The notion expressed by some Vice-Chancellors in the press – that caps would force a redistribution of students away from the cities into outer metropolitan and regional areas – is unlikely to be borne out, either. Recent Studyportals data found that 57 percent of prospective students who are currently considering GO8 universities would look abroad in the event that they are unable to enrol in those schools. Only 16.5 percent are considering other Australian metropolitan universities, while a mere 8.3 per cent are considering alternatives in regional areas. It is the reputation of our institutions, not the prospect of coming to Australia in general, that is most attractive to prospective students.
It is hard not to feel that a lot of this was predictable. While Studyportals is underrepresented in China, the Chinese story remains relevant and telling. After largely fuelling the boom in international enrolments over the past 15 to 20 years, Chinese demand has increasingly plateaued as prospective students focus their attention on the highest-ranking universities worldwide, and as their own domestic institutions have risen considerably in quality. The notion that such students would be interested in coming to Australia to attend non-GO8 universities was never particularly realistic. The perception of the caps as anti-immigration is unlikely to have helped much, either.
But these figures were predictable for another reason, too: we’ve seen all this before, and recently. As my Canadian colleague Matt Durnin pointed out at the Financial Review Higher Education Summit in August, the Canadian government’s student caps, which were introduced earlier this year, have seen enrolments plummet as students look elsewhere. He said that most of the Canadian universities he works with are likely to fall 30 per cent short of their caps because of the damage that’s been done to the market and to the reputation of Canadian higher education.
This is, and should be, deeply troubling to anyone who cares about Australian universities. Revenues are going to be hit hard even if they are able to fulfill their caps. Falling short of them, as in the Canadian example, would be deeply damaging. Staff cuts, the discontinuation of courses, and downsizing, are all distinct possibilities.
Universities looking to avoid such eventualities now face the challenge of optimising the spread of students within the caps they’ve been given. For selector institutions, this will require doubling down on brand promotion, a greater emphasis on enrolments from high-converting segments into high-margin programs, and, potentially, price hikes and a reduction in scholarships and other discounts. For recruiter institutions, it will require targeted marketing at the city level, with an emphasis on parents and other influencers, as well as a tightly managed agent strategy, optimised approaches to scholarships and discounts, and much more rapid application processing. Regional universities seeking to make good on the supposed promise of the caps would do well to study their real competition.
All of this, too, will take precious time and resources. It is not perhaps the kind of thing on which universities would like to be focusing their efforts, nor indeed the methods they would like to be putting into practice the better to stay afloat. But the caps, however misguided as policy, appear for the moment to be here to stay, and the alternative to drastic measures – losing the income stream that bankrolls research and teaching, the very things upon which Australia’s education export industry has been built – is frankly not an option.
