Australian universities are so chronically under-funded in their teaching activities that every domestic undergraduate is effectively subsidised to the tune of $1200 by international student fees.
That almost matches the commonwealth's own subsidy for domestic law and business students of $1765 a year.
Glyn Davis, vice-chancellor of the University of Melbourne, yesterday warned that this reliance meant that crashing international student numbers risked undermining the Gillard government's policies to dramatically boost domestic university participation.
"Since 2008, the number of visa applications for international students has fallen by 25 per cent," Professor Davis told the The Australian-Melbourne Institute Growth Challenge conference in Melbourne yesterday. "On the one hand, the government wants a huge domestic expansion, but it is meant to be underpinned by the continuing success of the international market. If that fails, so will this. This is what props up the entire university system."
An analysis of fees conducted by the University of Melbourne found that the total subsidy to domestic students from international students was $500 million a year. Michael Beaton-Wells, lead author of the review, said international students paid on average 40 per cent more for their study than their domestic counterparts.