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International education services

Commission research paper

This paper was released on 30 April 2015 and focuses on the two key policy levers the Government has at its disposal to influence International Education Services (IES):

  • the visa system
  • regulation aimed at providing quality assurance in the delivery of education to international students.

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  • Key points
  • Media release
  • Contents
  • Infographic
  • International students make a major economic and social contribution to Australia. In 2014, there were over 450 000 international students onshore, representing around 20 per cent of higher education students and 5 per cent of students enrolled in vocational education and training.
    • The international education sector is back on a high-growth trajectory following a major downturn from 2009 to 2011. Students from China and India account for 37 per cent of all international students in Australia.
  • In parallel with rapidly growing demand for international education, principally from middle-income economies in Asia, competition for international students is intensifying among traditional provider countries and new entrants. While Australia's share of the international student market is only around 6 per cent, it has one of the highest concentrations of international students in total national tertiary enrolments.
  • Whether Australia remains an attractive destination will depend on how well education providers respond to students' expectations for their learning experience and provide a value proposition as technology and business models evolve.
  • The Australian Government has a role in providing a policy and regulatory framework that encourages behaviours by education providers, international students and other stakeholders that support its immigration and education policy objectives, and enables the market for international education services to function well within these policy settings.
    • The sustainability of international education exports is more closely linked to regulatory settings than in many other sectors. Regulatory settings around student visas and education quality are crucial.
    • The lack of a synchronised and coherent strategy for these two interacting policy levers has the potential to undermine the sector's ability to take advantage of the opportunities offered by growth in the global education market.
  • In terms of student visas, the introduction of streamlined visa processing has contributed to a reversal of the downward trend in international student numbers, with the higher education sector as the predominant beneficiary. However, the implementation of this system has introduced a number of perverse incentives that put at risk the quality and reputation of Australia's education systems.
  • The potential broadening of access to streamlined visa processing by a wider spectrum of education providers carries risks to the reputation of Australia's education system.
    • There are several options to mitigate these risks. The preferred option should provide the highest net benefit to Australia as a whole. But they all require a high level of engagement between the Department of Immigration and Border Protection and the Department of Education and Training.
  • In terms of education quality, the enforcement of regulatory settings has moved increasingly to a risk-based approach in recent years. However, the current emphasis on teaching standards should be rebalanced so that learning standards have a greater role in quality assurance.
  • There is also a strong case for publicly available information on the comparative quality ranking of providers in order to assist domestic and international students to make informed decisions about provider choice.
  • Further, Australian institutions should reduce their reliance on agents for student recruitment.

Background information

02 6240 3330

International students make a significant contribution to Australia but there are risks and challenges

Today the Productivity Commission released its research report into International Education Services.

The report finds that the international education sector is now back on a high-growth trajectory following a major downturn from 2009 to 2011.

International students contributed around $17 billion to the Australian economy last year. The international education sector accounts for almost 5 per cent of total Australian exports and over a quarter of our total exports that are classified as services.

'Attracting and retaining good international students is important to Australia's economy,' Productivity Commissioner Paul Lindwall said.

'However, competition for international students is intensifying. If Australia wants to remain an attractive destination we will need education providers to provide learning experiences that respond to students' expectations. Governments, too, need to ensure that our broader immigration and education policy settings also support this objective', said Commissioner Paul Lindwall.

The report finds that the sustainability of international education is more closely linked to regulatory settings than many other sectors. The regulatory settings around the quality of education and around student visas are both crucial to the sustainability of Australia's international education sector.

It is crucial that these two policy levers (education and immigration) are synchronised and coherent so that Australia can best take advantage of opportunities in this sector as sometimes changes in policy in one area can have unintended consequences in the other.

Australian institutions also rely heavily on agents to attract students. Better coordinated risk management by institutions and agencies is essential. While agents will remain an important part of marketing education, institutions should actively reduce their use of agents and rely more on direct recruitment.

'The quality of the education that Australia provides is of course paramount to students deciding whether they wish to study here. It is important that they have reasonable expectations as to the institutions and courses on offer,' said Commissioner Paul Lindwall.

Australia's share of the global international education market is only around 6 per cent but it has one of the highest concentration of international students in total national tertiary enrolments, with around 20 per cent of total students enrolled in higher education coming from overseas.

There were more than 450 000 international students on a student visa in Australia in 2014. Another 160 000 were enrolled in programs delivered by Australian institutions abroad.

  • Preliminaries
    • Cover, Copyright and publication detail, Contents and Acknowledgments.
  • Overview
  • Chapter 1 Introduction
    • 1.1 The international education sector's contribution to the economy
    • 1.2 Snapshot of the international education services sector
    • 1.3 International education policy levers
    • 1.4 The Commission's approach
  • Chapter 2 Trends in international education services
    • 2.1 Global trends in international education services
    • 2.2 Trends in Australian international education services
  • Chapter 3 Student visa policy settings
    • 3.1 The student visa program
    • 3.2 Implications of Streamlined Visa Processing
    • 3.3 Post-study work rights
  • Chapter 4 Quality regulation of international education services
    • 4.1 Regulatory framework for quality assurance
    • 4.2 Risks to quality and how they are being addressed
    • 4.3 Transnational education services
    • 4.4 Measuring the quality of international education services
  • Chapter 5 Student visa processing alternatives
    • 5.1 Summary of the current problems
    • 5.2 DIBP's proposed model
    • 5.3 Alternative approaches
  • Chapter 6 Education agents
    • 6.1 Education agents in international student recruitment
    • 6.2 Institutional arrangements around agents
    • 6.3 Concerns with agent behaviour
    • 6.4 Risks arise from the incentives faced by agents and providers
    • 6.5 Mitigating agent risk
  • Appendix A Conduct of the project
  • References

Download this infographic

International Education in Australia infographic. Text follows this image.

International Education in Australia

Did you know?

International education services contributed $17 Billion to the Australian economy in 2014 and represented close to 5% of total Australian exports.

But there are risks and challenges:

  1. International competition
  2. Quality of education
  3. Over reliance on agents
  4. New technologies

Where are Australian international students from?

Australia's top 10 source countries, 2014

Three quarters are from Asia.

  • Nepal 3%
  • China 26%
  • South Korea 5%
  • Vietnam 5%
  • Brazil 4%
  • Pakistan 2.5%
  • India 11%
  • Thailand 4%
  • Indonesia 3%
  • Malaysia 4%

How does Australia compare?

Australia, with a market share of 6 per cent, is one of the four leading English-speaking destination countries for the provision of international education services. Although Australia may not have the highest number of international students, we have one of the highest concentrations of international students in total national tertiary enrolments.

Country Number of international student tertiary enrolments (2012) Proportion of total tertiary enrolments (2012)
Australia 249 588 18%
United Kingdom 427 686 17%
Canada 120 960 7%
United States 740 482 4%

Read more detail in the paper.

Printed copies

Printed copies of this report can be purchased from Canprint Communications.

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