Soaring inflation is injecting more volatility into the global international education industry, in ways that could benefit some destination nations – or leave them all worse off.
A Sydney economist said price rises could boost some countries’ share of globally mobile students, partly because costs are increasing more steeply in rival destinations but mostly because of changes to currency exchange rates.
However, global inflation also risks triggering a general downturn in student flows by putting international study beyond many people’s financial reach.
Data analyst Keri Ramirez said prevailing rates of inflation – 5.1 per cent in Australia, 6.8 per cent in Canada, 6.9 per cent in New Zealand, 8.3 per cent in the US and 9 per cent in the UK – could already have forced families to re-evaluate their study abroad intentions.
“They will consider alternatives such as online education, delaying their plans or enrolling their children…within their home country,” said Mr Ramirez, managing director of consultancy Studymove.
Rising inflation also created “issues in consumer expectations” among those undeterred by the increases registered so far. “The risk and uncertainty of inflation fluctuations in the future may result in some international applicants delaying big financial investments such as education abroad,” he said.
On the other hand, Australia’s lower inflation by international standards could play in its favour. “[It] may lead to a weaker value of the Australian dollar, which will result in a more competitive position for Australian providers,” he said.
Mr Ramirez predicted elevated exchange rate volatility for at least six months, and warned that the new relativities would take time to play out. But he said US families bankrolling their offspring’s studies in Australia were enjoying a 10 per cent price cut thanks to a dive in the Australian dollar’s value between early April and mid-May.
Exchange rates against the currencies of Australia’s main student source countries had been less pronounced but had still delivered savings of around 1.5 per cent for China, 4 per cent for Malaysia, 5.5 per cent for India and 6 per cent for Indonesia.
Competitor countries had been affected differently. Canada, for example, had become marginally cheaper for Indian and Indonesian families, but over 3 per cent more expensive for those in China. Mr Ramirez said shifts of a few percentage points could mean a lot in the context of the “big” investment required to send a child overseas.
“This could actually change their decision-making process. There is a segment of the international world of applicants where price sensitivity is a very important factor,” he said, adding that universities had been offering scholarships of 15 or 20 per cent “just to have a more active engagement with market”.
Mr Ramirez said universities and colleges should track changes in exchange rates “to identify potential opportunities or challenges in key markets”. Soaring inflation and exchange rate instability also made it paramount for education providers to keep international applicants informed of “realistic” costs of living in Australia, regularly updating their advice.
He highlighted a??advising that rent in Melbourne hostels and guesthouses ranged from A$90 (?51) to A$150 a week. “I don’t think…you can find hostels for A$90 a week. Even if they exist, we should probably not recommend those accommodation options…because when [students] put the budget together, that’s the reference they’re probably going to follow.”
