International students pay premium fees in Australia

23 September, 2015

International students contribute over two-thirds of Australia’s public university fee income and pay up to twice as much as domestic students in some academic disciplines, according to a recent report.

Proportion of international students in Australia enrolled in each quartile of courses, from lowest fee courses to highest fee courses, 2013. Source - Grattan Institute, University fees: what students pay in deregulated markets.

The University fees: what students pay in deregulated markets report, produced by independent think tank the Grattan Institute, found that, on average, Australian universities charge international students 50 per cent more than domestic fee-paying students.

At undergraduate level in 2014, annual fees for international students ranged from a minimum of AUS$16,000 to a high of AUS$38,000 depending on the subject, with median fees between AUS$21,000 and AUS$28,000.

International students were predominantly found in the most expensive quartile of courses in most academic disciplines. In agriculture programmes, 69 per cent of international students were in the most expensive quartile, while over half of overseas students in science and engineering were in the highest-fee courses.

The report outlines that fees for international students have increased at an average growth rate of between four and five per cent per annum over the last four years. However, the authors noted, “While the fees charged to international students are going up, their effect on these students is more complex. For some international students, the declining value of the Australian dollar has made Australian degrees cheaper.”

The average variation of fees compared with Australian domestic students in Commonwealth supported places (CSP) funding was 50 per cent across all subjects. However, while variation in science and engineering programmes was minimal, the difference rose to around 100 per cent for law and commerce.

The study found that commerce was overwhelmingly the most popular subject choice for international students at undergraduate level in 2013.

“The lack of international price competition around relatively low-cost subjects allows the large gap between CSP funding rates and median Australian fee levels for international students observed for law, commerce and arts,” said the authors.

In the postgraduate market, where most domestic students are also privately funded, the authors found that for the overwhelming majority of courses, “international students pay significantly more than domestic students”.

International students paid a 46 per cent premium for nursing programmes, which are likely to have lower fees for domestic students for social mission reasons according to the authors, but the average fees for arts, creative arts, education and science at postgraduate level were also over 25 per cent higher for internationals.

Again at postgraduate level, the highest proportion of international students was enrolled in the most expensive quartile of courses – over 40 per cent for the most popular programmes: engineering, society and culture, and commerce.

“University prestige explains some of these fee differences. More than 90 per cent of international students in Australia cite university reputation as a factor in their choice,” said the authors. In contrast, Australian employers are not highly influenced by prestige of rankings, meaning domestic students are less inclined towards the most expensive courses, they argued.

In total Australian universities earned AUS$6 billion directly from fee-paying students in 2013, of which AUS$4.3 billion came from international students. Direct fee income represented 22 per cent of all university income in 2013, compared with just eight per cent in 1995.

The fee income from international students is likely to have increased in 2014 after a record year of commencements in the university sector.

The full report is available on the Grattan Institute website.

At the time of writing, AUS$1 = US$0.72

Matthew Knott
News Editor


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