More Students, Less Money: Pandemic Exposes Funding Fault Lines

By Justin Hu (he/him)

Has campus seemed busier to you this year? If it has, then it’s not just your imagination. Total tertiary student numbers in New Zealand are up across the board at almost all universities and polytechnics.

It’s good news for universities continuing to recover from COVID-19 layoffs and voluntary redundancies, but the figures are only a silver lining for institutions that have been rocked by the pandemic.

Looking beyond the total figures: while domestic student numbers are up significantly, the number of international students in the country is down by around half as a result of border restrictions and reluctance from students overseas.

The reason why this matters is because of the money which the two groups bring to unis and polytechs. International students are worth roughly double that of domestic students in the fees that they pay as students.

Meanwhile, the fees of domestic students are less despite also including government subsidies allocated by the Tertiary Education Commission (TEC).

That means that despite gaining strength in numbers, many institutions are now worse off financially. Foreign students are also more likely to choose university-affiliated living services like student accommodation, which brings in additional revenue.

In a report to the AUT Council in March, vice-chancellor Derek McCormack said the university was still forecasting a difficult year.

“To date, 2021 international equivalent fulltime students are 750 less than last year and domestic international equivalent fulltime students are 900 more than last year. Having the same amount of work to do but with less money will produce challenges particularly as enrolments are not evenly spread across schools,” said McCormack.

McCormack told Newsroom that domestic students have favoured teaching, science and humanities courses, which are spread out at different faculties, as compared to the normal demand from foreign students.

Analysis by the TEC in 2017 found that the number of domestic students has fallen on average by a third in the last decade. As a result, international students had become a lifeblood for growth in many unis, who heavily relied on their fees prior to COVID-19.

Some universities, like Lincoln, had even reached a point in 2019 where international students made up nearly half (48 percent) of all student enrolments.

The University of Otago was the only uni that limited its international student intake, having set a 15 percent limit, and on the surface has weathered the short-term impact better, having not recommended redundancies or cut any staff.

Seven hundred staff across the eight universities have been laid off or taken on voluntary leave/redundancy as a result of the sector’s financial situations, according to RNZ.

The analysis found that there were 71 job losses at AUT after the university had offered voluntary leaving packages to staff last year. The university has said it will continue cost-saving measures.

Moving forward, the ongoing vaccination programme both at home and abroad will likely result in easing of overseas travel restrictions by some point in the 2022 or 2023 academic year and provide some relief to university recruiters.

However, the chair of Education New Zealand, the government agency tasked with overseeing the recruitment of overseas students, told a parliamentary select committee that it would still take up to 10 years for the industry to recover.

The chair, Steve Maharey, added that the organisation believes that international student growth from some markets had become unsustainable prior to COVID-19 and that the industry would need to become more resilient going forward.

“We are very dependent on a small number of markets, particularly China and India, and that was not a sustainable position for any industry,” Maharey told the education and workforce select committee.