Profit in foreign student boom
Stuff Business - 05 February 2003

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The number of foreign students in the region has gone from below 800 it 1996, to 5523 last year, with growth of about 20 per cent a year.

On average, tertiary students spent about $28,000 on fees and living expenses - worth about $99 million to the region last year, according to figures from Education Wellington International.

Foreign secondary students and English language students at private schools took the total to $138.8 million last year.  Many English language students stay for a few months. University students usually stay a year or more.

Student numbers were expected to jump a further 20 per cent this year to more than 6600, according to EWI estimates, indicating the total value could reach more than $167 million.

There were an estimated 67,000 foreign students in New Zealand last year, worth about $1.3 billion to the economy.  "Because of its fast growth and reasonable base - you have a major export earner," according to Infometrics economist Adolph Stroombergen.

If the overseas student boom continues this year it could produce employment for about 2000 people from teachers to cafe staff, he said. Recently Fonterra, Westpac and IBM have all said they would cut staff in Wellington.

The rush of overseas students is countering some of that impact. Education groups say they aim to allow the numbers of foreign students to grow in a "controlled" way, so the students don't become unwelcome. Wellington's Massey campus had about 950 overseas students in 2002 - double the number of the year before, with another strong boost expected this year - perhaps as much as 30 per cent more.

Applications were up and Massey aimed to choose the best foreign students and manage the arrivals, so there was not a huge "influx from the one destination", according to Wellington campus principal Kenneth Heskin. "You can't just open the floodgates," he said.

However, most new foreign students were from China.  Factors encouraging overseas students to New Zealand's include universities with a good reputation, in a safe destination, and a low New Zealand dollar.

Foreign students paid a full rate to study here, rather than the subsidised rate paid by New Zealanders, Professor Heskin said. They also paid for housing, food and entertainment.

Typically, students here for a year or two were also visited by parents and family at least once a year, adding to the economic benefits. Victoria University had about 1400 foreign students last year, out of a total of about 16,000. Foreign students were expected to top 1500 this year, though at slower rate of growth than last year.

Victoria course fees are about $13,000 a year, with a further $16,000 a year spent on housing and other living expenses - close to $30,000 a year each, though others put the average at between $20,000 to $25,000 a year.

One example of the impact of rising numbers of foreign students in Wellington is the work under way at present refitting Stafford House, on The Terrace as student flats.

The 13-floor building used to be Foreign Affairs Ministry offices but will soon have 300 rooms, mainly to help cope with more international students. All the apartments have been sold to investors.

Mr Stroombergen said the direct spending by foreign students throughout New Zealand was worth about $955 million, with the add-on benefits taking it to $1.3 billion - most of it spent in Auckland.

"In the last eight months or so, things have shot up even more ... it is pretty phenomenal growth."  The growth could be about 20 per cent or even more, Mr Stroombergen said. The biggest group by number was the 42,000 English language students in 2001. Those students are typically here for just 12 weeks or so - worth about a third of the $1.3 billion total value.

There are about 25,000 foreign secondary and tertiary students. They spend more than English language students because they are here for a full year or more.

Massey's Wellington campus had about 950 foreign students in 2002 and expects 20 per cent to 30 per cent more this year, though figures had not yet been finalised. Classes start toward the end of this month and some foreign students do not arrive till a week before.

Professor Heskin said governments often wondered how the country could develop goods and services that could be sold internationally for a good profit and for the benefit of the community.

"We have got one in tertiary education," he said. It was "crazy" to bemoan the arrival of foreign students.  "It is actually a very good situation - I think we are very lucky." Massey has the equivalent of about 3650 full time students.

The 950 or so foreign students come from a variety of countries, though mainly China.  Massey students pay course fees of $10,000 to $15,000 a year, though the value to the economy could be double that, including housing, food, cars and so on.

At Victoria University most of the foreign students were from China, followed by the United States, Europe, and Malaysia.  A spokesman said Victoria aimed to manage the balance between various overseas countries.