Australian international higher education is facing a crisis as visa approval rates plummeted in 2024, affecting institutions and potential students. The higher education sector faces the gloomy uncertainty of a cap to be introduced on international student enrollments. The Australian government has urged higher education institutions to set up more offshore delivery. However, the business-as-usual approach is no longer effective or desirable. Institutions need to rethink their value proposition of transnational higher education.

Australian education providers, including universities, enrolling international students are categorized into different levels of risk by the Department of Home Affairs, where “risk” refers to the likelihood of accepting nongenuine students based on historical data. The recent high rejection rate of international student visa applications has seen Australian international higher education facing a crisis with news on student visa rejections and universities withdrawing offers to sustain their risk ratings. A “high-risk” provider would find a much delayed processing time in their international visa applications. Many providers affected are concurrently seeking diversification by turning toward other perceived lower-risk markets to fill up the financial gaps from their impacted onshore international student enrollments. Others are beginning to turn their effort to expanding their transnational higher education (TNE) potential. While much of the media coverage and advocacy of this recent visa approval saga has been on financial impact, it is quite important for the discussions to dive deeper into the fundamental value of a degree.

International Education Should Not Be All About Economic Returns

Many have criticized the quality of Australian international higher education, where those who pay get to study onshore, or the abuse of international student visas as substitutes for work visas. Yet, research has shown that, in general, education promotes individual well-being and benefits society at large. Should a cap be introduced, the ripple and long-tail effects for Australia of this loss of international student numbers goes beyond the financial implications. As an isolated “island” on the world map, international students, onshore and offshore, provide Australia with an opportunity to establish better mutual understanding between people and promote soft diplomacy.

As the onshore market gets tougher, offshore delivery of Australian degrees, better known as transnational higher education (TNE), has started to receive more attention. TNE is a much smaller sector of the international component of the Australian higher education industry. As a much-neglected part of international higher education, Australian TNE has always been positioned as a revenue-driving business undertaking for universities. Despite being one of the earliest adopters of TNE, in 2022, Australia only registered around 170,000 students undertaking Australian degree programs under some form of cross-border arrangement—a much lower number compared to its onshore international student enrollment (more than 600,000 in 2022, according to the Department of Education). As the number of onshore international students is likely to plunge in 2024, can TNE fill this enormous gap facing the Australian higher education sector?

A review of the current top five importing nations of Australian higher education reveals that most are facing a weakening economy (inflation or deflation) at the beginning of 2024. Three out of the five importing nations registered a drop in offshore student enrollments year-on-year, except for India and Vietnam. Compounded with the increasingly difficult economic conditions, Australia’s relationships with key importing countries can be volatile as geopolitical tension intensifies due to political ideology threatening the free flow of people and knowledge. For example, the relationship between Australia and China has been on a swinging yo-yo over the last few years, making it difficult to collaborate on several fronts, i.e., in research areas perceived as sensitive, such as in artificial intelligence.

Where to from Here

Given the need for universities to divert offshore, now could be the time for universities to rethink how they can position their transnational strategies. The sector cannot assume a business-as-usual approach in the twenty-first century. New ways of designing TNE are needed and could include the following ideas.

Widening the opportunities of potential partner countries. If the traditional focus of TNE has been on economic returns and pipelines for onshore, universities could now use this opportunity to seek new cross-border markets that are less common to avoid crowding in the same market. In particular, universities could seek offshore opportunities in places such as Taiwan and Thailand, where there has been an increase in students coming to Australia (albeit smaller in scale) in the last five years. The recent uncertainty propelled by the possible caps of onshore international enrollments has led to a sudden increase in market scoping activities in less popular markets, such as the Philippines.

Contributing to the access of higher education for the academically disadvantaged. For those willing to contribute more to increase access to higher education, genuine vocational graduates from several countries could help provide green fields for TNE. Due to the limits of local public universities or other localized reasons, many slower academic program developers fall through the cracks for a chance to pursue higher education. For example, the less academically inclined graduates of the Institute of Technical (ITS) Singapore continue learning throughout their adult lives. The Australian higher education system built with successful alternative entry points presents opportunities for this group of students without compromising the quality of the degrees.

Delivering programs in another language. Australia is one of the earliest and biggest exporters of TNE. The sector has built up a lot of knowledge on how to deliver to offshore students in partnerships with local institutions in other countries where regulatory regimes are different from Australia’s. However, most transnational degrees are offered in English. As universities mature in their quality assurance mechanisms for third-party arrangements and academic governance, it could be high time to consider the expansion of Australian degrees delivered in another language as an extension of Australian transnational higher education. Countries such as Japan and South Korea are markets to consider, given that their vast populations speak a language other than English and have a culture of continuous learning. Another possibility is introducing a hybrid (bi- or multilingual) joint degree offered in two or more languages as demand for bilingual working professionals grows.

The Role of Australian Transnational Higher Education

The world has become increasingly volatile economically and politically after the COVID-19 shutdown ended. While Australian transnational higher education has rarely been positioned as a social good, now is the time for universities to consider how to reposition Australian higher education’s value proposition internationally.

Onshore international students pay a higher fee than domestic and cross-border students. However, a university’s physical capacity limits the number of students universities can offer, cap or no cap. While TNE usually asks for lower fees, local partners usually do more teaching, and the world provides a bigger market with fewer capacity issues.

New ways of doing TNE might fill a partial fiscal gap caused by the cap on onshore numbers. However, Australian universities must realize that education cannot simply be a commodity. TNE can contribute to the wider society by providing wider access to education and improving mutual understanding between citizens of different nations. The financial objective of TNE should complement the social license of a university operating in an increasingly polarized world.

Fion Choon Boey Lim is associate professor and associate dean at Charles Sturt University, Sydney, Australia. E-mail: [email protected].

The views expressed are those of the author and do not reflect the position of any institutions the author associates with.