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Home / New Zealand

Covid 19 coronavirus: 'Don't plan on international students until 2022' - schools face deficits of up to $1.5m

Simon Collins
By Simon Collins
Reporter·Herald on Sunday·
11 Jul, 2020 05:00 PM7 mins to read

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World Health Organization (WHO) Director-General, Dr Tedros Ghebreyesus, told reporters that the WHO is “looking into the origins of the virus.” Video / AP

Some schools face deficits of up to $1.5 million in the wake of Government advice not to plan on new overseas students until 2022.

Ministry of Education head Iona Holsted has told Auckland Grammar School headmaster Tim O'Connor in an email that "given the uncertainty of the border, if I was a principal I would plan for no students until 2022."

"This is conservative advice, but the converse would have been to give certainty of arrival in 2021, and that is not currently possible," she said.

Macleans College principal Steve Hargreaves, who had 320 overseas students last year, said he is now planning on a deficit of $1.5m in the next 12 months.

Epsom Girls' Grammar School board chairman Chris Isles said his school faced a deficit of "close to $1m" .

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O'Connor said Auckland Grammar was projecting a deficit of $200,000 to $400,000 this year and would lose $1m next year if the border remains closed to students.

Tim O'Connor says Auckland Grammar is projecting a deficit of $200,000 to $400,000 this year. Photo / Jason Oxenham
Tim O'Connor says Auckland Grammar is projecting a deficit of $200,000 to $400,000 this year. Photo / Jason Oxenham

Other schools, such as Northcote College and Mt Albert Grammar, said they were managing the loss of international students because their domestic rolls were growing.

But Mt Albert headmaster Pat Drumm said he was "in discussion with the staff that are directly related to that [overseas student] funding".

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O'Connor said he has cut costs by not replacing four or five staff who have left, mainly in support roles.

"We have been fortunate that they were in areas that we can just do without," he said.

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All the schools said they had also cut school-funded capital spending such as building maintenance and computer upgrades, but Isles said that was only short-term.

"You can defer maintenance and IT support, but that's just pushing the problem down the road a little bit further," he said.

Schools, universities and other institutes catering for New Zealand's $5 billion international student sector had been hoping for a decision soon that would let them start recruiting students for summer programmes, or at least for the 2021 academic year.

Patrick Walsh says the window for recruiting most students for next year will close in September or October. Photo / Stephen Parker, Rotorua Daily Post
Patrick Walsh says the window for recruiting most students for next year will close in September or October. Photo / Stephen Parker, Rotorua Daily Post

Patrick Walsh, of John Paul College in Rotorua, who chairs the School International Education Business Association (Sieba), said the "window" for recruiting most students for next year would close around September or October, because students who couldn't get into New Zealand by then would go elsewhere.

"We are concerned that other countries are going to get the jump on us - Australia, Canada and England," he said.

Ironically, schools such as John Paul College are seeing a jump in applications because of New Zealand's largely Covid-free status.

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"At this time of year we'd probably get 10 to 15 [applications]. We are looking at 25 to 30 applicants for next year, particularly from China, Korea and Japan," Walsh said.

But the chances of letting students in any time soon have receded dramatically since the Government asked Air NZ to stop selling new tickets even to NZ citizens wanting to return in the next three weeks, because of limited quarantine capacity.

Some schools will cope. Hargreaves said Macleans would cover its deficit out of reserves built up over 20 years to cover the risk of a downturn in overseas students.

"We know, because we rely heavily on the Chinese market, that it would only take a change of sentiment to turn that funding off," he said.

Pat Drumm: "We don't run huge surpluses." Photo / Dean Purcell
Pat Drumm: "We don't run huge surpluses." Photo / Dean Purcell

But Drumm said most schools did not have big reserves.

"We don't run huge surpluses, that's just what happens in a state school," he said.

Sieba and the Secondary Principals' Association asked the Government in May for "emergency support" to retain the jobs of 1500 to 2000 school staff who recruit and support international students. Walsh said there were "continuing discussions".

Isles said he has asked the Ministry of Education for a low- or no-interest loan scheme to help schools keep their staff until students return.

Chris Hipkins: "We are actively considering options to buffer the sharp decline in income." Photo / Mark Mitchell
Chris Hipkins: "We are actively considering options to buffer the sharp decline in income." Photo / Mark Mitchell

Education Minister Chris Hipkins said he is "sympathetic to the impact the unexpected loss of revenue will have had on schools".

"We are actively considering options to buffer the sharp decline in income," he said.

"The pandemic is still raging overseas and our borders are our first line of defence against Covid-19. International students are, however, important to New Zealand and the Government will allow them to return when it's safe to do so."

Iona Holsted: "My advice has been to take a conservative approach." Photo / Mark Mitchell
Iona Holsted: "My advice has been to take a conservative approach." Photo / Mark Mitchell

Holsted said she still did not know when it would be safe for students to come.

"In the meantime, my advice has been to take a conservative approach and plan for a range of different scenarios. I am sure principals are already doing this."

Overseas students jump online

A third of the international students at an Auckland college preparing students for university are now studying online from their home countries.

Up International College, which split from the ACG group last year, now has 300 students studying from overseas and 600 international students at its Queen St campus.

Up Education's Up International College at 345 Queen St, Auckland, has more international students than any other school below tertiary level in New Zealand. Photo / Simon Collins
Up Education's Up International College at 345 Queen St, Auckland, has more international students than any other school below tertiary level in New Zealand. Photo / Simon Collins

Chief executive Mark Rushworth said the company spent several million dollars over 18 months developing an online platform that was ready to go at the end of March, just when the Covid-19 lockdown hit.

"We have pivoted - out of necessity," he said.

"We have taken it all online now and we had 100 full fee-paying students in April and well over 200 starting with us this month.

"It's amazed us. We were looking at the numbers saying, 'Wow!' But maybe there is no alternative for them. They really want to go to your university to study and there is a place for them when they come out of the pathways product."

The school provides one-year courses in a range of academic subjects at a level that Rushworth describes as equivalent to Year 13. It has agreements to provide students to Auckland, AUT and Victoria universities.

"They are paying $28,000 a year - full fees for delivery in their home market," he said.

A majority are in China, but students are also studying online in South Korea, Vietnam, Thailand, Cambodia, Malaysia, Sri Lanka and Oman.

"It was coming anyway in 10 years' time. What has happened is it's accelerated it," Rushworth said.

Mark Rushworth: "It was coming anyway in 10 years' time. What has happened is it's accelerated it." Photo / Supplied
Mark Rushworth: "It was coming anyway in 10 years' time. What has happened is it's accelerated it." Photo / Supplied

The company, which also provides vocational courses for domestic students, has still had to lay off 60 of its 1400 NZ staff and Rushworth says it is still at only "70 per cent of normal".

But he said the country's success at "beating Covid" has created an opportunity to grow.

"If our international education market is $5b now, it could be $8b in two or three years with what's going on in the UK and the US," he said.

An international survey in May by the EY consulting group found that 4 to 7 per cent of students were considering changing their destination country because of Covid.

Canada is the biggest winner, with its share of new international enrolments tipped to rise from 37 per cent this year to 43 per cent next year.

Australia's share is seen rising from 16 per cent to 18 per cent, and New Zealand's share from 2 per cent to 3 per cent.

The survey says the United States' share could fall from 25 per cent to 19 per cent, while Britain could drop slightly from 19 per cent to 18 per cent.

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