International students leave $116m hole in uni’s ‘terrific business model’

A regional Queensland university that built its business model around the international student market is suffering huge financial losses as a result of the COVID-19 pandemic that will impact operations for years to come.

Apr 23, 2020, updated Apr 23, 2020
Central Queensland University was hard hit by the loss of international students. (Supplied)

Central Queensland University was hard hit by the loss of international students. (Supplied)

Central Queensland University (CQU) is facing a $116 million shortfall in revenue for 2020, mainly due to its reliance on the international student market.

Vice-Chancellor Professor Nick Klomp said CQU’s strategy to deliver courses via 25 campuses and study sites throughout both regional and metropolitan Australia had allowed it to target underserviced markets.

“It’s a terrific business model, but of course no one could’ve foreshadowed COVID-19,” Klomp said.

“We’ve got to now restructure our business to make sure we don’t just get through this year — which is practically a write-off, financially — but to make sure we’re sustainable in the long-run.”

Rockhampton-headquartered CQU is considering closing its Noosa campus on the Sunshine Coast and learning centres in central Queensland’s Yeppoon and Biloela.

Wages have been cut across all levels of staff, who have also been offered voluntary employment separation, but Professor Klomp foreshadowed the possibility that hundreds of jobs may be have to be shed.

“We need to be thinking about all the areas we can save in capital areas, in indirect costs, but also in salaries as well,” he said.

“Even if we work out how we limp through this year we need to save about $55 million a year from now on.

“We’ve got to make sure we don’t disappear in this crisis.”

CQU has circulated a change management proposal to staff, with an invitation to contribute ideas on how the university can best operate going forward.

Testing times ahead for regional universities

Other regional Queensland universities are currently faring better but preparing for tough times ahead.

University of Southern Queensland (USQ) Vice-Chancellor Professor Geraldine Mackenzie said her institution had only a small cohort of international students and had not been adversely financially impacted just yet.

“We’re not at that stage at the moment. It’s really going to depend on what happens later on in the year,” Mackenzie said.

“It’s all dependant on how things are going with COVID-19, whether some of the restrictions lift, whether people can get back to work.

“So for us, the impact will come later.”

She said the Toowoomba-based university was also geared for online learning before the coronavirus pandemic, so has faced fewer disruptions.

USQ released a $5 million relief package a fortnight ago which included financial and academic measures for students facing hardship.

Townsville-based James Cook University (JCU) has recently released a similar student support package.

While her institution also had limited exposure to the international student market, JCU Vice-Chancellor Professor Sandra Harding was critical of the Federal Government’s failure to include them in its assistance packages.

“We need governments to step up and recognise how important these students are to Australia and to our cultural vitality, as well as to our economics,” Professor Harding said.

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“Other jurisdictions outside of Australia have said to their international students that they’re looking to support them. We know that Australia is seen to be an outlier.”

Harding fears harm has been done to Australia’s reputation as an international education provider which could ultimately impact the nation financially.

“International students who feel they’re not being looked after at a time of their great need may choose not to return,” she said.

“It’s not good business for Australia to not be seen to be supporting international students at this time.”

Tertiary education more than academic to regional prosperity

The Regional Universities Network (RUN), which has three Queensland institutions amongst its membership, has welcomed various elements of the Federal Government’s assistance package.

But executive director Dr Caroline Perkins said more could be done, particularly in supporting international students who have lost their part-time jobs, or providing funding to universities for that lost revenue stream.

“It’s a very difficult time. Few international students were able to make it to Australia for first semester and we’re expecting even lower numbers to start second semester,” Perkins said.

She was hopeful regional universities would survive the pandemic — both for the sake of the institutions and the regions they service.

“Quite often a regional university is [a town’s] major employer, major consumer of services. Staff and students pour a huge amount of money into the economy,” Perkins said.

“If the university is going on hard times then you can expect the community to suffer across the board economically and socially.”

A RUN economic impact study showed its member institutions provide $1.7 billion to the nation’s regional economy.

– ABC / Brendan Mounter

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