A disastrous drop in international demand for Australian universities can happen here, it already has. Gwilym Croucher and Kenneth Moore report on what happened when demand from India less declined than collapsed in 2009.

Between 2009 and 2011 the number of Indians enrolled at Australian universities halved, to 13 000, with annual fee revenue dropping by an estimated $225m. In a new report for the Melbourne Centre for the Study of Higher Education they estimate the slow recovery in numbers “likely meant” universities missed $1.3bn in fees between 2013-2016.

But what should continue a searing memory is now largely lost due to great good fortune. As Indians stopped coming increasing numbers of Chinese students did.

Australia may not be so lucky again. “While it is difficult to predict specifics and timing, it is highly plausible there will be a future shock to the international market. Australia might run afoul of another government such as China, or an Australian policy change may make us much less attractive, such as forcing students to study only in some locations. There might be a global economic downturn on such a scale that the whole international student industry around the globe is affected.”

There is a clear message here for universities that depend on big international enrolments especially if they are concentrated in specific faculties. Croucher and Moore report that between 2009 and 2012 some 25 universities saw a 60-90 per cent decline in Indian students enrolled in management and commerce.

“The 2009 downturn in Indian student enrolments is a good example of how quickly and deeply a decline can affect budgets. For several universities that suffered the largest declines in revenue (above $10 million per year) the reduction in Indian student fee revenue was a significant proportion of their total budget. This analysis suggests a spectrum of vulnerability across the sector, and while there is a general concern, some universities will be more vulnerable than others,” they write.