Economy of the entire world is facing a steep slow down. The growth rate of all the major economies is already expected to see almost negligible growth rate for the current financial year 2020. Apart from other reasons for the economic slowdown, education is also one of the major reasons which will have the adverse effect on the economies of various countries. Although, many of us might not even consider it as the part of our economies but their importance for our economies cannot be denied.
The renowned universities as well as colleges attract a lot of students, who further spend a lot of money for their education in prominent educational institutions. There are various kinds of fees which they are charged for like, hostel and accommodation facilities, catering facilities, conference facilities, and excursions fees and also they might be charged for their trainings as well as internships. In short, we can say that money is the lifeblood of the education system today.
The education sector of the world has now become vulnerable as well as susceptible to the pandemic caused due to the coronavirus.
Currently, the large numbers of students are sent back to their homes, and many courses have moved online. In case lockdowns continue around the world, then in such a scenario new students are changing their minds and thus finding it even harder to get into their campuses. Plus, conferences are not happening, and all those wealthy alumni are nowhere near as wealthy as they thought they were.
Covid-19 is hitting Western English-speaking universities particularly hard. They even charge large sums of tuition fees for domestic students, and make money out of on-site catering and accommodation on top of that. They also tend to charge foreign students a lot more, making them a huge source of income for many universities.
According to BBC, the UK undergraduate students from outside the UK and the EU can be charged annual tuition fees as high as £58,600 instead of the standard £9,000. So, while globalization for many means importing cheaper manufactured goods from around the world, for developed economies one of their greatest recent economic successes has been attracting students from overseas.
“The rise of the middle classes around the world has been a godsend for Western universities”, says Simon Marginson, professor of higher education at the University of Oxford.
“The global middle classes have grown by leaps and bounds in recent decades, and anyone in that group can send their children abroad for education,” he says.
They have been doing just that, not least because many developing countries don’t have the same quality of tertiary education as developed ones. This means that students who study abroad emerge with a prestigious degree, a second language, and lots of contacts and friends. It has proved a price worth paying for millions.
The big winners in this regard have been the US, the UK and Australia. All with excellent education systems that teach in English, they can attract fee paying students from around the world.
Andrew Norton, professor of the practice of higher education policy at Australian National University in Canberra, says the country has been trying to attract foreign students from Asia since the 1980s.
Australia has some distinct advantages for these students, he says. “We are in much the same time zone, the climate is attractive, and there is the possibility of migrating here.”
That message is hardly likely to encourage new students to feel welcome in future, and that matters, says Prof Norton, because “there is a pipeline effect”.
“If students don’t start a degree course this year, then they are not here for three years,” he says, meaning universities are going to be feeling the pressure of lost income for years to come, and not only in Australia.
If we talk of the US, university sector is a gigantic business here. Even some of the oldest and the most famous colleges have billions in their reserves, massive endowments, and also hold a reputation that means they can charge students top dollar. But even they are suffering being closed now.
Many overseas students in the US are demanding rebates for lost lessons, and American universities make a small fortune from having students on site. Catering and accommodation are huge earners. Students in the UK have also been calling for refunds.
Professor Marginson says that while universities have rushed to move courses online, at least temporarily, it is clear that they are not as attractive.
“Students, if given the choice, pick face-to-face teaching,” he says. “Online does not have the same prestige, and not just with employers, but with society as well.”
In the UK, Cambridge University has announced that all its lectures will be online-only during the next academic year. However, it said it would review the situation if government guidance changed.
All the colleges as well as universities across the world are now moving their major focus towards online and remote teaching methods now, because now they are realizing the importance of the online teaching methods if they really want to continue with their incomes. As now the world is in lockdown and following social distancing norms, they have no choice, and thus it is the only way of keeping at least some money coming in.
Currently, there is no adequate data or information about, how many universities will survive the collapse of their income, and also whether these move towards online teaching are permanent or not. Teaching people together on one site has proved to be a very long-lasting and successful business model, and it still carries huge prestige and rewards for those taking part.