Affordable Housing for University Students

As seen on The Australian Financial Review:


Affordable Housing for University Students

Opinion

Robert Lundy and Ken Buckle


 

In the past 10 years universities have become dependent on full-fee paying international students, particularly from Asian countries.   This dependence is likely to increase to help universities fill their growing funding gap.

But there is a threat on the horizon.  American universities are intensifying their efforts to attract international students from Asia and this drive by US institutions is putting pressure on our universities.  More importantly, it is highlighting the fact that we are increasingly uncompetitive in terms of delivering value for money for fee paying students.

According to the HSBC News Release, Australia is the most expensive country for overseas students. Its research found that the average cost of university fees at an Australian university is more than $US25,000 ($27,000).  But this amount jumps significantly to over US$38,500 when the cost of living is included.  By comparison, according to the HSBC, the average cost of university fees and living expenses in the United States is just over $35,700.

As is shown in the tables, a problem for Australia is that room and board fees at university residential colleges here are higher in most cases than the fees charged at the halls of residence at major public and private universities in the United States.  In order to make a fair comparison, the US figures shown are for accommodation in a single room, which is the norm in Australia.  But sharing with a roommate is the usual practice in the US for first-year students and this is less expensive.

Public Universities Fees Private Universities Fees
University of Wisconsin $10,192 Cornell University $9,180
Oregon State University $10,410 Stanford University $13,652
Purdue University $7,746 to $14,306 UC Berkeley $12,726
University of Vermont $12,174 Northwestern University $9,900
University of Washington $12,729 University Pennsylvania $9,792
University of Iowa $10,654 Columbia (Int’l House) $9,513
University of Texas (Dallas) $8,016 Emory University $9,230

 
The high Australian dollar is often blamed as the cause for the lack of competitiveness of our higher- education sector. However, even if the Australian dollar drops to $0.86 by the end of the year, which HSBC forecast in its report, Australian residential colleges are still not competitive with the United States. Meanwhile, US universities are attracting more and more students, particularly from Australia’s main market in Asia.

Australian Dollars US Dollars ($0.94) US Dollar ($0.86)
University of Melbourne $21,989 to $26,459 $20,670 to $24,871
University of Sydney $18,800 to $24,320 $17,672 to $22,861
University of Queensland $16,872 to $18,607 $15,860 to $17,491
University of Adelaide $17,160 to $17,600 $16,130 to $16,544
University of Western Australia $16,708 to $17,649 $15,706 to $16,590
Australian National University $14,473 to $16,482 $12,784 to $13,724
University of New South Wales $10,630 to $23,000 $9,992 to $21,620
Monash University (self-catered) $8,996 to $11,025 $8,456 to $10,364

 

The “2013 Open Doors Report on International Educational Exchange” reported that, last year, the United States enrolled 819,644 international students in its universities – a 7.2% increase over the previous year. Undergraduate international students increased by 10% and graduate international students increased by 4%.  Last year there was a 21% increase in the number of students from China studying at an institution in the United States.  Students from China, India and South Korea represent 49% of the total number of international students in the United States.

Due to the recent financial crisis and cuts in funding to universities, public institutions across the country are increasing their enrolment of out-of-state and international students who pay considerably more than students from in-state.  But the financial crisis has also seen a drop in the number of high school graduates deciding to attend a university outside their home state.  This and other factors, has contributed to a significant increase in the recruitment of international students particularly by public universities in the United States.

How can Australia respond to this challenge?  Besides tuition fees, the next major expense international students face is the cost of accommodation and meals, and it is possible to offer this more cheaply.  Our own residential college, the not-for-profit University of NSW International House, compares very favourably in its fees with the residence halls of American universities.  International House cost $266 a week for full room and board, which is $10,630 for the academic year. Even with what is believed to be the most affordable fees of any full-board residential college in Australia, International House remains very profitable.  Last year the operating surplus was 34 per cent of the total income.  If you include only the fees from the residents, the surplus was 22 per cent.

We believe that lowering room and board costs is an important way to keep Australia competitive in international education.


Dr Robert Lundy is Master and CEO of UNSW International House.  Emeritus Professor Ken Buckle is Deputy Chairman of UNSW International House.

 

The above article was printed in the Australian Financial Review, Education Section on Monday 11 August 2014.