Ontario colleges warned of over-reliance on international

Published 23/12/2021

A number of public colleges in Ontario – separate from their university system – have been warned against relying on fees from international students to stay afloat after rapid growth in recent years, according to a new report from the province’s Auditor General.

The auditor general’s office said in a statement that 24 institutions have been put in a “precarious position” by their financial status, where 68% of tuition fees are coming from international students.

“Some colleges’ positive financial position was mainly due to international student enrolment”

“In 2020/21, public colleges received a total of $1.7 billion in tuition fees from international students, enrolled at both their home and public-private college partnership campuses,” the report reads.

“Meanwhile, international student enrolment represented 30% of the total student enrolment [by student count] – we found that some colleges’ positive financial position was mainly due to international student enrolment,” it noted.

This is a massive rise from the 2017/18 academic year, which was, according to the report, the first year that international student tuition revenue exceeded domestic student tuition revenue.

Well known industry commentator, Alex Usher, founder and CEO of Higher Education Strategy Associates, says this over-reliance isn’t surprising.

“We’ve gone from five to 11 public colleges that have PPP [public-private partnership] arrangements with private colleges – one quarter of international students are being taught through these,” Usher told The PIE News.

Usher also mentioned that surging numbers of international students may not just raise a question about financial sustainability.

“This over-reliance is really about where a lot of these students are coming from – 62% of international students here are from India, and if we were to lose that market for some reason, no question, that would really hurt us.”

Centennial College told CBC that it would not be financially viable to run without revenues from international enrolment, “which is down significantly this year due to the ongoing global impacts of the pandemic”.

The report also referred to the “limited college oversight” of international student recruitment, as public colleges in the province use many recruitment agencies with international offices.

Four selected colleges that the report reviewed were found not to have an established a “formal policy to guide the selection and removal of recruitment agencies”.

Out of a sample of 100 of these colleges’ contracted agencies, the majority had no issues.

“Seven agencies made misleading claims – examples were related to the visa approval process, such as ensuring “100% success”, providing “visa assurance” and guaranteeing scores on the International English Language Testing,” the report reads.

While only seven agencies were found to have these issues, the report stresses that such issues can “create a reputational risk for the public college sector as a whole”.

This is exacerbated by the issue that some students will pay vast amounts of money in the hope of visa assurance, and eventually, the ability to stay in the country indefinitely.

“Seven agencies made misleading claims – examples were related to the visa approval process”

“International students pay “extremely high tuition fees” hoping they’ll eventually get permanent residency after they graduate,” Migrant Workers Alliance For Change organiser Sarom Rho told CBC.

“What we’re seeing here is a complete cash grab that targets racialised, poor and working class families around the world,” Rho continued.

This concern has already been raised in another piece on loan financing in October’s edition of The PIE Review.

On the domestic side, the report found that Ontario provides the lowest amount of funding out of all provinces in the country for full-time domestic students.

“Are we giving either the international students or domestic students the best possible products with this kind of influx?Usher asked.

Some colleges have had to rely on international student revenue just to avoid debt – five out of six public colleges with private college partners, the report found, could have incurred operating deficits had they not received that international student revenue in the 2019/20 academic year.

Usher points out that, while the deficit is there for some colleges, it isn’t a new issue.

“All that means is that they’re spending the money that they’re bringing in; three years ago they didn’t have that deficit,” Usher said.

“I don’t see what the alternative to [financial over-reliance] is. The government’s decision to underfund institutions is bipartisan – tri-partisan actually, because it goes back 30 or 40 years. They’ve always been this underfunded, and they’ve always been told go find money,” he added.

“Colleges and institutes represent the fastest growing study level for international students in Canada,” VP international partnerships at Colleges and Institutes Canada Alain Roy confirmed to The PIE News.

“The number of students varies from one region to another, but most of our members have seen significant growth in the past few years – this was supported in large part by policy decisions at both the federal and provincial levels that aimed to encourage and facilitate international recruitment,” he continued.

Roy also points out that international students are still beneficial to Canada’s public college landscape when it comes to general growth.

“[International students’] presence is largely positive and has helped colleges and institutes sustain valuable programs that might have otherwise been affected by dwindling domestic enrolment,” Roy said.

“A major priority for college and institutes across Canada is the diversification of students by source market, though institutions in rural areas accord a greater priority to growth,” he added.

The report recommends a number of options for colleges’ reliance on that revenue.

Firstly, the Ministry of Colleges and Universities should develop a “formal and comprehensive strategy for the diversification of international students for the public college sector.

Also mentioned in the report’s recommendations is setting up a requirement that public colleges establish their clear, actionable risk mitigation plans, with timelines and measurable outcomes in line with the aforementioned strategy.

The Auditor General finally recommends annual reports from public colleges on their goal status, taking “corrective actions when necessary”.

Usher is skeptical as to whether things will change with funding and risk mitigation.

“A major priority for college and institutes across Canada is the diversification of students by source market”

“In a perfect world where the government was not billions of dollars in deficit and we weren’t fighting our way out of another COVID wave, there might be a bit more money for colleges – but it’s just not happening right now… I don’t think we’re financially getting out of this problem unless colleges voluntarily choose to shrink.”

The Ministry has said it will “review the recommendations as part of its considerations in the development of an international post-secondary education strategy”.

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