The Dispatch
Where are New Zealand's international students?
International student enrolments in New Zealand are currently well below pre-COVID-19 levels, raising concerns about the country’s ability to regain its former student population.
By Seb Murray, Contributing Writer
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New Zealand’s higher education sector is currently grappling with a series of unexpected challenges but also promising opportunities. These dynamics are reshaping the way universities operate and engage with domestic and international students.
At the forefront of these challenges is the unexpected decline in domestic enrolments, coupled with heightened financial pressures. New Zealand’s universities have found themselves contending with a stark reality as they face a significant drop in the number of local students seeking tertiary education. This decline, which has taken many by surprise, has forced institutions to re-evaluate their strategies for attracting and retaining domestic learners.
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International student visas in New Zealand
Additionally, international student enrolments, despite the country’s borders reopening in July 2022, remain well below pre-COVID-19 levels. As of March 2023, there were approximately 34,000 international student visa holders in the country, up 98 percent since the border reopened. However, that stands in sharp contrast to the 125,000 such visas recorded in 2018. This has raised concerns about the sector’s ability to regain its former international student population.
While these challenges may appear daunting, there are individuals within the higher education community who see a silver lining. Chris Whelan, the Chief Executive of Universities New Zealand, points out that the decline in international student numbers can be partially attributed to universities’ cautious approach during the border closure years (2020-2022).
Whelan remains optimistic, believing that a few years are needed for universities to rebuild their international student pipelines.
“Many universities did not take in new students over the period when borders were closed,” he says. “It will just take a few years for us to rebuild our pipeline as this year’s first-year students become next year’s second-year students, and 2025’s third-year students. We are on track for fully rebuilding our international student numbers, but it will take three to four years.”
"We are on track for fully rebuilding our international student numbers, but it will take three to four years."
Moreover, Whelan offers an alternative perspective on domestic student numbers. Rather than viewing the recent decrease as a cause for concern, he says that these numbers have actually returned to pre-pandemic levels. “Domestic student numbers appeared to increase during the COVID period, but it was just the 2,000 or so students who would normally have gone overseas to places like Australia to do their university studies,” he says.
There are various factors at play behind the fluctuation in student enrolments. Professor Nic Smith, Vice-Chancellor of Te Herenga Waka — Victoria University of Wellington, highlights the intensely competitive nature of international student recruitment. New Zealand competes with global education powerhouses such as Australia, Canada, the United Kingdom and the United States, making it essential for universities to craft compelling strategies to attract international learners.
Another influential factor is New Zealand’s strong labour market. “Overall, university enrolments tend to be inversely correlated with employment rates, with a strong economy [particularly low youth unemployment rates] generally resulting in lower levels of domestic enrolments,” Smith says. “This impacts both on new applicants but also the retention of existing students who have competing options and demands on their time and money.”
This underscores the importance of recognising the broader economic context when looking into student demand.
Extra cash welcome
In response to these challenges, the New Zealand government has stepped in to provide financial support to universities. An additional NZ$128 million (USD $78 million) in funding has been allocated, supplementing the 5 percent funding increase announced in the 2023 budget. Simultaneously, the government has initiated a comprehensive review of the higher education funding system within the country.
Education Minister Jan Tinetti said previously that these measures were introduced to address both lower student enrolments and financial pressures faced by universities. “The government has heard the concerns of the sector,” said Tinetti. “When we began our budget process, universities and other degree providers were forecasting enrolment increases. The opposite has occurred, and it is clear that there is a need for additional support.”
The funding was broadly welcomed by the sector as a way to help universities deal with some of the shorter-term financial challenges around student numbers while their pipelines rebuild.
Professor Smith points out that universities “have been funded well below the rate of inflation for so long”, so the extra cash is welcome. “Per student funding has been dropping in real terms for years — in the last decade, it has fallen 20 percent compared to increases in the Consumer Price Index,” he says. “At the same time, costs have continued to rise.”
He adds: “Of the $128 million allocated to the sector, Te Herenga Waka will receive $12 million over two years. Over the same period, and without interventions, it is likely the university’s debt position would be around $70 million worse off. This means our longer-term financial sustainability remains an issue.”
Professor Smith also raises a critical point regarding the need for systemic change in the higher education funding model. He argues that the current system does not work as intended.
“University funding currently derives from a competitive pursuit of student numbers — the more students you enrol, the more money you get — which has led to universities often offering the same courses sometimes in the same locations,” he says. “It has also required them to come up with clever, but often expensive ways to make their university stand out and appear ‘better’ than others.”
Professor Smith hopes that the ongoing funding review will encourage universities to collaborate in delivering learning and teaching, ultimately benefiting students and achieving economies of scale across the sector. “With so many New Zealand universities experiencing significant financial challenges, it is clear that the current university funding model in a number of areas is serving neither the country nor university staff and students well,” he says.
“With so many New Zealand universities experiencing significant financial challenges, it is clear that the current university funding model in a number of areas is serving neither the country nor university staff and students well."
Professor Smith notes that Te Herenga Waka has been in discussions for several months with the University of Otago about collaborating around the delivery of some programmes. The University of Otago’s Acting Vice-Chancellor, Professor Helen Nicholson, expresses some solidarity with peer institutions. “While each university has their own defining characteristics, we all support Education New Zealand’s efforts to share our message to the world,” she says.
Despite the challenges, there is a consensus that New Zealand remains an attractive destination for international students. Professor Nicholson highlights the country’s high-quality and competitively priced tertiary education opportunities. She also underlines New Zealand’s commitment to multiculturalism within a bicultural constitutional context, making it an inclusive and welcoming society for international learners.
Furthermore, she says that she is “very pleased that international students are returning to Otago – overall enrolment is up significantly from 2022 and ahead of expectations”.
Professor Smith expands on the reasons for international students to choose New Zealand, including its universities being globally ranked by QS. He adds: “Along with high quality teaching and research, the country’s natural beauty and outdoor recreational opportunities are also attractive to international students. New Zealand’s diverse and inclusive society is known for being welcoming to international students, many of whom build lasting relationships here.”
Whelan of Universities NZ echoes those sentiments. “New Zealand is a welcoming country, we value kaitiakitanga – the care for people and the world around us for future generations to come – and this influences New Zealand’s education system and unique way of life.”
However, he says there is still work to be done to boost both domestic and international enrolments. Universities are actively rebuilding international relationships, with in-market promotional activities, participation in international student fairs, meetings with key agents and collaborations with partner schools and universities worldwide, he adds.
“We have some of the best qualification-completion rates, best graduate-employment rates, and lowest rates of graduate under-employment. Our challenge will be to ensure we remain the best choice for [some] domestic and international students,” Whelan says.
New Zealand’s higher education sector is clearly navigating a complex landscape, with threats and opportunities. But universities are proactively responding to changing enrolment dynamics, with a focus on rebuilding international pipelines, fostering collaboration and advocating for systemic changes in the funding model.
While the road ahead may be challenging, the commitment to providing high-quality education and maintaining a welcoming environment for students remains unwavering. New Zealand’s universities say they are determined to rise to the occasion and secure their place on the international stage.