Predicting the Impact of COVID-19 on Australian Universities

Arran Thatcher,Gang Liang,Anthony Chau,Mona Zhang,Hayden Todoroski,Joanna Wang

doi:10.3390/jrfm13090188

Abstract

This article explores the impact of the novel coronavirus (COVID-19) upon Australia’s education industry with a particular focus on universities. With the high dependence that the revenue structures of Australian universities have on international student tuition fees, they are particularly prone to the economic challenges presented by COVID-19. As such, this study considers the impact to total Australian university revenue and employment caused by the significant decline in the number of international students continuing their studies in Australia during the current pandemic. We use a linear regression model calculated from data published by the Australian Government’s Department of Education, Skills, and Employment (DESE) to predict the impact of COVID-19 on total Australian university revenue, the number of international student enrolments in Australian universities, and the number of full-time equivalent (FTE) positions at Australian universities. Our results have implications for both policy makers and university decision makers, who should consider the need for revenue diversification in order to reduce the risk exposure of Australian universities.

Highlights

The tertiary sector of Australia’s education industry has been forced to rapidly respond to the outbreak of the novel coronavirus (COVID-19), which in turn has exposed it to new financial risks and its over-dependence on international markets
This study aims to assess the changes caused by COVID-19 to total Australian university revenue, international student enrolments in Australian universities, and the number of full-time equivalent (FTE) positions provided by Australian universities
The greatest change in enrolments occurs at two times of the year; at the beginning between the months of January and March, and in the middle between the months of June and July. This is due to the fact that these are the months that immediately precede the beginning of the two core academic semesters for undergraduate students in Australia; current 2020 start dates for the autumn semester range from the end of February through to March, whilst start dates for the spring semester range from the beginning of June through to August depending on the academic institution (Universities Australia 2020b)

Summary

Introduction

The tertiary sector of Australia’s education industry has been forced to rapidly respond to the outbreak of the novel coronavirus (COVID-19), which in turn has exposed it to new financial risks and its over-dependence on international markets. Australian universities in particular are dealing with the prospect of losing up to $19 billion in revenue by 2023 as a result of their reliance on tuition fees from international students, many of whom are currently unable to travel to Australia (Hurley and Dyke 2020). This is reflected in the way that the number of international student enrolments has decreased from 4,608,520 in 2019 to just 708,671 in May, 2020 (DESE 2020b). Universities are key to both Australia’s current and future economic fortunes and in this way warrants the need for extensive investigation into the potential impacts of COVID-19

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Conclusion