Educational institutions around the world are reeling from the effects of the coronavirus pandemic, which is preventing new and existing international students -- their number exceeds 5 million globally -- from attending the universities and colleges of their choice in person.
The pandemic has had a significant impact on students from many countries, especially China, which is the top source of students studying in the United States, Europe and Australasia.
Recent data shows that in July there were about one million international students in the US alone. China (34%) is the largest contributor followed by India (18%), with the two countries accounting for 52% of the market, according to data from Open Doors. Both China and India send hundreds of thousands of students study abroad, while the third market, Saudi Arabia, accounted for 37,000 last year.
Universities have been concerned for some time about the potential downside of this reliance on Chinese students. In a prescient move, the University of Illinois at Urbana-Champaign paid US$424,000 to insure itself against a shortfall of up to a $60 million in tuition revenue from Chinese students who represent about one-fifth of its revenue, having first come up with the idea in 2015.
Such insurance can be used in the event of large-scale disruptions such as a pandemic, a trade war or visa restrictions. While this move is thought to be a world-first, other educational institutions will likely follow suit given the harsh lessons they have learned from the coronavirus pandemic and the need to mitigate future risks.
Many educational institutions have been quick to move to distance-learning platforms. While this has been successful in many cases, it could make it harder for them to continue charging the same level of fees, as students can rightfully claim they are not receiving the same level of service.
These issues will be here for some time, with the Centre for Global Higher Education saying it could take five years for global student mobility to recover from the effects of the pandemic.
Not only are its students facing educational challenges because they cannot travel to overseas universities, China is also a leading education destination, with Asia, Europe and Africa as its top three source markets.
While it will be facing the same challenges as other destination markets, recent research by BridgeU revealed China as having the largest increase in students listing it as their top educational destination of choice (up 124%) from the academic entry year 2020 to 2021.
While it is too early to predict how the pandemic's repercussions will affect the global education market in the long term, current trends indicate the potential for big changes, both in terms of a likely increase in competition to attract Chinese students, and also for China developing itself as an alternative market, especially for students from Asia.
Suwatchai Songwanich is an executive vice-president with Bangkok Bank. For more columns in this series please visit www.bangkokbank.com
