E     I     P
		Comparative Costs of Higher Education Courses for International Students in Australia, New Zealand, the United Kingdom, Canada and the United States
		97/15 Ken Back Dorothy Davis Alan Olsen IDP Education Australia September 1997
		Evaluations and Investigations Program Higher Education Division Department of Employment, Education, Training and Youth Affairs

©Commonwealth of Australia 1997

ISBN 0 642 23687 9

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction and rights should be addressed to the manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601.

Executive Summary

This report compares the costs of higher education courses for international students in Australia with those in New Zealand, the United Kingdom, Canada and the United States—the other key destination countries for international students seeking higher education in English language speaking countries. The report looks at tuition fee costs, living costs and total costs in the five destination countries.

The Task

IDP Education Australia (IDP) was commissioned by Australia’s Department of Employment, Education, Training and Youth Affairs (DEETYA) to compare the costs of higher education courses for international students in Australia, New Zealand, the United Kingdom, Canada and the United States. This 1997 study updates and extends work done by IDP in 1994 on the costs of postgraduate courses for international students. That work was published in 1994 as Comparative Analysis of Costs of Postgraduate Courses for Overseas Students in Australia, New Zealand, the UK, Canada and the US.

Methodology

Data for the study were drawn from a range of sources including IDP resources, national organisations, published guides and directories and the Internet. Detail of the methodology used is given in the relevant chapters and appendices.

How Fees are Set

Chapter 1 describes the development of policies and the processes in the setting of fees for international students in the five countries encompassed in the study, with particular reference to the role of government.

Tuition Fees

Chapter 2 presents and analyses the results of the survey of tuition fee costs of higher education courses for international students in Australia, New Zealand, the United Kingdom, Canada and the United States.

The study surveyed courses at Bachelor, Masters and PhD levels in Arts, Business, Engineering, Information Technology, Medicine, Nursing and Science, plus MBA programs. The surveyed covered all universities in Australia and New Zealand, and samples of universities in the United Kingdom, Canada and the United States.

Highlights from Chapter 2 include:

• in Arts, Australia’s BA degrees are priced in the middle of the field, more expensive than Canada, on a par with New Zealand and less expensive than United States public and the United Kingdom;

• Australia’s prices for a year of undergraduate Business are more expensive than Canada, less expensive than the United Kingdom and United States public, but on a par with New Zealand;

Range of Fees—Business Bachelor in US$

• the median fee for a year of undergraduate Engineering in Australia is on a par with New Zealand and the United Kingdom, more expensive than Canada and, significantly, US$2,000 more expensive than in United States public universities;

Range of Fees—Engineering Bachelor in US$

• Australia’s fees for a year of undergraduate Information Technology are on a par with United States public, more expensive than Canada, and somewhat less expensive than the United Kingdom and New Zealand;

• a year of undergraduate Nursing in Australia is more expensive than Canada, at the same price as United States public and less expensive than New Zealand and the United Kingdom; and

• the median fee for a year of undergraduate, laboratory-based Science in Australia is on a par with New Zealand and the United Kingdom, more expensive than in Canada and, significantly, around US$1,500 more expensive than in United States public universities.

From Australia’s perspective, prices in the United Kingdom are expensive, to some extent impacted by the high value in mid 1997 of the English pound. United Kingdom prices consistently are more expensive than in the United States public universities and in Australia and New Zealand. The exception is with MBA programs, which United Kingdom universities offer quite cheaply.

The United States public universities are generally more expensive than those in Australia. Exceptions are in Engineering and Science, where Australia is more expensive than the United States public universities at the Bachelor, Masters and PhD levels, and in Information Technology, where prices are comparable.

Australia and New Zealand fees generally are on a par, generally in the middle of the field and consistently lower than in the United Kingdom and at United States public universities. In Engineering and Science, prices are higher than those in United States public universities.

Policy in Canada has only recently started to set market rates for tuition fees for international students. Only in the case of MBA fees in the United Kingdom are any of the other four countries less expensive than Canada.

Figure 7, from Chapter 2, reproduced here, displays the range of fees for Bachelor degrees in Engineering.

Figure 7: Range of Fees—Engineering Bachelor in US$

Living Costs and Other Factors Affecting Costs

The costs of higher education for international students include tuition fee costs and living costs (see Chapter 3).

Living costs for an international student are highest in the United Kingdom, marginally more expensive than in the United States. Both the United Kingdom and United States are US$2,000 per year more expensive than Australia, New Zealand and Canada. Figure 23 from Chapter 3 is reproduced below.

Figure 23: Annual Living Costs—US$

There are a number of other factors that can affect the financial situation of an international student, including the extent to which scholarships and assistantships are available to international students, access to employment and school fees for dependent school age children.

Different countries have different approaches to provision of financial support to international students through scholarships and assistantships. The United States approach is for universities to provide assistantships, supporting 34 per cent of international postgraduate students in 1995/96. Other countries are more targeted, with Australia providing scholarships on the grounds of development assistance or merit to 24 per cent of international postgraduate students in 1997. In comparison with the other countries, work rights in Australia generally are more liberal. With its lack of a uniform policy to provide public education free of charge to school age dependents of international students, Australia compares poorly with the United Kingdom, Canada and the United States.

Curriculum Analysis

A process of curriculum analysis (Chapter 4) was carried out to ensure that the study compared like with like, an essential preliminary before Total Costs were compared (Chapter 5).

The 1994 study looked at postgraduate courses and found that the quality of the 15 Australian postgraduate courses, measured by curriculum specialists on factors such as entry requirements, course duration, course content, levels of study and assessment procedures, was comparable in every case with the similar courses in New Zealand, the United Kingdom, Canada and the United States.

For the 1997 study, it was assumed that the 15 postgraduate courses that were found to be comparable in quality in 1994 were still comparable in quality in 1997.

It remained to compare the quality of seven undergraduate courses in Chemistry, Accounting, Computing, Public Health, Education, Urban and Regional Planning and Mechanical Engineering across the five countries.

A curriculum consultant carried out this curriculum analysis, as described in Chapter 4. The consultant found a very high level of comparability among the subject universities, in the way in which undergraduate courses in these seven fields of study are structured across the five countries.

The process of curriculum analysis ensures that, when total costs of the cross section of undergraduate and postgraduate courses are compared across the five countries, the conclusions drawn will be valid.

Total Costs

In Chapter 5, the study compared the total costs of a cross section of higher education courses in Australia, New Zealand, the United Kingdom, Canada and the United States. The cross section of courses covered Bachelor, Masters and PhD course in Chemistry, Accounting, Computing, Public Health, Education, Urban and Regional Planning and Mechanical Engineering, plus MBA programs.

In terms of total costs, the study found that the United States and the United Kingdom are consistently more expensive than Australia, New Zealand and Canada. Australia’s total costs place it broadly in the middle of the field.

The United Kingdom has more expensive tuition fee costs than the United States, and its living costs are a little more expensive. One would expect the United Kingdom to be more expensive in terms of total costs. In fact, the United States is more expensive. Course length is a factor.

Table 50 from Chapter 5, reproduced below, shows the effect of course duration on total costs for the Bachelor of Engineering course at the United Kingdom’s University of Sheffield. This three year Bachelor degree, leading to accreditation as a professional engineer is attractive to international students, even though the total cost is not substantially less than four year programs in other countries.

The United Kingdom has paid some attention to the shortness of its higher education courses. The National Committee of Inquiry into Higher Education reported in July 1997 that higher education in the United Kingdom ‘produces first degree graduates quickly’ and ‘the three year honours degree is short by world standards’.

Table 50: Total Costs—Mechanical Engineering Bachelor

Findings

In Chapter 6, the report presents and discusses the findings of the study on the relative costs of the tuition fees and total costs in the five countries, and comments particularly on the MBA programs, the effect of course duration, the setting of fees, and costs and marketing.

MBA Programs

The United Kingdom offers its MBA programs quite cheaply. These United Kingdom programs tend to be one year MBA packages where the fee has not been adjusted to reflect any additional intensity as a result of the packaging.

MBA prices in Australia and New Zealand are comparable, below those of the United States public institutions, but more expensive than the subsidised Canadian prices.

How Fees Are Set

The 1994 study reported that, in comparison with New Zealand, the United Kingdom, Canada and the United States, Australia has clear, consistent, rational and understandable policies within which fees for international students are set.

Nothing has changed. There is little for Australia to learn from policy in North America in the setting of fees, and policy in New Zealand is broadly consistent with that in Australia.

In the United Kingdom, fees for international students were deregulated in 1993/94 when the Government recommended minimum fees were abandoned for international students. What implications are there for Australia’s indicative minimum course fees?

Australia in 1997 is undertaking a Review of Higher Education Financing and Policy (the West Committee), with terms of reference that ask for a broad ranging review of Australia’s higher education sector, a comprehensive policy framework and options for financing. Australia’s Higher Education Review looks to be the appropriate forum for a review of the indicative minimum course fees.

Duration

The duration of a course of study is a critical factor in determining the total cost. Not only is the cost to an international student of an additional year of study at an overseas university substantial, but it also means an additional year’s salary foregone. It follows that, quality being equal, a shorter course will be more attractive to students, including international students, than a longer course.

Costs and Marketing

How important is price in the marketing of international education? The model suggests that there are four groups of factors in choice.

IDP Education Australia has commissioned research on a model of the reasons why students choose an overseas study destination. The model suggests four groups of factors in choice:

• the characteristics of the destination country and its education system;
• the quality of the course;
• the cost; and
• the process.

As a student evaluates alternatives, the characteristics of the destination country, its education system, the institution and the course are important. These characteristics include the quality or reputation or standard of the course, the quality of the teaching facilities and recognition of qualifications.

The model suggests that the evaluation of alternatives, on the basis of the characteristics of the destination country, its education system, the institution and the course, will lead to an intention to choose. Unless there is an impact from cost or process, the evaluation of alternatives leads to an intention to choose.

This model suggests that cost is no more than a potential negative impact, along with processes such as the visa application process and the application process.

Concluding Comment

The value of a study such as this depends very much on the purpose to which its results will be put.

If the object is simply to compare costs, the analysis of the annual tuition costs gives a useful comparative measure of the different courses, and levels of awards, in the five countries. A better comparison of cost is made if living and other costs are taken into account, together with the duration of courses. These comparisons, together with an understanding of the basis of the policies and practices developed in each country, provide pointers for institutions and governments as to where they stand comparatively and what future policy directions they might follow.

If, on the other hand, the purpose is to understand why international students make their choices of study destinations, then cost is but one of several factors which contribute to the final choice. And of the other factors perhaps the most important, and most difficult to measure, are the quality of the product and the quality of life in the destination country.

[Return to Top] [Download Full Report]