic period may be gained from this data.

All Universities 2018 2019 2020 2021 Change 2021-19 % Change
Domestic Students EFTSL 697,709 700,757 717,201 731,507 30,750  


Overseas Students EFTSL 308,094 331,124 301,673 276,883 -54,241 -16.4%
All Student EFTSL 1,005,802 1,031,881 1,018,872 1,008,392 -23,489 -2.3%
Overseas Fee-Paying Income ($’000s)  












Total Revenue ($’000s) $33,741,910 $36,519,249 $34,651,093 $38,892,838 $2,373,589 6.5%
Total Assets ($’ 000s) $82,828,547 $90,409,464 $95,041,409 $103,223,801 $12,814,337 14.2%

* all the metrics presented increased from 2018 to 2019, before any subsequent declines; maintaining a strong trend that was evident throughout the previous decade.

* domestic student enrolments increased each year with the increase from 2019 to 2021 being 30 750 EFTSL (4.4  per cent). There was however a very wide performance range for individual universities – from a decrease of 6.7 per cent for Murdoch U to an increase of 21.9 per cent for Charles Darwin U.

* overseas student enrolments decreased from 2019 to 2021 by 54,241 EFTSL (16.4 per cent),  much less than most commentators predicted. The range for individual universities was quite extreme with CQU decreasing its overseas enrolment by 76.6 per cent, while Uni Sydney notably increased its overseas students EFTSL by 17.9 per cent.

* the net outcome was that from 2019 to 2021 total student enrolments only decreased by 23 489 EFTSL (2.3 per cent). The range for individual universities was nevertheless substantial – a net decrease of 19.7 per cent for Charles Darwin U and an EFTSL increase for Uni Sydney of 10.9 per cent.

* the overseas fee-paying revenue in 2021 was $ 1.25bn (12.6 per cent) less than in 2019 for a cumulative decline of $2bn (20.1 per cent ) over the two years. This figure is well less than the $8.4bn predicted.

* universities collectively compensated for the loss of overseas student income by gains in other income streams, such that total revenue for 2021 was $2.4bn (6.5 per cent) more in 2021 than in 2019.

* sector-wide total assets in 2021 exceeded $100bn and were $12.8bn (14.2 per cent) more than in 2019.

With the benefit of hindsight, it is evident that as a sector Australian universities have been very successful in managing the financial challenges faced during the COVID-19 pandemic crisis from 2019 to 2021. The primary focus on overseas students overlooked the potential for other compensatory revenue-raising streams.

Furthermore, the aggregate sector position masks significant variations at the individual institution level between 2019 and 2021. Uni Sydney increased its revenue by some $791m or 29 per cent and Uni Melbourne by $246m or 9 per cent. By contrast, Federation U and CQU revenues each declined by $83 million or 20 per cent and 17 per cent respectively. Collectively, their 2021 revenues combined were less than Uni Sydney’s revenue growth from 2019 to 2021.

While overseas student revenue did decrease by $1.2bn, Commonwealth Grant Scheme support for domestic students increased by $0.93bn and total Australian Government Grants (AGS) by $2.1bn from 2019 to 2021. The 2021 AGS includes a $1bn special allocation for research. The outcome highlights the level of Australian Government additional financial support at a crucial time.

Universities also benefited by hundreds of millions of dollars from the sale and distribution of IDP shares by Education Australia Limited. This windfall was accounted for in different ways by universities, but the revenue does form part of 2021 assets. In a 2022 paper it was estimated that the 2021 one-off IDP allocation exceeded $4bn at distribution to the sector.

The university sector collectively also benefited by the appreciation of other assets, including revaluation of property, plant and equipment holdings, and investment returns. The significant variation in individual university financial performance over this period is in large part due to the extent universities were able to derive benefit from these uplifts in valuation.

While the results for individual universities are highly variable, the sector-wide financial outcome has enabled most Australian universities to retain their international competitiveness.  It is expected that the 2022 results when available will continue to be strong, but perhaps with limited revenue growth given the special one-off financial factors in 2021. A student growth trajectory for 2023 and beyond is anticipated.

Frank Larkins & Ian Marshman are honorary fellows at Uni Melbourne’s  Centre for the Study of Higher Education


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