22 Mar 2015

Insight for 22 March 2015 - Overseas Students - Boom or Bubble?

From Insight, 8:12 am on 22 March 2015

Risks and Rewards in Overseas Student Growth

Foreign student numbers are on the rise, but an Insight investigation has found it's putting strains on the education system.

International students at Unitec in Auckland

International students at Unitec in Auckland Photo: RNZ / John Gerritsen

Listen to Insight: Overseas Students - Boom or Bubble?

Avina Gonsalves says cricket and the Lord of the Rings movies influenced her decision to study in New Zealand. Jhalak Sharma came in search of work-life balance. And Gunjeet Kaur chose New Zealand because there are no snakes. She is only half joking.

They have come to New Zealand from India and are part of a new boom in international student enrolments that is adding hundreds of millions of dollars to New Zealand's economy.

In the first eight months of last year, the number of foreign students jumped 12 percent on the back of a 60 percent leap in the number of Indian students. Their annual spending reached an estimated $2.8 billion and the sector is New Zealand's fifth largest export earner.

It is all good news for the Government's goal of growing the annual value of international students to $5 billion by 2025 and for the institutions that enrol them.

Overseas students are certainly an attractive proposition. Depending on what they study, their fees can be about double what a tertiary institution gets in fees and government subsidies for a domestic student in the same courses.

Grant McPherson, Chief Executive of Education New Zealand.

Grant McPherson, Chief Executive of Education New Zealand. Photo: RNZ / John Gerritsen

The University of Auckland, for example, charges $30,000 a year for foreign students studying commerce or science and $26,000 for those working toward a Bachelor of Arts.

Grant McPherson is the chief executive of Education New Zealand, the organisation charged with promoting New Zealand as an education destination.

He says the 2025 goal will require about $40,000 more international students.

"Just about all of the modelling that we've done in terms of student attraction, you're looking at around 140,000 students in New Zealand and that's quite consistent to the peak of about 10 to 15 years ago, which was up around the 120-130,000."

Grant McPherson says China is New Zealand's biggest source of students - it provides more than a quarter of New Zealand's overseas students and nearly a third of last year's estimated $2.8 billion spend - but changing demographics mean that by 2025 it will have fewer young people, and New Zealand will need to look to countries like Indonesia and Vietnam for international students.

Unitec's international student office

Unitec's international student office Photo: RNZ / John Gerritsen

But the president of the Tertiary Education Union, Sandra Grey, says teaching foreign students is not always straight forward.

She says overseas students add to staff workloads and the union is not happy with attempts to shape courses to suit foreign students. Some institutions are offering one-year master's degrees, and others have compressed teaching to a few days a month or on weekends in order to accommodate students' supposedly part-time work.

"This is where the market is driving teaching and learning, rather than the teaching and learning being the core thing we think about when we set up curriculum, set up lectures, set up courses."

Right to Work

A significant drawcard for many students is the right work in New Zealand during and after their studies, and the possibility of gaining permanent residence.

The chairperson of language school association English New Zealand, Darren Conway, says some institutions are blurring the lines between study, work and immigration, and are essentially offering all three as a package for foreign students.

Managing Director of Languages International Darren Conway

Managing Director of Languages International Darren Conway Photo: RNZ / John Gerritsen

He says they should not be trying to attract students with the promise of work and residence because they cannot guarantee either.

But other tertiary education leaders say the right to work and the possibility of residence are essential if New Zealand is to compete with other countries for international enrolments.

And Education New Zealand's Grant McPherson denies the rapid rise in applications from India and the high number of declined applications (38 percent compared to just 4 percent for China) are signs of an unsustainable bubble.

"If you look around the world, we're not the only ones that have had such a massive increase in the number of Indian students that are coming through," he says.

"Where there's a higher number of declines, I think that's showing the system is working, that it's not just about anybody can rock up and get a visa to come here. There is actually quite a strong process to make sure that they're bona fide, they're coming here for the right reasons around their education development, that it's not just open slather."

Grant McPherson and others in the education sector say increasing competition from other countries, and improving education systems in source countries are threats to New Zealand's goals for international education.

But the international director at Mount Albert Grammar School Evan Gray warns there are also threats from within New Zealand.

The international director at Mount Albert Grammar School, Evan Gray

The international director at Mount Albert Grammar School, Evan Gray Photo: RNZ / John Gerritsen

He says assaults on Indian students in Australia cost that country many thousands of enrolments, and similar problems could emerge if New Zealanders believe they are competing with foreign students for jobs and accommodation.  

"We've seen that happen in Australia, there is a possibility of that happening in New Zealand and unless we manage that very carefully, it's certainly a possibility."

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