International caps appear almost inevitable, and if they are not imposed, Ministerial Direction 107 and the bad press about Australia’s wish to reduce international student numbers will squash opportunities for revenue growth through international enrolments.
Given that Australia already charges some of the highest fees in the world for degrees (albeit discounted through scholarships and subsidies behind the scenes), there isn’t a lot of opportunity for increasing revenue by charging more per degree, without pricing many families out of the market.
Consequently, Universities Australia has estimated that international caps could cost the sector $4.3b and 14,000 to 22,500 jobs.
Universities have operated on a standardised business model for so long it appears that there has been little latitude to consider opportunities to build revenue outside of the international student recruitment model, so before you repair to the strategy cloisters with the razor gang, here are five ways that revenue could partially recover or grow even while caps are imposed, for discussion (deploy the small groups with butchers paper now please, before we interrupt progress on the future of our institution with the mandatory morning tea break).
- Retention. People typically describe the journey to recruiting a student in terms of a funnel, but in reality, that funnel is just decanting into a leaky bucket. If you can plug part of leak, then you don’t need to recruit as many students through the funnel. The Go8 universities that have been hit hardest by caps unfortunately don’t have much room to move here – Merlin Crossley at UNSW must have some secret sauce as his institution has the lowest attrition of first years in the nation, followed closely by UoM in the latest figures from the Federal Government. However, if you are at CQU and are losing 24.8% of domestic first year students and 67% of internationals (2022 figures), then there are tremendous revenue (and student satisfaction) gains to be had by giving attrition at least as much attention as marketing and recruitment. On average 86.2% of domestic and 84.2% of international students are passing their first year subjects. Bump that average a little higher, retain more students before census, and you are suddenly seeing millions of dollars extra in the coffers. Retention is clearly set to be a new frontier for tertiary focus, particularly if the Accord’s goals and the Government’s Needs-Based Funding proposals are going to be realised. It needs to move beyond the realm of just educators, to include the engagement and analytical savvy of the marketing and comms department to really take off.
- Renting out. HE institutions, in particular universities, are currently criticised for being rich and disconnected, fairly or unfairly. Anyone who drives past a campus after 2pm on a Friday or on a weekend might have a hint as to why. Empty carparks. Closed shops. Windswept walkways. While your EBA might not allow you to teach students en masse after hours, it doesn’t preclude you unlocking the doors for tenants and community groups who could turn your campus from cadaver to creative hub for all those days and nights it isn’t in use, delivering increased revenue and stronger community engagement. Airlines don’t park their planes by the terminal for a long weekend while their pilots take time out to sun themselves by the pool. They find more pilots, pay a couple of cleaners, and get the plane back up in the air again as fast as possible. Obviously you don’t want to run a creche in a cancer lab, but there are plenty of other spaces which could be used by others if groups were allowed in.
- Reinvention. Underneath the veneer of innovation, education institutions are deeply conservative beasts, encumbered by fear of failure and a deep and abiding love of doing things the same way year after year despite logic or best practice. Believe me. I have worked in 24 of them. For example, who in your professional teams are using AI to reduce administrative load and make student enrolment/support/administration easier? Who has heard that their institution is committed to reducing red tape only to find more forms introduced to ‘streamline’ new processes – finding that it only passed workload from one role to another? How much time is spent collectively on expense and workload calculators and processes compared to strategic work in reducing expense and workload?
I haven’t touched on the more obvious additional ways to increase revenue – fixing domestic recruitment, which has been fundamentally broken at many institutions for more than a decade; deconstructing and re-packaging traditional degrees into tailored domestic training; TNE opportunities and continuing to re-shape online delivery. However, as any good strategic planning expert will tell you, there is only so much that you can fit into your institution’s annual two-day commitment to strategic planning. Starting off with the 3 R’s for revenue rehabilitation is a useful beginning and needs to happen way before you reach for the negative Rs (retrenchment / razor gangs).
