This Sydney university has made billions from international students. Here’s what it’s doing with it

The University of Sydney boss says the institution has invested its record earnings from international students into a future fund to protect against any downturn, while urging the government to address the country’s growing reliance on foreign pupil fees.

Vice-chancellor Mark Scott said the institution has received its highest ever number of international applications for 2024, while maintaining it is still an “overwhelmingly” Australian university despite having 44 per cent foreign students.

Sydney University vice chancellor Mark Scott.Credit: Louie Douvis

“We value our international students, they are valued contributors, we love having them on campus, but I think there are many who would say the financial dependence on their contribution is not where it needs to be,” he said.

“Australian research performance is very strongly financially dependent on the flow of international students in Australia.”

International students accounted for 78 per cent of Sydney University student fee revenue in 2022, and 48 per cent of the institution’s total revenue.

It takes in more money from foreign students than any other university in the country, at more than $1.4 billion in fees last year. Its closest NSW rival for foreign students, University of NSW, took in about $700 million less last year.

Scott says universities have become increasingly reliant on international student money due to a lack of government and business investment in research.

“The only way top Australian universities have been able to make the investments necessary for their research achievements is because of international students, so they are important,” he said.

“They provide an enriching experience on campus, but they also indicate a series of broader policy challenges that we hope the Accord takes up.”

Scott said the federal government-commissioned University Accord interim report – released in July – was “too quiet” on research funding.

“I think we would be complacent at our peril and research will be a very significant driver of future economic growth in this country,” he said.

Sydney University was the only NSW institution to report a surplus last year, as universities struggled with shrinking enrolments and widespread investment losses.

Its positive budget balance came on top of a record $1 billion surplus posted in 2021, after managing to keep and recruit more Chinese students through the pandemic.

“What we have done with the extra income we earned there is that we have held on to that and invested that in a future fund which provides us with some level of security if there was a hiccup in the flow of international students,” Scott said.

The Accord’s interim report floated implementing an international student tax which would force universities to pay some of the fees they receive from international students to the federal government. The final report is due to be released in February.

It has prompted fierce rebuke from the nation’s top universities who have labelled it an “envy tax” while research out of the University of Melbourne warns it would exacerbate perceptions of international students as being “cash cows”.

Scott said aside from the financial benefits from international students, the “soft power” impact of tens of thousands of students who will go back to their home countries, rising to positions of influence as “friends of Australia”, was invaluable.

“I trust the government would do nothing to put at risk that vibrant and successful investment in Australia’s future and Australia’s research capability by putting a tax on [international students],” he said.

“If Australia did that … it would be received very poorly in international markets. It would be a considerable risk, and it would be very short-sighted.”

Asked if Australia had an overreliance on foreign students, Education Minister Jason Clare said only that international education was a key national asset.

He said the government had begun implementing improvements to the governance of the Australian Research Council, following a review commissioned by the government last year.

“These reforms will ensure the ARC is set up to meet current and future needs and maintain the trust and confidence of the research sector,” Clare said.

“The Universities Accord is also looking at ways to improve access to higher education, learning and research.”

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