Student boom ends with overseas enrolment falling by two-thirds

The boom times in Dunedin's student market are over, with a 2 per cent fall in University of Otago enrolments confirming a trend at the city's other big tertiary institutions.

In a memo to staff, the university's vice-chancellor, Professor David Skegg, has said "clearly there will need to be belt-tightening in some areas", despite the fact the institution is in a strong financial position.

Both the Dunedin College of Education and Otago Polytechnic have previously flagged decreases in their rolls this year, of 5 per cent and 1.7 per cent respectively.

But the university is not yet resigned to its first decline in enrolments since 2000. In his memo, Professor Skegg said the full picture would not emerge until later in the year.

Most of the reduction is in international student numbers, accounting for two-thirds of the drop.

"Interestingly, numbers from the university's critical core of domestic first year school leavers are up slightly, with a record number coming from the North Island to commence their study at Otago this year."

Humanities has been hardest hit, down 3.9 per cent, but health sciences is up 1.9 per cent. Working on the rough rule of thumb that each student is worth $10,000 to the university, in Government funding and student fees, the cost in lost income would be more than $3 million.

The university's financial chiefs have already wiped several hundred thousand dollars from the balance sheets in anticipation of the enrolment figures, and will now be sharpening their pencils again.

In the memo, Professor Skegg said the small dip in domestic student numbers appeared to be driven by the strong job market, as shown by the decline mainly in mature students and those studying beyond their first degree towards postgraduate diplomas and certificates.

On the upside, enrolments for postgraduate research degrees are higher than ever.

While the roll drop will have an impact on university finances, Professor Skegg points out in the memo that the funding the university attracts on the basis of its research performance is now a bigger factor.

"The performance of the university and its departments in the forthcoming performance based research fund round [in June] will have a much greater influence on their future funding than any short-term fluctuations in enrolments," he said.

The university was budgeting for a 0.5 per cent growth in enrolments this year and does not expect to return to the boom years of the early part of the decade, forecasting growth of 0.2 per cent next year and 0.3 per cent the year after that as demographic and other factors kick in.

Other universities are also facing falling rolls this year, with the University of Auckland 4.1 per cent back on the same time last year, though the trend is not universal - Victoria University of Wellington is up by more than 2 per cent.

Dunedin Mayor Peter Chin said the fact students were coming south from the North Island in record numbers indicated the marketing of both the city and the university was having an impact.

Given the importance of the university to the city, the overall decline was of some concern, but the figures were still preliminary, he said.

There had been huge roll growth in recent years, and the decline this year had to be seen in that context, he said.


$554,000 in the red

The University of Otago's feeder school for international students has posted a loss of more than half a million dollars as a result of falling rolls.

Foundation Studies Limited lost $554,000 last year.

The previous year it posted a $622,000 surplus.

Notes in the university's financial statements record that "the major contributing factor to the poor result was the continuation of a decline in students".

"This is an issue that all providers in this sector are facing," the notes say.

Approached for comment yesterday, university vice-chancellor Professor David Skegg said Foundation Studies, a 100 per cent Otago University-owned company, had previously delivered "welcome surpluses".

It was reasonable to expect there would be difficult years, Professor Skegg, who is on the Foundation Studies board, said.

"We aren't happy with the financial result there last year but it wasn't surprising in view of the downturn in international enrolments," he said.

The equivalent organisations at other universities had suffered much more severe hits.

The Foundation Studies result was not a cause for any alarm but steps would be taken to ensure there were not continuing losses, he said.

"We are looking at enrolments for this year and the costs of the current establishment, but we wouldn't expect that sort of loss to occur over a prolonged period," he said.

No job cuts had been discussed, he said.

- OTAGO DAILY TIMES