Worst case cost of a lost semester of China enrolments

The impact of the freeze on student arrivals could be red-hot 



The Government’s weekend announcement that foreign nationals (excluding permanent residents) who are in mainland China from Saturday forward, will not be allowed to enter Australia for 14 days  is set to impact Australia’s International education industry.

How much? Treasurer Josh Frydenberg confirmed on ABC’s Insiders program yesterday that Treasury is looking at both low and high impact estimates.

CMM has run some broad-brush numbers looking at commencers in 2019 in February and March as a baseline. For now, the ban is two-weeks, but if it extended to the point where students now in China decided to write off first semester the top-end of losses are:

 Higher Ed is by far the worst with 35, 628 commencers in this period, CMM used $17k as an average semester fee with the total hit to higher ed being $606m.

 VET in 2019 had 2965 commencers, CMM used $10k as an average semester fee with the total hit to VET being $30m

 Schools in 2019 had 293 commencers, CMM used $12k as an average semester fee with the total hit to Schools being $3.5m

The ELICOS sector is harder to predict but with 4975 commencers in this period in 2019 and an indicative cost of $5k being applied, this sector could be set to lose $25m

The Non- award sector had 3583 commencements in this period but isn’t included.

All up, the overall-exposure of institutions via fee payment alone across all sectors could be up to $664m.

Then there is the additional spend that goes along-side fee payments to assist in local economies (rent, groceries, travel, tourism, entertainment).

If each student over a semester long period paid $10,520 (half of annual suggested rate of $21,041) which is a conservative figure, then local communities and service providers are set to lose out on a further $499m.

All in all, the impact could be as high as $1.2bn and this is for commencers alone. Returning students who may have already commenced their study pattern and who may have returned home for Chinese New Year will add to this. They now will also be caught up in this travel ban and perhaps will have to defer studies. It’s anyone’s guess how large this group may be.

Dirk Mulder is CMM’s international education correspondent. Contact him @ [email protected]