The ACT university sector could lose up to $250 million over the next three years as coronavirus travel bans keep international students at home.
The Australian Investment in Education: Higher Education report from the Mitchell Institute at Victoria University found $85 million in annual tuition fees would be wiped from ACT universities with international students unable to begin study mid-year and projected the territory's broader economy to lose more than $900 million.
"This other activity comes in the form of money spent in the wider economy and also fees paid by students enrolled at vocational education and training providers and at English-language schools," the report stated.
The report found universities nationwide had seen a 137 per cent growth in international student revenue in the past decade. Those fees accounted for almost half of the Australian National University's student revenue and 25 per cent for the University of Canberra.
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Author Peter Hurley expected domestic demand for university to increase but said limits on funding allocations needed to be re-examined.
He said while international student numbers had risen dramatically, caps on domestic funding meant revenue and participation rates of Australian students had been static.
"It is likely that demand from domestic students for university places students will rise because of workers looking to reskill and upskill during the uncertain economic conditions," he said.
"A quarter of school-leavers usually take a gap year to work or travel. With those plans off the agenda - these, too, may be looking to study. However, universities are currently unable to respond fully to any changes in demand due to caps on places.
"Increasing capacity in the tertiary sector by removing the caps on university places would provide both an opportunity for Australians with few job prospects to build their skills in preparation for the economic recovery, along with helping universities to offset this unprecedented drop in revenue from international students."
Education minister Dan Tehan announced this week the federal government would guarantee $18 billion of funding to universities this year, even if their domestic enrolments drop, and provide $100m of regulatory fee relief to the tertiary education sector, including private vocational education and training.
The full extent of the damage to universities lies in how long travel bans are in place.
A model that sees international student numbers return to 2019 levels in 2023 forecasts a $10 billion loss to the sector nationally. However, if travel bans were to continue into 2021, projecting enrolments at 50 per cent of 2019 figures in three years, losses are forecast to be $19 billion.
The report stated international students had become "vital to the financial health of universities" but even if that revenue was at levels seen 10 years ago, the impact would be devastating.
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