NEW ZEALAND: Foreign students a welcome income source

International student fees became increasingly important to New Zealand universities this decade as they sought to increase their income in the face of government control or regulation of most other forms of their income.

In 2008, the most recent year figures are available, direct government grants accounted for between 40% to 50% of income for most of the eight universities while domestic students provided 14% to 20% and international students 7% to 15%.

Although the foreign student contribution to university finances is down since the boom years of 2003-04, it is one of the few sources of income universities can increase without government intervention. This applies to the amount of the fee charged and the number of students enrolled.

Domestic fees are subject to a fee regulation system that limits annual increases and stops fees from exceeding maximum levels. No such regulations apply to international student fees and university councils generally increase them each year. As well, the government subsidises only a set number of domestic students each year and discourages institutions from exceeding that number by more than 3%. This limit also does not apply to international students.

The ability to make annual increases to international student fees and to increase international their numbers where possible has become particularly important in light of the global recession. This has prompted tight government control of all spending, including the prospect of a NZ$45 million (US$32.3 million) cut in direct government funding to universities next year.

With a few exceptions, international fees are much higher than those charged to domestic students because the foreigners do not attract government subsidies. A New Zealander studying a bachelor of arts degree could expect to pay about $4,000 or more (US$2,900) while an international student would pay about $18,000 (US$13,212) or more.

Even when government subsidies are taken into account, an international student provides more income to a university than a local. In the case of a BA enrolment, the government pays nearly $6,000 per domestic student, making for a combined income of about $10,000 per domestic student - $8,000 less than if the student were from another country.

China accounts for the majority of New Zealand's international students, last year providing 23% of international enrolments across the entire education sector, followed by South Korea with 17% and Japan at 10%.

Saudi Arabia and India have shown strong growth in the past year but are still relatively minor contributors, last year providing about 6% and 9% of the country's international students respectively.

The emphasis on international students as a source of income concerns the New Zealand Union of Students Associations. Co-president David Do says there has been little scrutiny of tuition fees for international students and it is clear that institutions have changed the way they regard them.

"There has been a complete transformation of language and ideology in this area - only 15 years ago international students were called just that and the driving force was delivering overseas aid." Do says. "Now, it is the export education industry, students are clients or units, and the driving force is money."

He says the union's policy on international fees is that students should be charged a fee based on the full cost of their course rather than on competitive positioning. Such positioning currently sees some universities charge more than others for similar courses.

The union is also concerned about the level of pastoral care provided to international students and Do says there have been cases of students being treated badly, particularly in relation to accommodation. Despite the concerns, there have been no high profile cases that threaten to derail New Zealand's export education market and the outlook is for continued growth in the sector.

john.gerritsen@uw-news.com