The Higher Education Chronicle

 By Janaki Kremmer

Australia has long been a destination for Asian university students. But increased competition from American institutions, as well as economic and cultural challenges, demand that the country's higher-education officials rethink their approach to recruiting people from China, India, and elsewhere in Asia, warns Sean Gallagher, a U.S.-studies expert at the University of Sydney.

Mr. Gallagher is writing a book on how higher education will change in the future and recently traveled to America to speak with current and former leaders of major universities as part of his research.

In an interview with The Chronicle, Mr. Gallagher cautioned that if Australia doesn't become more creative in its outreach to Asia, it could become less attractive to the three million students worldwide who cross borders every year looking for a better education. He says a sharp decline could hurt Australian institutions financially because many of them are dependent on the fees foreign students pay.

"In the early 20th century, we used to say Australia lived off the sheep's back, but now wool is only a useful commodity," he says. "In the same way, the golden age of Australian universities living off the international-students' back could be headed down the same path."

At first glance, the problem may not seem like a big one. Between 2008 and 2009, enrollment of foreign students in Australia grew almost 17 percent, according to the Australian government. The country's department of education reports that last year more than 631,000 students came to study in Australia at vocational schools, universities, and other educational institutions. The majority of these students are from Asia, with people from China and India making up almost 44 percent of the visitors, according to the Australian Department of Education, Employment, and Workplace Relations.

But major American universities, like the Universities of California at Los Angeles and at Berkeley, are expanding their efforts to attract Asian undergraduates.

Mr. Gallagher says Asian students may pick America over Australia for three reasons: prestige, places, and price.

• Prestige. While Australian universities are very good, they can't compete with the reputations of their American counterparts, he says. And such perceptions matter for study-abroad programs. "University reputation is incredibly important for Asian students, closely linked to international rankings."
• Places. American public institutions may have more places available for international students. For example, the University of California system is considering a rule that out-of-state and foreign students must make up a minimum of 5 percent of the undergraduate population at each of its campuses.
• Price. Australia is no longer a cheap alternative to America. The value of the Australian dollar has increased in recent years, and now almost equals the American dollar. The change means the annual cost in tuition and other expenses to attend a university in Sydney is about the same or more as one in California, he says. It "is eroding Australia's price-competitive advantage," Mr. Gallagher says.

In addition, international students who live in Sydney and Melbourne have been complaining about the lack of affordable housing and that they don't receive financial assistance from state governments to help with public transportation costs, Mr. Gallagher says.

With such a myriad of challenges, Mr. Gallagher cautions against what may seem like an easy solution: accepting more students from Asia. "Just accepting more applications could well reduce quality" and hurt Australian universities' reputations, he says.

Instead, he suggests that institutions be more innovative in recruiting high-quality students.

"Australian universities could do a lot more in offering generous scholarships and stipends to attract the best Asian students," Mr. Gallagher says.

He also says the government can do more to offer "residency pathways," programs that allow foreign students to stay in Australia after their studies end.

Such new recruitment incentives are needed soon, but the country has time to develop them, he says.

"It will take some years for UC campuses to ramp up their ability to recruit Asian students, because they don't have the know-how, relationships or administrative infrastructure in place," he says.

Despite the time cushion, Australia should be aggressive and creative in competing with America, he says.

"Having created an international reputation for quality, affordable education in a secure environment, Australian universities will continue to be judged on these terms," he says. "But it is difficult to see an easy solution to turn things around."