The failure of universities to keep costs under control and to build adequate financial reserves has left them exposed to default and the biggest threat they face is not the collapsing international market owing to COVID-19, but the vast number of new universities in China, says a new report.

Writing in the Accounting, Auditing and Accountability Journal, professors Tom Smith and James Guthrie, from Macquarie University, say overseas revenue increased by 230 per cent between 2008 and 2019. Domestic student revenue grew by a much smaller 64 per cent.