Australian universities and TAFEs risk over reliance on revenue from international students, according to the auditor's offices for Victoria and New South Wales.
Australian universities and TAFEs risk over reliance on revenue from international students, according to the auditor's offices for Victoria and New South Wales.
The Victorian auditor-general reported the five-year trend in international student fees for Victorian universities showed a 62% increase to $1.3 billion in 2010, and a 118% increase to $126 million in 2010 for TAFE institutions.
"The growth in international student fees heightened the risk for universities and TAFEs arising from the vagaries of the competitive market for such students," the report warned.
Universities receive most of their income from government grants but students fees are a close second. More than 80% of student's fees are from international students, according to the report.
Over-reliance on overseas students for revenue can be a risky strategy. In the report, the Victorian auditor-general said: "The international student market has become volatile as a result of recent social issues, government reforms, the volatility of the Australian dollar, and legislative changes to student visa requirements."
According to statistics released by the Commonwealth Department of Education, Employment and Workplace Relations, there was a 10.9% decrease in international student numbers in January 2011 compared to the same time last year.
The NSW auditor-general, who also released a report into the finances of the state's universities, echoed the concerns.
"Revenue from overseas students has increased 75 per cent in the last five years”, said NSW auditor-general, Peter Achterstraat.
"Overseas students now contribute nearly 20%, or $1.25 billion of total revenue," he added.
The University of New England recorded the highest growth in overseas student enrolments in 2009, increasing by 28.1%. All NSW universities demonstrated upward trends in overseas student numbers, the report showed.
Other concerns raised in the Victorian report related to the amount of untaken leave by academic staff, and in NSW the ageing of the work force was highlighted.
"One quarter of the academics employed by New South Wales universities were aged 55 years or older at 31 December 2010, and 41% were 50 years or older. This is a significant proportion of total academic staff, many of whom are likely to retire within the next 10 to 15 years, potentially resulting in a significant loss of academic skills," the NSW auditor-general said.
Overall, the universities from both states reported a combined operating surplus of $1 billion, leading the auditors to conclude that the financial sustainability risk is low.