Simon Marginson Views the Legacy of International Student Fees Abetting a House Resting on Sand. (May 5, 2009)

Simon Marginson is a professor in the Centre for the Study of Higher Education at the University of Melbourne. In an opinion piece in Yesterday's Age he foresees the postponement of the "revolution in tertiary education and research... Most of the recommendations of the Bradley report on higher education and the Cutler report on innovation will be 'postponed'".

Professor Marginson sees the major culprit in the straight jacketing of Australia's tertiary education sector is its increasing dependence for survival on international student fees as a result of continued governmental underfunding.

Since the late 1980s, when there were 25,000 international students, Australian education exports have grown by leaps and bounds. Last year there were 543,898 international students, half in higher education. They generated $15.5 billion in export earnings through tuition fees, accommodation, food, living expenses and entertainment. Education was our third largest export sector in dollar terms, behind only coal and iron ore... What has driven the remarkable growth of education exports is not the fabulous quality of Australian education but its under-funding.

Three things follow from this "structure of financial incentives", as the business management literature calls it. One, universities lose money on every local student and on most of their research. Two, each year the gap between funding and costs gets wider. Three, each year the universities need more non-government revenues to fill the gap.

And the result is a scrambling for more international student dollars. So did you know that "we are the only nation that uses leading research universities to each enrol more than 10,000 fee-paying international students, as happens at Melbourne, Monash and Sydney, to shore up the balance of payments". There's a certain air about the approach not incomparable to the misuse of the financial instruments devised by the Wall Street "quants".

A worrying sign to Professor Marginson are "[r]ecent data from Leiden University in the Netherlands [which] compare university research on the basis of field-normalised citations per research paper. On this measure Australia has no universities in the world's top 100. This is a serious problem".

In short this is no way to either attract or keep our best and brightest.