Foreign students keen on clear NZ
Staff at universities, schools and other institutions feel the pain as high-paying international students dry up,
New Zealand’s success in crushing Covid-19 appears to be fuelling a sudden upsurge of students looking to come here from countries where the virus is still raging.
Auckland University of Technology vice-chancellor Professor Derek McCormack says inquiries from students overseas have “close to doubled” since the pandemic started.
“It may be that during the lockdown students had nothing better to do than look around at overseas universities.
“Or it could be the New Zealand factor, because New Zealand has had a lot of interest globally.”
This week New Zealand became one of just nine countries that have eliminated the coronavirus, achieving no active cases on Monday for the first time since the first local case was reported on February 28.
However, the surge of interest from foreign students cannot be translated into actual enrolments because the borders are still closed — a crucial factor in the country’s successful elimination of the virus.
National Party deputy leader Nikki Kaye and tertiary education spokesman Dr Shane Reti warned yesterday that New Zealand would lose hundreds of millions of dollars unless the border is reopened in time for the universities’ second semester starting next month.
Education Minister Chris Hipkins has revealed former Police Commissioner Mike Bush is leading a “whole-of-government” initiative to reopen the border gradually to priority groups, including people with work visas and foreign students.
But he warned against rushing into it for the second semester.
The NZ Initiative business thinktank has been calling for the past few weeks for the borders to be reopened to students quickly to “capitalise on brand Jacinda and our Covid-free status”.
Auckland University deputy vicechancellor Professor Jenny Dixon said applications from international students for the first semester of next year were already up 33 per cent at undergraduate level and up 20 per cent at postgraduate level.
“We noticed this before Covid so I’m not sure of the reasons,” she said. “You don’t really know these things until you get much closer.”
Academy Books owner John Chisholm, who wants to bring in Chinese students on charter flights and provide managed quarantine for them on arrival, said New Zealand was better placed to take students than Australia, which has clashed with China over Covid issues.
“The students are ready to come now. We could take them on a plane tomorrow,” he said.
For English language teacher Maria Treadaway, work has dried up completely. Like many others in our much-vaunted international education sector, Treadaway’s work has never been secure.
“I’m a freelance worker, mostly at the language academy of Auckland University and St Mary’s College. That has completely gone,” she says.
“In our industry, it’s not uncommon to have fixed-term contracts. Some people might have one for a year, it might be six months, and many people are operating on a monthly basis.
“It’s a weakness of the industry, I guess, because you still have to have an undergraduate degree and some kind of TESOL [teaching English as a second language] qualification.” Treadaway is more qualified than most. She is doing a doctorate at the University of Auckland developing English tests for aviation students, a niche market in which she hopes to specialise when the global Covid-19 pandemic eases.
“New Zealand is attractive because we have fantastic weather and geographical conditions for training — really nice flying conditions,” she says.
She has a doctoral scholarship that gives her enough to survive while there’s no work. But since the work dried up, she has paid for an online course on search-engine optimisation (SEO), an area that she worked in about 10 years ago and to which she is returning because there are no international students.
“I’m generally an optimistic person,” she says. “I love teaching, and I’ll do a bit of SEO on the side.”
The next big issue
Treadaway is not alone. Now that New Zealand is down to alert level 1, our economic activity is back up to about 95 per cent of what it was before the pandemic hit. Restoring that last 5 per cent depends on tackling our one remaining restriction: the border.
International tourism is obviously the biggest industry still affected, accounting for about half of that 5 per cent. But, apart from the transtasman bubble, it is not going to recover in a hurry because few tourists are likely to come if they have to spend the first two weeks in quarantine.
The next-biggest part of that 5 per cent is international education, accounting for about 0.7 per cent of our national income and about 35,000 jobs, or 1.4 per cent of the workforce. And, unlike tourists, most students come for long enough to make it worth putting up with a quarantine period.
“A student coming to the country for three years, or even a year, may well be quite happy to go through a quarantining experience,” says AUT vice-chancellor Professor Derek McCormack, who chairs Universities NZ.
“We can even begin their education while in quarantine, with online options.”
A major industry
Studying abroad has been a growth industry globally as international trade and tourism have exploded over the past 30 years, and New Zealand has benefited from the importance of English as the dominant language of trade.
Our international students in state-funded tertiary institutions have increased from 11,700 in 1999 to
60,700 last year, and are now 16 per cent of all students at those institutes.
In schools, international students are still a much smaller proportion of all students (1.5 per cent) but their numbers have grown over the same
20 years from 5400 to 12,400. A further 34,000 students attended non-state-funded tertiary institutes and English language schools last year, bringing the total numbers across all sectors to 117,200.
Those students are even more important financially than their numbers suggest, because they pay much higher fees.
“A domestic student brings us, with fees and Government subsidies, about $15,000 a year,” McCormack says.
“An international student gives us $30,000 a year, excluding accommodation.
“A domestic student and an international student are roughly the same amount of work, so a lot of the universities’ ability to provide quality education does rely on that extra profit of an international student.”
A 2018 study for Education NZ found that international students and their visiting families contributed $5.3 billion to the NZ economy in direct and indirect spending, making them our fifth-biggest export earner behind tourism, dairy, meat and forest products.
Their financial importance to our educational institutions varies widely by sector.
Universities, with 30,000 international students last year, earn income from research as well as student fees so overseas student fees contribute only about 11 per cent of their income.
At the other extreme, the English language schools, with 21,200 students last year, are totally dependent on the international market. They have also been hit much faster by the border closures because many of their students come for only a few weeks or months.
Language schools
Wayne Dyer, who chairs the sector group English NZ, says most of the 22 English language schools in the group have been holding on to staff so far using the Government’s wage subsidy scheme, but cannot hang on indefinitely. “Schools are starting to lay off staff because numbers are going down quite quickly,” he says.
“By October, we are either going to be going into hibernation, or we are going to be down to the core — say managers teaching classes and one or two staff keeping things going.”
English NZ director Kim Renner says she is aware of 13 full-timeequivalent staff laid off in the group so far. Napier’s New Horizon College has closed, affecting five staff, and the Christchurch College of English has closed its Auckland campus, which had eight staff.
“But some notices of redundancies have been given out recently with quite a lot more expected over the next couple of months if there is no indication of when the border might reopen,” Renner says.
“There have also been administration redundancies and reduction in hours/days.” Christchurch College of English principal Glenys Bagnall says her remaining Auckland students have continued studying online or transferred to other Auckland language schools.
“It has been a really difficult and sad time for staff and students,” she says.
Universities
McCormack says the country’s eight universities have lost $600 million, or about 14 per cent of their annual income, from reduced international student fees, lost revenue from campus services while the campuses were closed in the lockdown, and reduced research income.
The University of Auckland’s new vice-chancellor, Professor Dawn Freshwater, has told staff that Auckland alone has lost $100m, swinging from an originally forecast $32.6m surplus to a net loss now expected to be $63.7m.
International student fees have dropped by $41m, research revenue was potentially down $35m, and other revenue from accommodation, recreation and other services was down $24m.
In response, she said the university has cut staff costs by $9.5m by reducing fixed-term and casual staff and deferring recruitment, cut operating costs by $25m and chopped $67m off capital spending, including “a long list of minor capital works” and deferring earthquake strengthening.
“However, returning the university to a strong financial position will require us to achieve the right balance of capital, operational and people spend.
“It is therefore likely the university will need to reduce staff numbers in the future in order to achieve a sustainable position,” she said.
The university’s deputy vicechancellor in charge of international education, Professor Jenny Dixon, says almost 2000 of the university’s usual 8700 international students could not get into the country before the border closed on February 3 to anyone who had been in China.
About 1000 of those are still studying online from China and the university is opening two learning centres for them at Chinese universities in Harbin and Chongqing in the next semester.
Dixon says the loss of research revenue, based on staff being shut out of laboratories in the lockdown, might not now be as bad as expected because funders “have been very flexible on timing and scope of deliverables”.
McCormack says AUT has lost about 420 of its usual 3000 full-timeequivalent international students, costing it $26m, and expects to lose $40m-$50m all-up, including reduced revenue from campus services.
He has responded by cutting $40m from capital spending, halting the fitout of a new engineering building on the main campus and delaying the start of a new four-storey wooden $90m “community heart” building with a cafe, student lounges, study space, offices and teaching spaces on its North Shore campus.
AUT has applied for government funding for both projects from the $3 billion “shovel-ready” infrastructure fund.
“Our projects have been shortlisted — along with 800 others,” McCormack says.
Although McCormack says AUT is not planning staff cuts, a Tertiary Education Action Group has sprung up, representing junior academic staff on casual and fixed-term contracts who are losing their jobs at Auckland and other universities.
Spokesperson Luke Oldfield, a doctoral student in politics at Auckland, says those affected nationally “would number in the thousands”.
“We live off the smell of an oily rag. We get employed on these casual contracts and then eventually in five or 10 years we get a full-time job,” he says. “Those individuals are the ones that are doing a lot of the grunt work on behalf of full-time tenured staff. That grunt work might be administrative work, or it’s low-level teaching work, and it’s also research assistant work.
“Once you remove those people, you are forcing tenured staff to do those tasks, and then they are not producing research.
“You are going to end up with fulltime academic staff producing less research, which affects their university ranking, which is important to attract international students.”
Schools
The Schools International Education Business Association (Sieba) says international enrolments so far this year are down 28 per cent, costing schools $56.7m in fees.
Even though most school students arrived before the border closed, some didn’t arrive in time and other groups coming later for shorter visits couldn’t get in. About 800 went home to their families after the pandemic hit.
The impact on schools varies widely. Most schools have no international students but some of the biggest schools have hundreds.
Rangitoto College principal Patrick Gale, who had 260 international students last year, says 39 couldn’t get in this year before the borders closed, 13 have gone home, and a July intake that is normally 70 to 90 students has become impossible.
“We are projecting our income will drop by just over $750,000,” he says.
The college employs about eight support staff for international students and about 15 extra teachers to teach them.
“We haven’t made any redundancies and we are trying to shrink and cut costs as much as possible to protect those jobs,” he says.
But Sieba and the Secondary Principals’ Association have made a joint submission to the Government asking for “access to emergency support schemes”. Twenty private schools claimed $11.7m from the Government’s wage subsidy scheme, but state schools were excluded from the scheme.
Nationally, Sieba director John van der Zwan says schools employ between 1500 and 2000 specialist staff for their international students, and many have had their hours reduced in line with falling student numbers.
“The first response is to reduce hours and keep people, and that’s great.
“But there is a risk that people look for something else and we run the risk of losing that expertise,” he says.
Private institutes
Clare Bradley, chief executive of Auckland-based Aspire2 International, which has about 1400 overseas students in fields including business and hospitality, says the wage subsidy has been “a lifeline” for her business.
Most of her students for the first two terms of this year came from the Indian subcontinent and were already in New Zealand when the border closed. But her usual intakes of
300-400 students in July and again in September won’t happen unless the border reopens.
All her staff have taken 20 per cent pay cuts and some are on reduced hours and receiving only the wage subsidy of $585.80 a week before tax.
She is also applying for the extended wage subsidy to keep staff employed until the subsidy ends in September. “We are on our second major restructuring [since Covid hit],” she says.
“The current restructuring will take us through the next eight weeks on the extended wage subsidy.
“Then I suppose I’m hopeful that, if the borders haven’t opened by then and we don’t have certainty on the border opening, that the Government will consider a third tranche of the wage subsidy,” she says.
Another big institute that depends mainly on the Chinese market, Auckland Institute of Studies, says its numbers are down from a usual 900 to
650 at present.
Its president, Dr Julia Hennessy, says some staff have taken wage cuts or four-day weeks, and the institute has also taken the wage subsidy. But its revenue has not fallen by the 40 per cent required to get the extended subsidy and she will now have to consider redundancies.
“We are highly likely to let casual staff go at the end of June, and when staff resign we are not replacing them.” Asked about whether some permanent staff might be laid off, she says: “At the moment we are going through some further analysis around that, but that’s unfortunately a potential outcome.”
Polytechnics
Tertiary Education Union (TEU) president Michael Gilchrist says the only polytechnic that has laid off staff so far due to fewer international students is Northtec, which proposes to close the English language department at its Whangarei campus, axing four jobs. It also wants to lay off three trades teachers in an unrelated move.
TEU organiser Jill Jones says the union is fighting the proposal, which was open for submissions until Thursday. “They have done very little to promote the teaching of English language up in Whangarei,” she says.
A managed reopening?
Education Minister Chris Hipkins says former Police Commissioner Mike Bush is leading a whole-of government effort to plan a gradual reopening of the border.
“Of course we want international students coming into the country as soon as we can,” he says.
“We are not looking at the education providers doing it themselves. Whatever solution we do have has to be part of an all-of-government consistent approach for everybody.” He says about 250 people a day are being let in already and are being quarantined for two weeks in designated hotels. So far these are limited to returning New Zealanders and a few “essential workers” such as Avatar film crews, but international students are “in the queue”.
“Returning residents or citizens have to be the first priority,” he says.
“Then there are people who live here but maybe are on a work visa or are a partner of someone who is a citizen or resident.
“There are some essential workers who are vital to keeping the country’s infrastructure going. Some of them may only have to be here for a short time for a specific task.
“International students are in that priority list, and there will be a balance of priorities within that as well.” A Ministry of Health paper in late February, prepared when ministers were considering an exemption for students affected by shutting out anyone who had been in China, said the ministry’s “preferred option” was to start with university post-graduate students only. Hipkins says that is still a live option because such students don’t come in large numbers at one time of the year.
In contrast, English language schools may have to wait.
“The English language school business model is based on people coming in on tourist visas,” he says. “At the moment, we wouldn’t include tourist visas within the definition of a student visa.” Although many of the country’s 141,000 beds are still vacant in hotels, motels, backpackers and holiday parks, Hipkins says motels and other self-catering accommodation are not suitable for quarantining because “people can come and go as they please”.
“It’s about having quarantine arrangements where they are not coming into contact with one another, because obviously if one of them had Covid-19 you could have several hundred people in quarantine who can’t be released,” he says.
“So every person or family group has to be quarantined separately, so when you look at the logistics of that it’s quite a big undertaking.
“And they have got to have somewhere to exercise, three meals a day, all those factors, and the people supporting them need to be kept safe as well.” He says the hotels need to be “a reasonable standard”.
“We are using four-star and fivestar hotels — four-star by and large,” he says.
Hipkins has invited the universities to use their own public health experts to advise on what is required.
Dixon says the University of Auckland has proposed to use its student hostels to quarantine batches of up to 300 students every two weeks.
Victoria University vicechancellor Dr Grant Guilford has proposed bringing students in on chartered flights and quarantining batches of 200 at three sites around Wellington, including the vacant campus of the former Central Institute of Technology in Upper Hutt.
Bradley, of Aspire2, who is deputy chair of the sector group Independent Tertiary Education NZ (Itenz), says all education providers are ready to work together once the Government sets the parameters.
“I’m confident that there is such a commonality between the various parts of the sector including universities, polytechnics, private training providers and schools, that when the Government says we have 1000 places in quarantine, as a sector we can find a way of managing that,” she says.
Hipkins cautions against opening up in time for the second academic half-year, which starts next month.
“It’s unlikely, given the huge pressure we are under and all the logistical issues, that we will have anything in time for the second semester, but as soon as we can press the ‘go’ button, we will,” he says.
“By the beginning of next year, I would like to have arrangements in place where we could have a more significant number of international students coming in.
“That will be reasonable. But we won’t be back to normal until the borders are completely reopened.”
Schools need to be more courageous in offering permanency in their contracts. Maria Treadaway
A chance to rethink?
By October, we are either going to be going into hibernation, or we are going to be down to the core.
Wayne Dyer
This is a good time to reset the international education sector and change the mindset. Sabrina Alhady
Treadaway, whose career plans depend on it, says: “I really, really, really hope that the Government opens up our borders. I think we are actually in a unique marketing position at the moment because New Zealand is so safe and sane and reasonable, and we have just got an amazing country as a destination when you look at all the madness that is happening in the world.” But she hopes that this time qualified teachers will have more secure work.
“I definitely think that schools need to be more courageous in offering permanency in their contracts,” she says.
The Tertiary Education Action Group, TEU and NZ International Students’ Association president, Sabrina Alhady, all say tertiary education needs better state funding to reduce reliance on foreign students.
“This is a good time to reset the international education sector and change the mindset,” says Alhady, a Malaysian student who has just completed a politics degree at Otago University.
“What I mean is changing the way the institutions are run and being able to focus more on student experience and student success rather than just profit.” She says many international students felt isolated during the lockdown.
“A lot of students haven’t been receiving any communication specifically for international students from their institution,” she says.
“Student support needs to be elevated. There needs to be more staff so they can handle larger capacity.” Leading climate scientist Professor James Renwick says the need to halt global warming also argues for reducing reliance on overseas students.
“At the same time as we are looking to bring students back, we need to be thinking about the longer-term future,” he says.
“There should be consideration of whether this model of relying on international students for universities is actually sustainable. The reason for saying that is that the carbon emissions in flying students around the world are questionable at best.”
He predicts that international travel will eventually be brought into a global carbon trading system which will increase the cost of air travel. Studying in students’ home countries will become more attractive, even if it is online or at local campuses of foreign universities.
“A number of UK universities have campuses in South Asia in places like China and Singapore,” he says.
“Whether that is a model that might grow, and whether a New Zealand university might have a Chinese campus, that is another possibility.”