The Australian

By Dr Sean Gallagher  

Australian higher education has a reputation problem. Many would argue that this is largely undeserved, but perception is everything. And it is this tarnished reputation that is the direct cause for the downward spiral in recruiting international students.

A proven reputation-building strategy of an American university could provide the solution Australia needs.

Three pillars of Australian competitive advantage -- a secure and safe environment, affordability, and pathways to Australian residency -- which have allowed our universities to live off the back of international students, are perceived as crumbling rapidly. With many brand name American public universities, including UCLA and Berkeley, opening their arms to international students, and now closely followed by their Canadian peers, the quality of the Australian education product is looking inferior.

Steve Sample, the president of the University of Southern California, was faced with much the same problem when he took up his post in 1991. USC had a party school reputation and could not attract quality undergraduates. It was known as the university of "spoiled children", drop-out rates were high and graduation rates abysmally low. And being physically situated in the dangerous neighbourhood where the 1992 LA riots occurred meant less than two in five freshmen were female.

Today, USC is a pin-up college of American higher education. From 1991 to 2008, USC jumped an unprecedented 28 places to 23rd position on the highly influential US News & World Report rankings. Over this period, Sample quintupled his private university's endowment to almost $3 billion, established USC as a pioneer in interdisciplinary research and education, and even turned its "dodgy" Los Angeles neighbourhood campus into a positive.

USC now attracts more international students than any other American university.

How did Sample manage to turn USC around so quickly to become Time magazine's college of the year in 2000? By turning a venerated shibboleth of higher education on its head.

Universities have long pursued a strategy that you must build quality first if you want to develop a good reputation. Indeed, universities appropriately spend much of their time, energy and resources on improving the quality of education and research programs to deliver reputation dividends. But when every university is doing the same, there's little competitive edge to be gained.

Sample showed that building reputation itself is a means to develop a higher-quality university. The key element of this strategy is people, or more precisely, targeting the right people in the right places.

Dramatically improving every aspect of undergraduate education was the highest priority of the USC strategic plan, starting with a complete overhaul of the undergraduate program. Innovations included an interdisciplinary approach, senior academics teaching freshmen in intimate settings, and reducing undergraduate places by 500.

These quality improvements were not enough. USC's bad reputation prevented it from recruiting the quality students it needed.

In what Sample refers to as a contrarian decision, he eliminated need-blind admissions for weaker students while instituting scholarships based on merit alone. Lucrative flagship scholarships to attract the best students from across the US spearheaded this three-tiered, merit-based program.

The high-profile scholarships not only lured the best high school-leavers but also had a profound multiplier effect. Attracting the nation's top-ranked students had a powerful influence on their classmates, as they might not have believed that such outstanding students would choose USC. It worked spectacularly well.

James Moore, a department chair at USC, lauded this reputation-building policy in The Chronicle: "Offering responsible, careful, middle-class families with striving children a small amount of merit-based aid that recognised achievement regardless of need resonated like a thunderclap with the values on which these households are centred. These families sent their students to USC in droves."

Here in Australia, the Endeavour Awards is an internationally competitive, merit-based scholarship program that provides study opportunities for overseas students. Yet undergraduate awards for international applicants are conspicuously absent from the program.

The federal government should expand this program to offer undergraduate scholarships for outstanding international students. Three tiers of merit-based scholarship would mirror USC's successful formula. The Prime Minister's scholarship, valued at $50,000 annually (full tuition and living expenses), would be available for the top 20 international undergraduate students for study at an Australian university. There would be 50 second-tier scholarships at $20,000 annually, and 100 third-tier scholarships valued at $10,000 annually. Recurrent program costs would be about $10 million, a small investment with enormous returns.

USC's reputation was more sullied than Australia's currently is. Yet today, USC out-competes Harvard, Yale and Stanford for the best undergraduate students. It even competes with the University of California (UC) even though a UC education costs about 20 per cent of the USC sticker price.

Ironically, the USC program has also led to a surge in enrolment of students from low socio-economic backgrounds. Australia can do the same against the US, Britain and Canada. Quality is not the issue; Australian undergraduate education is already world leading. Attracting quality students is the challenge.

Australia needs to reboot its global reputation in the undergraduate market. High-profile, merit-based scholarships could be the thunderclap Australian universities need to resonate with international agents, striving students and their families.

Sean Gallagher is a research associate in American higher education and chief operating officer at the US Studies Centre at the University of Sydney.